In the aftermath of the 2024 presidential elections, the narrative was that the 47th US president would help spur deregulation, particularly in the tech sector, remove barriers to mergers and acquisitions, and even dilute antitrust rules to strengthen America’s long-term competitiveness against key tech rival China. Venture capitalists talked about dozens of tech start-ups eager to raise tens of billions of dollars in initial public offerings. The listings and capital raising were supposed to further fuel the ongoing boom in artificial intelligence (AI). From Silicon Valley to Wall Street to Main Street USA, good times were ready to roll again.
More recently, the tech sector has been in one of its worst drawdowns since the bursting of the dot-com bubble 25 years ago. Eleven weeks into Trump’s second term, tech is reeling. While the tariff chaos hit stock market valuations hard across the board, US Big Tech firms suffered most, cumulatively losing US$2.3 trillion in market value at one point. Although the market has since seen a dead cat’s bounce of sorts, the total value of US Big Tech stocks is still down US$1.5 trillion from the peak earlier this year. On April 15, AI chip leader Nvidia Inc announced that it would record a US$5.5 billion charge related to the export of its H20 AI processors to China, which are now under a US export ban. That triggered another round of selling by tech investors. The tech-heavy Nasdaq 100 index is down over 20% from its February peak, while the broader S&P 500 index is down 16%.
Should anyone be surprised that the tech sector isn’t doing well in Trump’s second term? After all, the former New York property developer ran as a populist railing against elites and has, over the years, talked about powerful tech monopolies. Indeed, it was under Trump’s first term that the Department of Justice (DoJ) began investigations into search giant Google and its owner, Alphabet Inc, over its search advertising as well as Ad Tech businesses. Moreover, Vice-President JD Vance was a vocal supporter of Joe Biden’s Federal Trade Commission (FTC) chair Lina Khan and “her views about big tech companies and some of the mergers that lead to the censorship of American citizens”. Since Trump’s return to the White House, his administration has been challenging the market power of Big Tech firms like Google, Meta, Amazon, iPhone maker Apple and software supremo Microsoft.
On April 14, the FTC’s case against Meta went before a federal judge in Washington, DC. The government accuses Meta of “anti-competitive conduct”, alleging that the firm’s ownership of photo-sharing app Instagram and messaging service WhatsApp gives it excessive control of the social media market. Meta decided that competition was too hard and that it would be easier to buy out rivals than to compete with them, the US competition and consumer watchdog argues.
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Meta, at the time called Facebook, violated US competition laws when it acquired Instagram in 2012 and WhatsApp in 2014, FTC argues. Both now have over two billion users each. Instagram now accounts for over half of Meta’s total US$164 billion annual revenues. A break-up of Meta could potentially reshape the entire social media landscape and weaken its dominance in online communication and digital advertising.
FTC argues that the two acquisitions were part of Meta’s “buy or bury” strategy to maintain market dominance. For its part, Meta argues that it is not a monopoly and has indeed grown both Instagram and WhatsApp into giant social media properties through constant innovation and billions of dollars of funding. “How can the FTC maintain this monopolisation case when [Meta] has never charged users a cent?” Meta’s attorney Mark Hansen said in his opening remarks. WhatsApp and Instagram are free because you are the product for Meta rather than a user of its apps.
In an 88-page slide presentation, Meta argued that the emergence of Chinese video-sharing app TikTok shows that Americans now have a range of social media platforms available to them. Meta focused on user data during the roughly 12 hours ByteDance’s popular video-sharing app went down in January due to uncertainty over a US ban. But comparing TikTok with Instagram and WhatsApp sounds like an apples-to-oranges comparison. FTC claims that Meta actually monopolises the apps that share content with friends and family, specifically acquiring Instagram and WhatsApp to limit competition.
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The trial is expected to last several weeks and the court is likely to rule before the end of the year. The most convincing evidence is ironically in Zuckerberg’s own emails in which he blatantly argued that “it’s better to buy than to compete”. The “smoking gun” is an email in which he discusses the importance of “neutralising” Instagram. The government wants Meta to divest the WhatsApp and Instagram and give prior notice before buying any other company. Whatever the ruling, it is likely to be appealed.
Until recently, Zuckerberg was widely regarded as a supporter of the Democratic Party. Facebook was the first social media platform to ban Trump following the Jan 6 riots at the Capitol four years ago by Maga supporters protesting against the 2020 election results. More recently, he has moved himself and his firm closer proximity to Trump and his Maga crowd. Zuckerberg donated US$1 million for Trump’s inauguration. Meta has also done away with independent fact-checkers and agreed to pay Trump US$25 million to settle a lawsuit over the suspension of his accounts.
