CrossAssetResearch18July2019FOCUSBarclaysCapitalInc.and/oroneofitsaffiliatesdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.FORANALYSTCERTIFICATION(S)PLEASESEEPAGE36.FORIMPORTANTFIXEDINCOMERESEARCHDISCLOSURES,PLEASESEEPAGE36.FORIMPORTANTEQUITYRESEARCHDISCLOSURES,PLEASESEEPAGE37.Restricted-InternalU.S.InternetBreakingUpIsHardtoDoAnti-trustbarklouderthanbite,butregulatoryrisksarereal:Callstobreakupthelargestinternetcompanieshavebecomelouderrecently,amidageneralriseinconcernsaboutthepotentialmarketpowerthesefirmsmayhaveaccumulated.Wedonotbelievethatattemptstobreakupthesecompanieswouldbesuccessful,norwouldtheymitigatethedetrimentaleffectsofmarketpower.Givencurrentantitrustlaw,thebartoproveconsumerharmisquitehigh,andatamacrolevel,thebusinesspracticesandorganizationalstructureofcompaniessuchasGoogle,AmazonandFacebookwouldbedifficulttochallenge,atleastintheUS.Anycaseswilllikelytakeadecadeorlongertoplayout;meanwhile,thecompanieswouldcontinuetooperate.Further,theriskoftargetingthewrongcompaniesisreal.Bothmediaandretailhavebeensingledoutasindustriesbecomingdominatedbyinternetgiants.Indeed,ourBarclaysCompetitivenessIndicator(BCI)suggeststhatcompetitioninmediahasfallen,likelyduetotheriseofdigitalmedia.However,accordingtoourBCI,competitioninretailishealthy,suggestingthateconomiesofscalearedrivingconsumersurplusandthatbreakingupAmazonwouldonlyfurtherentrenchotherlargeretailers.Dataportabilityisarisk:Newregulationstargetingtechnologycompaniesarealsobeingdiscussed.Approachesdesignedtokeepdominantcompaniesfromabusingtheirpositionscouldactuallyworkinfavorofincumbentsbyraisingnewbarrierstoentry.Changingtheownershipstructureofconsumerdatacouldallowplatformstoretainnetworkeffects,economiesofscaleandmonetizationopportunitieswhileallowingcompetitorstoleveragedatacollectedonagiv...
