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The case for breaking up Big Tech

Scott Galloway, speaking at DLD18. Photo: Dominik Gigler for DLD

When NYU professor Scott Galloway began The Four, his book on Apple, Google, Amazon and Facebook, he thought it was a love letter. Now he says it's time to break up — the companies, that is.

"I’ve become 100 percent convinced that its time to break these companies up," Galloway said, speaking at the DLD18 conference in Munich. "I want to be clear I love these companies. ... They are clients of mine, at least for another hour until they see this."

The rationale: "The key to competitive markets is no one company has too much power and we have blown way by that." Galloway notes that Google would have never made it out of the crib if antitrust regulators hadn't put the breaks on Microsoft.

Other predictions: Galloway also used his talk to offer his take on 2018. Amongst other predictions, he says 2018 will be the year Amazon passes Apple in value and Twitter, Snap and Pinterest are either purchased or take on new investments.

Go deeper: Read my whole story here (including Galloway's predictions) and watch highlights of his talk here.

Facebook on the defensive

Facebook VP Elliot Schrage, speaking at DLD 18 in Munich. Photo: Ina Fried / Axios

Facebook says it can't say whether its service, on the whole, is good or bad for democracy, Axios' Sara Fischer writes. Well that's comforting.

What's happening: The social network defended its move to identify quality news sites by surveying its users. Its argument: It's better to do that than the alternatives of either having Facebook itself choose what constitutes quality news or relying on outside entities.

Turning things over to any third party simply “invites criticism" of those selected experts, Facebook policy and communications chief Elliot Schrage said, responding to a question from Axios during his talk at DLD in Munich.

Skeptical take: Former Businessweek editor Megan Murphy, also speaking at the conference, said she worries that Facebook's move won't change much in a divided country.

"There’s a huge risk of confirmation bias," Murphy said. "I’m not quite sure how that algorithm is going to work out in terms of being a more efficient filter."

Mea Culpa: Schrage used most of his speech to apologize for Facebook's past shortcomings when it comes to both removing hate speech and defending the service from being a tool for foreign interference in elections.

"We have not served that mission so well in either our explanations or our investments," he said.

You can watch the highlights here.

Expiration of Comcast-NBC merger conditions is raising concerns

Photo: FG/Bauer-Griffin/GC Images

Major conditions imposed by regulators as part of Comcast's merger with NBCUniversal expired Saturday, renewing debate over AT&T's takeover of Time Warner, which the Justice Department is trying to block, Axios' Kim Hart reports.

Why it matters: When approving the merger in 2011, the Justice Department and Federal Communications Commission required Comcast-NBCUniversal to abide by more than 150 conditions.

As they phase out, some worry the media giant will engage in anti-competitive behavior that the conditions were designed to prevent — especially with the FCC's net neutrality rules also going away. (Comcast says it won't.)

What expired: The conditions imposed by the government limited the kind of deals Comcast could make with other video programmers and distributors. The last of the other conditions will expire in September.

What they're saying: Comcast says it's fully complied with — and in some cases even exceeded — all of its obligations under the deal and doesn't plan to change its business practices now that they're expiring.

What others fear: Sen. Richard Blumenthal urged the DOJ to consider extending the conditions or even breaking up the company "in order to fully restore competition." Meanwhile, FCC commissioner Mignon Clyburn said she still has concerns with one company owning both content and distribution.

Kim has more here.

Note: Comcast is an investor in Axios through NBCUniversal

Amazon opens its cashier-less convenience store

Amazon Go, the company's model for a convenience store of the future, will finally open to the public today in Seattle.

Tick-tock: The opening is later than expected, after the company opted to extend internal testing.

What they're saying: The store "resembles what a 7-Eleven might look like if it got a high-end makeover" says Recode, which was among the outlets that got a tour of the store.

The big question: Where does the technology go from here? Will Amazon expand the technology to its own bookstores? Whole Foods? Sell it to other retailers?

Separately: Saturday Night Live spoofed Amazon's HQ2 search over the weekend.

Post-holiday reckoning for Sphero and Tile

A StarWars' R2-D2 connected toy robot created by Sphero. Photo: Amy Brothers / The Denver Post

Two niche hardware makers are making job cuts after holiday sales proved to be less than anticipated.

Bluetooth item tracker Tile and educational robot maker Sphero are both shrinking their staffs, according to TechCrunch. Tile has cut around 30 staffers, while Sphero is shrinking by 45.

The bottom line: These are examples 8,456 and 8,457 that hardware is hard, even for companies that are well-regarded for what they do. Sphero had seemed to be (pardon the pun) on a roll after a deal with Disney enabled it to expand from a generic robot ball to branded bots such as R2-D2 and Lightning McQueen.

Take Note

On Tap

  • Netflix reports earnings.
  • DLD is wrapping up in Munich with Uber's CEO among the final speakers. Check out our Axios.com stream for the latest.
  • Cryptoeconomy's ICO 2018 conference takes place in San Francisco.

Trading Places

  • Former Qualcomm and LeEco executive Rob Chandhok has joined Daily Mail publisher DMGT as its global CTO.
  • Disney hired Apple veteran Kevin Swint to help build out its upcoming streaming video service.
  • Twitter COO Anthony Noto is reportedly being considered for the open CEO spot at online lender SoFi, first reported by WSJ.

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