"It's only a matter of time before the global dominance of the U.S. IT monopolies is broken," according to billionaire George Soros. The 87-year-old investor bashed Facebook Inc. (FB) and Apple Inc. (AAPL) during his speech at the World Economic Forum in Davos, Switzerland, calling for "more stringent regulations" on the tech titans, which he blames for breeding addiction among its users.
Soros indicated that as the Silicon Valley-based companies have "grown into ever more powerful monopolies," they have thwarted innovation in the tech space and caused a "variety of problems of which we are only now beginning to become aware."
Facebook and Apple, both components of the high flying FANG stock group, have seen their shares skyrocket 41.3% and 40.2% respectively over the most recent 12 months. As the bull market charges past its ninth year, the Street doesn't see tech slowing down any time soon. According to a recent report by Thomson Reuters, the top five biggest tech companies, including Facebook and Apple, are set to grow sales at a double-digit rate in 2018. (See also: Buy FANG Stocks Ahead of Next Week's 'Party': GBH.)
Expecting More Stringent Regulation
Soros deemed the two tech companies “menaces” that would be temped to “compromise themselves to enter the Chinese market.” He went as far to compare the internet platforms to gambling companies, particularly in terms of posing a mental health risk to adolescents. The investor also cited concerns regarding the possibility for "unholy marriages" between the tech firms and regimes in Russia and China, which could create a "web of totalitarian control." Soros expects governments to meet these issues head on with regulation and taxation, indicating that the European Union competition chief Margrethe Vestager "will be their nemesis."
Soros' criticism comes as Facebook confronts heightened pressure to keep down hate speech and foreign influence on its global social media platform. Many have criticized Chief Executive Officer Mark Zuckerberg's behemoth for its inability to control what's published and shared on its site, leading Salesforce.com Inc. (CRM) CEO Marc Benioff to speak up in Davos, suggesting it should be regulated like tobacco companies.
Earlier this month, Apple came under fire from two activist investors urging the company to address concerns over smartphone addiction and mental health effects of smartphone use on children. (See also: Top 10 Tech Firms to Exceed $1T in 2018 Sales.)