Here's Elizabeth Warren's Plan To Break Up Huge Tech Platforms Like Facebook, Google, And Amazon
Warren would classify tech companies with global revenue of $25 billion or more as "platform utilities" and attempt to break them up via antitrust laws.
Sen. Elizabeth Warren published an extensive plan on Friday to break up big tech companies likes Facebook, Google, Amazon, and Apple.
If elected president in 2020, Warren, a Massachusetts Democrat, said that she would pass legislation that would classify large tech platforms with annual global revenue of $25 billion or more as "platform utilities," and break them apart via antitrust laws.
"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," according to the plan.
Facebook reported revenue of $55.8 billion in 2018; Google reported $136.8 billion; Amazon reported $232.9 billion in sales; and Apple $265.6 billion. While the plan didn't refer specifically to Apple, a spokesperson for Warren told BuzzFeed News, "Apple is covered by Senator Warren's policy. They are above $25 billion in revenue and so they would have to structurally separate — choosing between, for example, running the App Store or offering their own apps."
Warren's proposal also would require smaller companies with annual global revenue between $90 million and $25 billion to meet similar standards, however, they would not have to be structurally separate from their online marketplaces.
It's the most far-reaching detailed proposal of any 2020 candidate so far to tackle the growing power and influence of these massive tech companies.
"Today’s big tech companies have too much power — too much power over our economy, our society, and our democracy," Warren wrote in the Medium piece. "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."
Warren's proposal targets two practices she describes as anti-competitive. First, she would appoint regulators to reverse mergers that are anti-competitive, such as Facebook's acquisition of Instagram and WhatsApp, and Amazon's purchase of Whole Foods.
Second, she would prohibit tech platforms from participating in their own proprietary marketplace. She cites Amazon copying products from smaller companies on the Amazon Marketplace and then selling them at lower costs.
Warren's team declined to provide further details on how this plan would be implemented.
"We must ensure that today’s tech giants do not crowd out potential competitors, smother the next generation of great tech companies, and wield so much power that they can undermine our democracy," Warren wrote.
Warren's proposal is similar to current antitrust action against Facebook in Germany. The country ruled last month that Facebook had abused its market share by merging and collecting user data. The German competition authority plans to impose restrictions on how Facebook collects data across its family of apps. Facebook said in a blog post that it plans to appeal the decision.
Matt Stoller, a fellow at the Open Markets Institute, which focuses on monopoly power, told BuzzFeed News that Warren's proposal is "a huge deal and a great moment for democracy. I’m not overstating it."
"These companies are destroying the free press and they're destroying and dominating American commerce," Stoller said. "The only way to fix that is to break them up and unwind the conflicts of interest in the business models, and that's what she's doing."
Warren's plan does have its critics, however. Jessica Melugin, associate director of CEI’s Center for Technology and Innovation, said in a statement Friday that the proposal would be bad for consumers and for innovation.
“There’s no need to run this doomed regulatory experiment in the US; European-style meddling has left that continent without one tech company in the global top 10 and, more generally, government control of industry is currently on full and tragic display in Venezuela," Melugin said.
Warren plans to hold a rally Friday night in Long Island City, the same area that Amazon intended on building a second headquarters until the company pulled out last month amid backlash from activists and some lawmakers.
BuzzFeed News has reached out to Google and Amazon for comment. Facebook and Apple declined to comment.
Ryan Mac contributed reporting to this story.