Sen. Warren: We Need to Break Up Amazon, Facebook, Google | News & Opinion
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Sen. Elizabeth Warren today proposed breaking up big tech companies, which she says have “too much power over our economy, our society, and our democracy.”
In a Friday blog post, Sen. Warren, a Massachusetts Democrat, called out Facebook, Amazon, and Google in particular, but her plan covers any large tech company engaging in what she considers to be anti-competitive behavior.
“We need to stop this generation of big tech companies from throwing around their political power to shape the rules in their favor and throwing around their economic power to snuff out or buy up every potential competitor,” Warren wrote.
The senator, who is currently seeking the Democratic nomination for president in 2020, pledged to “make big, structural changes to the tech sector to promote more competition” in a Warren administration.
Specifically, she wants to label companies “with an annual global revenue of $25 billion or more and that offer to the public an online marketplace, an exchange, or a platform for connecting third parties…as ‘platform utilities.'”
Warren called for legislation that would ban these utilities from owning “both the platform utility and any participants on that platform” and could not transfer or share data with third parties. Firms that violate these rules would pay a fine of 5 percent of annual revenue
Warren pointed to Amazon Marketplace, Google’s ad exchange, and Google Search as examples of platform utilities. “Therefore, Amazon Marketplace and Basics, and Google’s ad exchange and businesses on the exchange would be split apart. Google Search would have to be spun off as well,” she wrote.
Meanwhile, Warren wants to reverse “illegal and anti-competitive tech mergers” via appointed regulators. That includes Amazon’s acquisitions of Whole Foods and Zappos, Facebook’s purchase of WhatsApp and Instagram, and Google’s deals with Waze, Nest, and DoubleClick.
Facebook, Google, and Amazon did not immediately respond to requests for comment.
But execs have faced questions about regulation in recent months. When Facebook CEO Mark Zuckerberg appeared before Congress last year after the Cambridge Analytica fiasco, he acknowledged that regulation is “inevitable” given that “the internet is growing in importance around the world in people’s lives.”
“My position is not that there should be no regulation,” Zuckerberg told the Senate and the House, provided it’s “the right regulation.”
Regulation Means We’re Not ‘Stuck With Bing’
Warren pointed to Microsoft as an example of regulatory action in the tech world that worked.
“In the 1990s, Microsoft—the tech giant of its time—was trying to parlay its dominance in computer operating systems into dominance in the new area of web browsing,” she wrote. “The federal government sued Microsoft for violating anti-monopoly laws and eventually reached a settlement. The government’s antitrust case against Microsoft helped clear a path for Internet companies like Google and Facebook to emerge.
“Aren’t we all glad that now we have the option of using Google instead of being stuck with Bing?” Warren quipped.
She also pointed to the breakups of Standard Oil, JPMorgan, the railroads, and AT&T.
“Instead of nationalizing these industries—as other countries did—Americans in the Progressive Era decided to ensure that these networks would not abuse their power by charging higher prices, offering worse quality, reducing innovation, and favoring some over others,” she said. “We required a structural separation between the network and other businesses, and also demanded that the network offer fair and non-discriminatory service.”
Warren argued that little will change for consumers should her administration take these actions. “You’ll still be able to go on Google and search like you do today. You’ll still be able to go on Amazon and find 30 different coffee machines that you can get delivered to your house in two days. You’ll still be able to go on Facebook and see how your old friend from school is doing.”
Ideally, however, the moves will give small businesses a shot at selling their products on Amazon without fear that Amazon will introduce its own version of the item or that Google will demote their products on Search in favor of its own, Warren said. If it didn’t own WhatsApp and Instagram, meanwhile, Facebook “would face real pressure from [both apps] to improve the user experience and protect our privacy. “
In short, “tech entrepreneurs would have a fighting chance to compete against the tech giants,” she said.