Zuckerberg has visited the White House and Mar-a-Lago multiple times since Trump won the election last November. In January, he appointed Maga Republican Joel Kaplan as Meta’s top executive. Two weeks ago, he named two of Trump’s close friends, Dana White, the CEO of the Ultimate Fighting Championship, and Dina Powell McCormick, a former Trump adviser, to the firm’s board. Yet, despite all of Zuckerberg’s brown-nosing, the FTC went ahead with the antitrust trial against Meta.
Just before the antitrust trial began, Meta offered to settle the case for US$450 million, far short of the US$30 billion that the FTC had demanded. Trump administration rejected the offer.
Trump has remade the old Republican Party in his own mould. His Maga base is mostly working-class Americans without college degrees who are not in favour of free markets or free trade. Vance, 40, has long been a critic of Big Tech. He worked as a junior venture capitalist and a biotech executive for years, eventually ended up at Mithril Capital, a firm owned by veteran venture capitalist Peter Thiel, a long-time backer of Trump. Thiel was co-founder of payment firm, PayPal, which merged with a fintech firm that Elon Musk used to own. Another executive at PayPal at that time was David Sacks, now the White House AI and cryptocurrencies Czar. Thiel backed Vance’s candidacy as Ohio Senator and last year Musk and Trump’s son Don Jr lobbied for him to be Trump’s running mate.
As a senator, Vance had called for the breaking up of Google and has long argued that tech firms were deliberately censoring conservative voices and exerting too much control over the daily lives of Americans. Now, as vice-president, he is pushing the administration to adopt more aggressive antitrust policies, particularly the break up of dominant tech behemoths. “We believe fundamentally that Big Tech does have too much power,” Vance said in his first week as Trump’s No 2.
Vance has already installed many of his aides and allies in key positions to carry out his anti-Big Tech agenda. Jacob Reses, Vance’s chief of staff, was previously a senior policy adviser to Senator Josh Hawley of Missouri, another vocal advocate for antitrust measures against Big Tech and the author of The Tyranny of Big Tech, a book which argues that Facebook, Google, Amazon and Apple are “the gravest threat to American liberty since the monopolies of the Gilded Age” because of their anti-conservative bias. Vance’s economic policy adviser in the Senate, Gail Slater, was recently confirmed as assistant attorney-general for the Justice Department’s Antitrust Division. Another former aide, James Braid, who worked with him in the Senate, now leads the White House’s office of legislative affairs as antitrust bills are reintroduced in Congress. James Lloyd, Vance’s former deputy policy director, previously led the Antitrust Division in Texas, where he took legal action against tech giants like Google.
Whether the appointments of Vance aides to key positions are a sign of a coordinated Maga effort to tackle an out-of-control tech industry or merely a coincidence, it is clear that many of the vice-president’s aides now pull the levers of enforcing laws that could help the break-up of large tech firms like Alphabet and Meta as well as block potentially harmful mergers that might potentially make them even more powerful than they currently are.
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The US vice-president cares more about free speech for conservatives and censorship than free markets or free trade. Vance believes that tech firms like Google and Meta now need to be reined in because they have become far too powerful. One way to rein in tech giants is to actively encourage other fast-growing competitors that could help level the playing field. Trump and the people around him have cited that argument in their attempt to keep TikTok alive. TikTok has been under a de jure nationwide ban in America due to the US government’s concerns over potential user data collection and influence operations by the Chinese government. However, during Trump’s four years in the political wilderness — banned by US social media giants like Facebook — TikTok ironically became a lifeline, broadcasting his messages to America and the rest of the world.
On April 17, a federal judge ruled on Google’s AdTech monopoly case. Google “willfully engaged in a series of anti-competitive acts”, which resulted in it obtaining “monopoly power in the open-web display publisher ad server market,” she noted. Last August, another judge ruled that Google had an illegal monopoly in the search market. Google is appealing the decision. The DoJ has called for a break-up of the search giant. Last week, the FTC took ride-hailing giant Uber to court for misleading customers over subscription terms. It is likely that at least one of the other three antitrust cases — against Amazon, Apple and Microsoft — will begin later this year. Whether tariffs are ultimately withdrawn or adjusted with more carve-outs and exemptions, the Trump administration will be remembered as one of the toughest regulators of Tech in US history.
Assif Shameen is a technology and business writer based in North America
