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Illustration: Lazaro Gamio/Axios
When leaders in Silicon Valley assess the new antitrust fever among candidates and policymakers, it's not the prospect of having their companies broken up that is the biggest worry.
Rather, as tech editor Scott Rosenberg and I report, the biggest fear is missing the next cycle of industry change while being distracted and hounded by regulators.
Why it matters: If executives are busy answering lawmaker inquiries and defending regulator lawsuits, they're less likely to be protecting their businesses from upstart challengers. And if they're under constant regulatory scrutiny, they'll be less able to either elbow aside or snatch up the competition.
Driving the news: Last week, Democratic hopeful Sen. Elizabeth Warren unveiled a broad case for breaking up Big Tech icons like Google, Apple and Amazon, arguing that operators of platform-style marketplaces should not also be participants in those markets.
Flashback: Microsoft's antitrust fight with the feds two decades ago shows the kind of damage such an assault can wreak.
IBM fought a similar epic federal antitrust suit from 1969 to 1982, ultimately prevailing. In both instances, the targeted companies found themselves focused on their legal quandaries and missed the next turn of the industry wheel.
Intel, by contrast, cemented its dominant share of the personal computer chip market by playing along with regulators instead of fighting them. Intel's aggressive marketing skated right up to the line, but whenever a regulator balked, the firm settled. (It did miss out on mobile, though, creating a whole new set of headaches.)
The bottom line: No tech giant has ever been split up by courts, regulators or legislators.
Be smart: For antitrust advocates, the corporate breakup endgame may not matter if, even without such a dramatic outcome, they can still achieve a key goal — ensuring that dominant incumbents can't squash or swallow the next wave of tech innovation.
Go deeper: Scott and I have more here.
A Foxconn building in Taipei, Taiwan. Photo: Sam Yeh/AFP/Getty Images
Microsoft is suing a unit of Taiwanese contract manufacturer Foxconn over unpaid patent royalties on the consumer devices it makes for others.
Why it matters: Microsoft has a patent license with Foxconn that calls for it to make payments for smartphones, tablet and other devices, and to provide an annual audit to Microsoft. The software maker says the company has not been doing either in recent years.
What they're saying: Microsoft said in a statement to Axios that it values its relationship with Foxconn, also known as Hon Hai Precision Industrial, and is working to resolve the disagreement. Per the statement...
“Microsoft takes its own contractual commitments seriously and we expect other companies to do the same. This legal action is simply to exercise the reporting and audit terms of a contract we signed in 2013 with Hon Hai. Our working relationship with Hon Hai is important and we are working to resolve our disagreement.”
A Foxconn representative was not immediately available for comment.
Having told the stories of Scientology, Enron, and Steve Jobs, filmmaker Alex Gibney knows something about captivating personalities and the power of persuasion.
In his latest film, Gibney and his colleagues take on a subject that manages to combine elements of all three prior subjects — Theranos' Elizabeth Holmes.
During an on-stage Q&A after the Silicon Valley premiere of "The Inventor," I had a chance to ask Gibney where Holmes fits in, as we spoke in front of a packed auditorium at Lucasfilm's offices in the Presidio.
Yes, but: Fellow panelist Phyllis Gardner, with whom Holmes shared her initial idea while she was still a student at Stanford University, had harsher words: “I think she’s a sociopath, I think she’s a liar of the deepest kind.”
The big picture: Since the Wall Street Journal published its first report on the company’s misleading practices in October 2015, Theranos has become the poster child for Silicon Valley’s worst frauds.
(Thanks to my Axios colleague Kia Kokalitcheva for taking notes and writing this up while I chatted up the filmmakers and posed for selfies.)
Months after their departure from Facebook, Instagram's co-founders took to the stage at SXSW to explain why they sold their company to Facebook, and why they left the social network, Kia reports.
The big picture: “The idea behind it was that we wanted to make a bet on the company,” Instagram co-founder Kevin Systrom said of the decision to sell to Facebook. And if the goal was to pick a company that would help Instagram continue to grow, that bet paid off, he said.
While a lack of autonomy may have driven Systrom and co-founder Mike Krieger to leave Facebook, it was also inevitable.
More from the interview:
What's next: Systrom and Krieger were coy on their next move, but seemed to indicate they might be game for another startup.
New York City's metro cards now come to life, thanks to the magic of Snapchat and augmented reality.