Update: Facebook has removed and then restored several ads placed by Elizabeth Warren, that called for the breakup of Facebook and other tech giants. More details here.
Last Friday, 2020 presidential hopeful, Senator Elizabeth Warren pinned a medium post stating that if elected president in 2020, her administration will make big, structural changes to the tech sector to promote more competition, “ including breaking up Amazon, Facebook, and Google.” She asserted on the same statement in a campaign rally held in Long Island City, Queens, on Friday.
Her judgment – she wants to set up a government that makes sure all tech companies abide by rules and the next-generation American tech companies flourish. She wants to stop bigger tech firms from abusing their reach and presence to shape laws in their favor or buy every potential competitor.
Warren highlights two strategies that Amazon, Facebook, Google, and Apple undertake to achieve a level of dominance. First, they use mergers to limit competition, which government regulators also allow instead of blocking them for their negative long-term effects on competition and innovation.
Second, these companies also use proprietary marketplaces to limit competition, which can lead to a conflict of interest that undermines competition. For instance, Warren says, “Amazon crushes small companies by copying the goods they sell on the Amazon Marketplace and then selling its own branded version.”
Designate companies as ‘Platform Utilities’
Warren’s proposal includes a plan to pass legislation, designating platforms with more than $25 billion in revenue as “platform utilities.” Platform utilities will be companies that offer to the public an online marketplace, an exchange, or a platform for connecting third parties. Warren says that “these companies would be prohibited from owning both the platform utility and any participants on that platform. They would be required to meet a standard of fair, reasonable, and nondiscriminatory dealing with users and will not be able to transfer or share data with third parties.” Amazon Marketplace, Google’s ad exchange, and Google Search would be platform utilities under this law.
These new requirements would be enforced and monitored by federal regulators, State Attorneys General, or injured private parties. A company found to violate these requirements would also have to pay a fine of 5 percent of annual revenue.
Appoint new regulators to break up mergers
Warren also says that in her administration she will appoint new federal regulators that would be responsible for breaking up any mergers that reduce competition and allow next-generation tech companies to flourish in the markets. These would include breaking Amazon’s merger of Whole Foods and Zappos; Facebook’s WhatsApp and Instagram and Google’s Waze, Nest and DoubleClick. She adds, “unwinding these mergers will promote healthy competition in the market — which will put pressure on big tech companies to be more responsive to user concerns, including about privacy.”
What does this mean?
Her main aim with this initiative is to allow small scale companies to have a fair chance to compete in the market without being overthrown by big tech firms. Here’s what Twitterati had to say (mostly supportive).
Elizabeth Warren's plan to break up Amazon, Google and Facebook is incredibly well thought out.
It is also a huge moment in American politics. A genuinely big idea that would transform the economy for the better.
— Zephyr Teachout (@ZephyrTeachout) March 10, 2019
Fauxcahontas wants to break up
A mazon, and
E veryone's benefit
That should work out well, and couldn't possibly blow up in her face or harm the economy in any way.https://t.co/9vFUrlUafb
— Brandon Garrett (@BatDaddyOfThree) March 8, 2019
“Today's big tech companies have too much power — too much power over our economy, our society, and our democracy. They've bulldozed competition, used our private information for profit, and tilted the playing field against everyone else” 👏👏👏 https://t.co/418qGgxRAT
— DHH (@dhh) March 8, 2019
In a crowded Dem field with lots of M4A and a GND supporters, @ewarren has set herself apart with out-of-the-box policy ideas:
1. A wealth tax on people with $50M+ to their name
2. Universal child care
3. Now: Breaking up Amazon, Facebook and Google https://t.co/0pilCPdVN9
— maxwell (@maxwellstrachan) March 8, 2019
This antitrust proposal is indeed a good way to attract the attention of voters, however, it is yet to see how well it will be effective considering Facebook, Amazon, Google, have experienced several controversies in recent years, and almost passed by without having much impact on their user base. Nevertheless, Warren’s plan is by far one of the biggest tech regulation plan proposed so far in the 2020 presidential cycle. If nothing, it is at least going to spark a major debate about antitrust policy among both Democrats and Republicans.