Warren proposes breaking up Amazon, Google and Facebook

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Warren proposes breaking up Amazon, Google and Facebook

By Dan Berthiaume - 03/08/2019
Presidential hopeful Sen. Elizabeth Warren (D-MA) is publicly calling for the government to break up what she calls the “monopolies” of Amazon, Google, and Facebook.

In a public post on the blogging site Medium, Warren says her presidential administration would make “big, structural changes” to promote competition in America’s tech sector, including breaking up Amazon, Google, and Facebook.

“Today’s big tech companies have too much power — too much power over our economy, our society, and our democracy,” Warren states in the 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.”

To demonstrate what she sees as the excessive influence of these three companies, Warren cites figures such as nearly half of all e-commerce goes through Amazon and more than 70% of Internet traffic goes through companies owned by Google or Facebook.

In addition to accusing these three companies of stifling competition by using their market power to pressure smaller companies into mergers, Warren calls out their proprietary third-party marketplaces as unfairly limiting completion.

“Many big tech companies own a marketplace — where buyers and sellers transact — while also participating on the marketplace,” states Warren. “This can create a conflict of interest that undermines competition. Amazon crushes small companies by copying the goods they sell on the Amazon Marketplace and then selling its own branded version. Google allegedly snuffed out a competing small search engine by demoting its content on its search algorithm, and it has favored its own restaurant ratings over those of Yelp.”

As a remedy to what she sees as an unfair situation, Warren says her administration would restore competition in technology with two key steps. First, she would seek to pass legislation requiring companies with annual revenue of $25 billion or more that offer a public online marketplace, exchange, or platform for connecting third parties to be designated as “platform utilities.”

Platform utilities of this size could not own both their utility and any third-party participants. They would also have to meet a standard of “fair, reasonable, and nondiscriminatory dealing” with users, and not transfer or share user data with third parties.

Companies with annual revenue between $90 million and $25 billion meeting the definition of platform utilities would have to follow the same standard of dealing with their users, but would not be restricted from owning third-party participants.

Any platform utility found in violation of these rules could be sued by the government and/or private citizens, and also have to pay a fine of 5% of annual revenue. Warren specifies Amazon Marketplace, as well as the Google ad exchange and search features, as meeting the platform utility definition. Under her proposed regulations, these segments would have to be spun off from their parent companies.

Second, Warren would appoint federal regulators to break up existing mergers she feels reduce competition. She mentions Amazon’s mergers with Whole Foods and Zappos, Facebook’s mergers with What’sApp and Instagram, and Google’s mergers with Waze, Nest, and DoubleClick as deals her administration would target.

As a result, Warren says that consumers could still use Amazon, Google, and Facebook the same as they do today, but with fair competition from other tech companies.

“Healthy competition can solve a lot of problems,” concludes Warren. “The steps I’m proposing today will allow existing big tech companies to keep offering customer-friendly services, while promoting competition, stimulating innovation in the tech sector, and ensuring that America continues to lead the world in producing cutting-edge tech companies. It’s how we protect the future of the Internet.”

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