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Silicon Valley

Elizabeth Warren says it’s time to break up Big Tech

March 8, 2019

The US presidential hopeful claims companies like Facebook and Amazon have become too powerful—and that it’s time to blow up their empires.
The great divide: In a blog post, Warren, a Democratic senator from Massachusetts, said that if she wins office in 2020, she’s going to push for legislation that labels companies running online marketplaces with revenue of $25 billion or more as “platform utilities.” These utilities would be forbidden from competing with companies that use their platforms to reach customers.
Today, there’s nothing to prevent, say, Amazon from selling stuff itself while also hosting a vast e-commerce platform used by others. Antitrust campaigners have argued tthat this gives the tech giant, which sells its own gear and owns e-commerce businesses (e.g., Zappos) and a supermarket chain (Whole Foods), an unfair advantage over other firms.

In Warren’s plan, companies with revenues between $90 million and $25 billion would still be allowed to compete with users of their platforms, but they would have to adhere to certain fairness rules. Any business, large or small, caught violating the law would be fined 5% of its annual revenue.
The great unwinding: Warren also says she would appoint much tougher antitrust regulators who would work to reverse anticompetitive mergers in tech. Amazon, for instance, would be required to divest Zappos and Whole Foods, Facebook would have to get rid of WhatsApp and Instagram, and Google would have to say goodbye to Nest, its smart-home business, and to Waze, a digital navigation service.
Warren says that this and her platform proposal will benefit small businesses, beef up privacy, and help content creators like local newspapers and musicians make more money.
The great backlash: There are plenty of reasons to be concerned about Big Tech’s reach, as we have highlighted. The influence that companies like Amazon, Google, and Facebook have over what we read, watch, and buy is unprecedented—and it poses unprecedented challenges for traditional antitrust regimes.
Even if Warren isn’t elected, her proposals are likely to influence other candidates in the presidential race. Expect big tech companies to weigh in against them—and to take steps to make it harder for them to be broken up. Facebook has done this by announcing plans to integrate its WhatsApp, Instagram, and Facebook Messenger services far more tightly, though that may not be enough to keep regulators at bay.

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