“Today’s big tech companies have too much power — too much power over our economy, our society, and our democracy”
US Senator Elizabeth Warren, a senior figure in the Democratic party and 2020 presidential candidate, has unveiled detailed campaign proposals to break up tech giants Amazon, Facebook and Google, singling out their use of proprietary market places to “crush competition”.
In one of the most stinging and explicit attack yet on the companies, Warren – a former Chair of the Congressional Oversight Panel and special adviser to the Secretary of the Treasury – said their market dominance means they can “bully cities and states” and are stifling innovation.
Calls for “Platform Utility” Designation
She demanded legislation that would prevent them from offering their own services on platforms they control. Under the plans, companies with an annual global revenue of $25 billion or more and that offer an online marketplace, an exchange, or a platform for connecting third parties would be designated as “platform utilities.”
“Amazon Marketplace, Google’s ad exchange, and Google Search would be platform utilities under this law. 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 today.
In a detailed Medium blog she added: “Many big tech companies own a marketplace — where buyers and sellers transact — while also participating on the marketplace. This can create a conflict of interest that undermines competition.”
She added: “Weak antitrust enforcement has led to a dramatic reduction in competition and innovation in the tech sector.”
Elizabeth Warren Break Up Plans Include Reversing Recent M&A
“Venture capitalists are now hesitant to fund new startups to compete with these big tech companies because it’s so easy for the big companies to either snap up growing competitors or drive them out of business. The number of tech startups has slumped, there are fewer high-growth young firms typical of the tech industry, and first financing rounds for tech startups have declined 22% since 2012″.
While the blog post doesn’t mention Apple, Warren’s campaign confirmed the iPhone company’s inclusion in the plan to reporters, saying Apple needs to choose between running the App Store or making apps itself.
She would also empower federal regulators to reverse what she describes as uncompetitive mergers including Amazon’s acquisitions of Whole Foods and Zappos; Facebook’s acquisitions of WhatsApp and Instagram and Google’s acquisitions of Waze, Nest and DoubleClick.
The companies have been contacted for comment.