Elizabeth Warren proposes breakup of big tech - Activate World

Elizabeth Warren proposes breakup of big tech

Storyline:

Senator Elizabeth Warren has joined others across the political spectrum in voicing concern about the power of big tech and is proposing structural changes to promote competition. She has laid out a detailed plan for breaking up Facebook Inc., Google, and Amazon.com which she believes have become so powerful they are damaging the U.S. Economy and American Democracy. 

Senator Warren is positioning herself as a tech critic which should give Silicon Valley an indication of what to expect as the 2020 presidential campaign intensifies. At a rally in Long Island City, the neighborhood that was to become a major new Amazon campus, she proposed undoing some tech mergers, and adding legislation that would prohibit platforms from both offering commercial marketplaces and participating in them.

“Today’s big tech companies have too much power—too much power over our economy, our society and our democracy,” Ms. Warren said in an online post. “They’ve bulldozed competition, used our private information for profit and tilted the playing field against everyone else. And in the process, they have hurt small businesses and stifled innovation.”

Ms. Warren’s proposal has two main parts. First, it calls for regulating dominant tech platforms like Google and Facebook as utilities and prohibiting them from both operating the platforms and owning and operating related businesses that run on those platforms. These rules would apply to companies with $25 billion or more of global annual revenue. Smaller companies with revenue between $90 million to $25 billion would be required to operate in a “fair, reasonable, and nondiscriminatory” manner, but wouldn’t have to structurally separate different parts of their businesses. These platform utilities would be prohibited from sharing data with third parties affecting Facebook and Google as centers of the data economy.

Secondly, the senator said she would appoint regulators to unwind “illegal and anticompetitive tech mergers” that the government has previously allowed. This includes Facebook’s acquisitions of Instagram and WhatsApp, Amazon’s acquisitions of Whole Foods and Zappos, and Google’s acquisitions of Waze, Nest, and Double Click. Warren’s campaign also confirmed to Wired, that Google’s acquisition of YouTube would be reviewed, and that YouTube could be considered a platform utility as well.

Others in the race for the democratic nomination have expressed a willingness to limit the influence of Facebook, Google, Apple, and Amazon including Senator Bernie Sanders of Vermont and Senator Amy Klobuchar of Minnesota. Senator Kamala Harris, who represents many of these tech companies based in her home state of California, has repeatedly pressed executives on consumer privacy but has avoided direct calls to limit their influence.

Noteworthy:

  • At a campaign rally in Long Island City, Senator Warren compared Amazon to the Dystopian novel “The Hunger Games,” in which those with power force their wishes on the less fortunate. 
  • In 2018, Senator Warren Introduced the Accountable Capitalism Act, which seeks to curb shareholder power by forcing corporations to increase worker representation on their boards and reducing incentives for big companies to pay out shareholders versus reinvesting in businesses. 
  • At the South by Southwest tech conference Ms. Warren said, “the way markets work is that they have to have rules, and they have to have cops to enforce them,” in reference to her belief of instating anti-trust rules in the tech arena. She said she could also be described as a capitalist who believes “in a level playing field.”

Quests and Actions (Q&A):

  • Do Amazon, Google, and Facebook epitomize the need for the government to break up monopolies and promote competitive markets? Are they comparable to the tobacco monopolies of America’s past that were eventually subjected to anti-trust lawsuits? 
  • Could breaking big tech apart introduce inefficiencies to the economy that could harm both the deconstructed companies and their customers?
  • What is your preference — break big tech into small companies, regulate big tech to protect data and privacy, both, or leave alone? What factors support your position?

Photo by Con Karampelas on Unsplash

Sources: Bloomberg, Recode,The New York TimesThe Wall Street JournalWired