Time to break up titans of Silicon Valley

As tech giants make sales of £74bn in just three months, critics say it’s...

THE world’s biggest tech com- panies face being broken up as they toast a formidable set of sales figures.

This week, Google, Facebook and Amazon – and Microsoft last week – reported huge growth in advertising sales, cloud computing services and internet video revenues.

The total revenues of the four for the last quarter were £74bn.

That has renewed political feeling in Washington that the Silicon Valley titans are at risk of becoming monopolies – and should be split into several different companies.

President Donald Trump’s chief strategist, Steve Bannon, is among those reportedly pushing for them to be considered utility companies, like power firms, so they could be more closely scrutinised.

It is not unprecedented to break up US firms – giants such as Standard Oil, AT&T and IBM have been separated in the past.

Professor Jonathan Taplin, a US academic who studies tech companies, said: ‘ Something has definitely changed in the past month. you now have people on both sides of the political aisle saying maybe we should be regulating these firms as utilities.

‘They are becoming natural monopolies. Breaking them up, as was done with Standard, would be an extreme option but there are lots of smaller actions that could be taken first.’

US Senate Democrats have outlined plans for a ‘better deal’ that proposes breaking up monopolies across a number of major industries.

The dominance of the tech giants has been underlined by their results this week. Google, owned by Alphabet, accounts for 90pc of all web searches. Google and Facebook command 99pc of all new internet advertising revenues.

Alphabet this week posted revenues of £19.8bn for the second quarter. However, it was hit with a £2bn fine by the EU for manipulating search results, which wiped out an increase in profits.

Facebook, meanwhile, has grown to 2.1bn users, of which 1.3bn use it every day. Its other services, such as WhatsApp, now have 1.3bn monthly users. WhatsApp Status, its version of Snapchat Stories launched six months ago, now has more than 250m daily users. Rival Snapchat has 166m daily active users.

Total revenue rose 44.8pc to £7.1bn from the same period in 2016, and Facebook posted a profit of £2.9bn – up 71pc.

Adverts on mobile phones accounted for 87pc of its total advertising revenue.

The boost came from cashing in on video within its Facebook news feed, as well as the growth of its Instagram photo app, which now has 700m users.

Amazon shares sank after it announced a fall in profit to £29bn, but below this bottom line revenues were soaring. Its growth was spurred on by ‘other’ services climbing 51pc, which analysts have interpreted as being Ama- zon’s own advertising business as well as its credit card arm.

The firms have also been accused of killing off rivals.

Amazon’s bid for organic supermarket chain Whole Foods is expected to be closely examined by competition officials. Also, the 49.5pc share dive of Snap, the parent company of photo-messaging app Snapchat, has been partly blamed on Facebook, which has been accused of taking features from Snapchat and duplicating them in its rival Messenger and Instagram apps. Apple reports its results on Tuesday.

Amazon did not comment.