Prof. Scott Galloway has a few questions for Apple’s Tim Cook

The CEOs of four tech megacaps are set to testify before Congress Wednesday. Enter the bad boy of NYU’s marketing department…

From “Fire & Fawning” posted Friday on Galloway’s No Mercy/No Malice:

When the show starts, Zuck will be the target of the most ire, as he’s an oligarch minus the charm. Bezos, on the other hand, will receive the least ire, as his command of soft power is second only to China… Cook and Pichai will likely just try to stay out of the line of fire and fawning for Zuck and Bezos, respectively. Expect Zuck to use two words repeatedly in his defense (tik and tok) as he attempts to wrap himself in the flag and convince the committee that he’s our national champion, singularly able to repel the invading Chinese … coming for our children.

Q: Messrs. Bezos, Cook, Pichai, Zuckerberg, your firms have added greater market capitalization in the last five years than the largest retailers and CPG firms have in total. This is a large portion of the entire consumer economy. If you were public servants, would you be concerned that too many of the spoils are being registered by increasingly fewer firms and people?

apple scott galloway questions

Q: Your market capitalization per employee is thousands of times higher than that of other companies in your sectors. Do you think your companies contribute to income inequality?

apple scott galloway questions

Q: Mr. Cook, monopoly rent is when a monopoly producer lacks competition and thus can sell its goods and services at a price far above what the otherwise competitive market price would be, at the expense of consumers. Our information age is often called “the app economy,” denoting how important apps have become to commerce and consumption. Your firm and Google dominate the app ecosystem, with 62% and 38% shares, respectively. This chart shows the rents you are able to extract from every streaming video app. Every media company that wants to reach a consumer online must pay you a toll or rent. Do you think any of these firms believe that paying you this rent is a choice?apple scott galloway questionsQ: Spotify is consistently rated as a superior music service to your Apple Music, yet Apple Music is growing faster than Spotify in the US. Isn’t this a function of you owning the rails, and being able to levy a 30% tax on a competitor while illegally reducing their discoverability in the app store?

My take: Galloway is always provocative and, as he himself admits, often wrong. I’ve asked the professor what NPS means in the context of the chart above and if he had any data more recent than Q4 2017.

Respect for the fabric softener in Galloway’s opener:

Big tech has won before the hearing starts. Agreeing to let all four testify concurrently inhibits the committee’s ability to go deep on any one issue, and will leave the American public with a sentiment instead of a viewpoint on big tech, much less any conclusions (such as, that the Obama DOJ was asleep at the switch, and Instagram and Whatsapp should be divested). The Covid-inspired remote format dramatically lessens the likelihood of an unscripted moment that reveals something the American public didn’t previously know. Fabric softener for tough questioning is the deep pockets that keep members in power.

5 Comments

  1. Fred Stein said:
    We need open minds, not rhetoric. The issues are important. His assertions are false.

    Re Apple, I quit at, “sell its goods and services at a price far above what the otherwise competitive market price”. Not true.

    Using “oligarch” for Zuckerberg, is, I guess, poetic license. It belies his bias. He appeals to those who like inflammatory speech and casting blame.

    1
    July 25, 2020
  2. Thomas Nash said:
    Since this nonsense is going to dominate the non-covid, non-election portion of the zeitgeist for a couple of days, y’all may find it informative to read Benedict Evans essay on the inevitable attempts coming to regulate “big” tech…

    https://www.ben-evans.com/benedictevans/2020/7/23/regulating-technology

    I do hope the clueless Professor Galloway reads this essay, along with the US and Euro bureaucrat/legislators.

    3
    July 25, 2020
  3. Stephen Young said:
    I have stopped following Prof. Galloway a while back, I find his over simplification and sensationalism a waste of time. An example from above concerning he states about Spofity “levy a 30% tax on a competitor”. What he fails to state is after a year it reduces to 15% for subscriptions. Also he fails to mention “Apple later shared that it takes a revenue share from less than 1 percent of Spotify subscribers” source: https://www.idropnews.com/news/spotify-says-apple-still-has-a-long-way-to-go-before-its-an-open-and-fair-platform/135260/.

    0
    July 25, 2020
  4. S Lawton said:
    Ok, I’ll plead ignorance. Yes these four have gigantic market caps which are an indication of how shareholders value them. But why should we be examining that instead of revenue with regard to comparing to the competition and executive earnings with regard to employee compensation and income I equality. I know for sure there are many smaller companies out there who pay executives more than Amazon does. If you want to punish shareholders, start with taxing their dividends and capital gains as ordinary income for all shareholders, not just the big four.

    1
    July 25, 2020
  5. Jerry Doyle said:
    Scott Galloway & I agree (reference my comments earlier this morning on the preceding post) that the judicious approach (or Congressional master plan) for success in the public hearings would have been to hold four separate intense, comprehensive hearings, boring deep, punching, jabbing each single CEO until the subcommittee members perforated, pierced & finally punctured the issue as needed for public elucidation. Instead, I fear, we never will arrive close to any definitive conclusion or judgment that resolves the purpose of the hearing.

    Scott Galloway reminds me of politicians who are adept at defending a wrong premise and reaching the right conclusion. His premise seems to be “big” is harmful in itself, inflicting violation or invasion on another & thus guilty in the absence of having found violation or invasion to exist. This is what troubles me about Galloway & about politicians involved in pursuing anti-trust endeavors.

    Louis Halle, the great American policy thinker from the 1950s, warned that if you cling to a flawed image of the issue that no amount of dexterous policy execution can save you from creating a disaster.

    Advocates who premise their images that too big is harmful and consequently push for change have to prepare themselves for the fact that much of what they get is unpredictable.

    2
    July 25, 2020

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