Top tech execs warn that breaking their companies up will make problems worse

(CNN Business) Each year, powerful tech executives, startup founders and investors flock to the invite-only Code Conference, one of the most closely watched tech conferences in the world, to discuss what's next for their companies and the broader industry.

In previous years, it's where you would hear Sundar Pichai tout Google's advances in artificial intelligence and listen to Jeff Bezos explain how winning a Golden Globe can help Amazon sell more shoes. It's where Mary Meeker, a prominent venture capitalist, unveils her sweeping internet trends report, year after year, hundreds of slides long.

But at this year's conference, held this week in Scottsdale, Arizona, a procession of top tech execs were pressed to answer the same difficult question again and again: What will happen if mounting antitrust scrutiny of the tech industry forces their companies to be broken up?

One exec, YouTube CEO Susan Wojcicki, seemed wholly unprepared to answer the question on stage Monday. She said "I don't know" twice in her response before ending with: "We would figure it out."

Wojcicki's apparent bafflement, which she explained in part by noting YouTube's "really busy" week, hints at just how quickly the latest wave of antitrust scrutiny in the US has escalated. Just this month, the House Judiciary Committee launched a "top-to-bottom" antitrust probe of Big Tech reports came out that two federal regulators are divvying up responsibility for oversight of Google (GOOG), Facebook (FB), Amazon (AMZN) and Apple (AAPL). Since then, there have been reports that Facebook is in the process of building up its defense team and Google is overhauling its policy and government affairs teams to manage the heightened scrutiny.

The antitrust developments have rattled Wall Street, shaving off tens of billions of dollars in market value from the four companies in a single day. Investors have for years bet on the remarkable growth of these four companies, two of which briefly topped $1 trillion in market cap over the last year. It also served as a stark reminder that an industry once hailed as representing the best of American innovation is now being scrutinized by politicians on both sides of the aisle for having too much power.

At the conference, several execs settled on a talking point that could well be repeated many times in the coming months as antitrust hearings and investigations get under way: Sure, you could break us up, but that won't help consumers or society.

"I just think it's a terrible idea," Adam Mosseri, the head of Facebook subsidiary Instagram, said on stage on Monday. "Right now, there are more people who work on integrity and safety issues at Facebook than anyone who works at Instagram. ... If you split us up, you would cut that off, and it would make those problems that much more difficult."

Andy Jassy, the CEO of Amazon's $25 billion cloud computing division, suggested breaking up Amazon would only make it harder for the company to "stay focused" on serving its customers. What customers want, he added, is more capabilities, not the company being distracted by having to build new financial systems, an HR system and manage analyst calls.

Jassy reluctantly admitted that Amazon might not have a choice in the matter in the end. "If we're forced to do it, I guess we'd have to do it," he said.

While the tech executives predictably balked at having their businesses broken into pieces, many did agree that regulation is needed to tackle a host of issues, including data privacy, content moderation and facial recognition services, such as Amazon's Rekognition tool.

"If you want more protection, which I think is totally reasonable, the federal government should regulate it," Jassy said, referring to facial recognition technology. "I wish they'd hurry up -- if they don't, you're going to have 50 different laws in 50 different states."

Wojcicki was equally matter-of-fact: "There's definitely more regulation in store for us."