Feb 14, 2020 - Economy & Business

VCs push back on DOJ antitrust concerns

Illustration: Sarah Grillo/Axios

Silicon Valley investors downplayed concerns that big tech companies inhibit startups, during a recent workshop hosted by the U.S. Justice Department and Stanford University's law school.

Why it matters: Antitrust regulators are paying increased attention to Silicon Valley's M&A culture.

What they’re saying: “I think [government regulation] is the greatest impediment to the creation of smaller companies and to moving fast,” said Sequoia Capital’s Michael Moritz, echoing a familiar anti-government refrain from Silicon Valley.

  • He later pointed the finger at "the school classrooms of America" for lagging behind China's educational achievements. "We're killing the future technologists of the United States."

VCs also argued that because they tend to invest in “the next thing," big tech incumbents aren’t a deterrent for their business.

  • “Would you invest in PC operating systems today? Would you invest in microprocessors today? Would you invest in combustion automobiles today? No, you wouldn't if you’re a good investor,” said Ram Shriram, an early investor in Google and one of its current directors.
  • Similarly, Moritz pointed out that companies like Google and Nvidia didn’t set out to take on incumbents like Microsoft and Intel.

But, but, but: Some disagreed.

  • “I’ve seen dozens of startups wanting to do something to compete with Linkedin but that’s so hard to do — incredibly strong network effects to overcome,” said Switch Ventures partner Paul Arnold.
  • Early Facebook backer Roger McNamee argued that “the business models of Google, Facebook, Amazon, and Microsoft and of the venture firms… may not be optimal for the economy as a whole.”

Between the lines: Many worried about the impact that increased M&A regulation could have on incentives for everyone involved.

  • “If I’m a founder or I’m an investor, and I’m thinking about starting a company in a core market of an incumbent…. what if Plan B (M&A) is not an option—that changes things,” said Trinity Ventures' Patricia Nakache.

The bottom line: While Silicon Valley's investors and entrepreneurs love market competition, they also value the rewards of winning a competition—being a big and powerful company.

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Twitter fact-checks Chinese official's claims that coronavirus originated in U.S.

Chinese Foreign Ministry spokesman Zhao Lijian. Photo: Greg Baker/AFP via Getty Images

Twitter slapped a fact-check label on a pair of months-old tweets from a Chinese government spokesperson that falsely suggested that the coronavirus originated in the U.S. and was brought to Wuhan by the U.S. military, directing users to "get the facts about COVID-19."

Why it matters: The labels were added after criticism that Twitter had fact-checked tweets from President Trump about mail-in voting, but not other false claims from Chinese Communist Party officials and other U.S. adversaries.

Podcast: Trump vs. Twitter, round two

President Trump is escalating his response to Twitter’s fact check of his recent tweets about mail-in voting, issuing an executive order that's designed to begin limiting social media's liability protections. Dan digs in with Axios' Margaret Harding McGill.

Go deeper: Twitter vs. Trump... vs. Twitter

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 12:30 p.m. ET: 5,731,837 — Total deaths: 356,606 — Total recoveries — 2,376,542Map.
  2. U.S.: Total confirmed cases as of 12:30 p.m. ET: 1,703,989 — Total deaths: 100,651 — Total recoveries: 391,508 — Total tested: 15,192,481Map.
  3. Congress: Pelosi slams McConnell on stimulus delay — Sen. Tim Kaine and wife test positive for coronavirus antibodies.
  4. Business: U.S. GDP drop revised lower to 5% in the first quarter — 2.1 million Americans filed for unemployment last week.
  5. States: New York to allow private businesses to deny entry to customers without masks.
  6. ⚽️ Sports: English Premier League set to return June 17.
  7. What should I do? When you can be around others after contracting the coronavirus — Traveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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Updated 2 hours ago - Politics & Policy