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| Elizabeth Warren Proposes Breaking Up Tech Giants Like Amazon and Facebook | Elizabeth Warren Proposes Breaking Up Tech Giants Like Amazon and Facebook |
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| Senator Elizabeth Warren, the Massachusetts Democrat who is bidding to be the policy pacesetter in the Democratic presidential primary, announced another expansive idea on Friday: a regulatory plan aimed at breaking up some of America’s largest tech companies, including Amazon, Google, Apple and Facebook. | |
| The proposal — which comes on the same day Ms. Warren will hold a rally in Long Island City, the Queens neighborhood that was to be home to a major new Amazon campus — calls for the appointment of regulators who would “unwind tech mergers that illegally undermine competition,” as well as legislation that would prohibit platforms from both offering a marketplace for commerce and participating in that marketplace. | The proposal — which comes on the same day Ms. Warren will hold a rally in Long Island City, the Queens neighborhood that was to be home to a major new Amazon campus — calls for the appointment of regulators who would “unwind tech mergers that illegally undermine competition,” as well as legislation that would prohibit platforms from both offering a marketplace for commerce and participating in that marketplace. |
| Ms. Warren’s plan would also force the rollback of some acquisitions by technological giants, the campaign said, including Facebook’s deals for WhatsApp and Instagram, Amazon’s addition of Whole Foods, and Google’s purchase of Waze. Companies would be barred from transferring or sharing users’ data with third parties. Dual entities, such as Amazon Marketplace and AmazonBasics, would be split apart. | Ms. Warren’s plan would also force the rollback of some acquisitions by technological giants, the campaign said, including Facebook’s deals for WhatsApp and Instagram, Amazon’s addition of Whole Foods, and Google’s purchase of Waze. Companies would be barred from transferring or sharing users’ data with third parties. Dual entities, such as Amazon Marketplace and AmazonBasics, would be split apart. |
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| “I want a government that makes sure everybody — even the biggest and most powerful companies in America — plays by the rules,” Ms. Warren said in a morning statement. “To do that, we need to stop this generation of big tech companies from throwing around their political power to shape the rules in their favor and throwing around their economic power to snuff out or buy up every potential competitor.” | “I want a government that makes sure everybody — even the biggest and most powerful companies in America — plays by the rules,” Ms. Warren said in a morning statement. “To do that, we need to stop this generation of big tech companies from throwing around their political power to shape the rules in their favor and throwing around their economic power to snuff out or buy up every potential competitor.” |
| During a brief interview later in New York, Ms. Warren refused to say whether Gov. Andrew M. Cuomo was right to have offered hefty tax incentives to Amazon in return for the proposed campus in Queens. Boston Mayor Martin J. Walsh, from Ms. Warren’s home state, also offered similar incentives. | During a brief interview later in New York, Ms. Warren refused to say whether Gov. Andrew M. Cuomo was right to have offered hefty tax incentives to Amazon in return for the proposed campus in Queens. Boston Mayor Martin J. Walsh, from Ms. Warren’s home state, also offered similar incentives. |
| “That’s not the point,” she said. “Before you even get into the question of do you need to change the statutes, there are structural changes you can make in the economy to prevent Amazon from dancing its way across America saying, ‘What will you offer me if I came?’” | “That’s not the point,” she said. “Before you even get into the question of do you need to change the statutes, there are structural changes you can make in the economy to prevent Amazon from dancing its way across America saying, ‘What will you offer me if I came?’” |
| The announcement reverberated on Friday from New York to Silicon Valley. Pressure for elected officials to place additional oversight on mega-tech companies has been building for months, particularly after revelations that companies such as Facebook may have violated customer privacy agreements. Ms. Warren is also sending a political warning shot across the Democratic primary field, where decisions on how much to embrace or reject Silicon Valley and its wealthy donors could become an important dividing line among candidates. | The announcement reverberated on Friday from New York to Silicon Valley. Pressure for elected officials to place additional oversight on mega-tech companies has been building for months, particularly after revelations that companies such as Facebook may have violated customer privacy agreements. Ms. Warren is also sending a political warning shot across the Democratic primary field, where decisions on how much to embrace or reject Silicon Valley and its wealthy donors could become an important dividing line among candidates. |
| In the wide-open nomination race, Democrats such as Ms. Warren, Senator Bernie Sanders of Vermont and Senator Amy Klobuchar of Minnesota have expressed a willingness to limit the influence of companies such as Facebook, Google, Apple and Amazon — though Mr. Sanders and Ms. Klobuchar have yet to present clear policy details. Senator Kamala Harris, who represents many of those companies based in her home state of California, has repeatedly pressed executives on consumer privacy but has stayed away from direct calls to limit their influence. Senator Cory Booker of New Jersey has been more willing to embrace the controversial corporations, who have frequently used their vast resources to lobby politicians of both parties. | In the wide-open nomination race, Democrats such as Ms. Warren, Senator Bernie Sanders of Vermont and Senator Amy Klobuchar of Minnesota have expressed a willingness to limit the influence of companies such as Facebook, Google, Apple and Amazon — though Mr. Sanders and Ms. Klobuchar have yet to present clear policy details. Senator Kamala Harris, who represents many of those companies based in her home state of California, has repeatedly pressed executives on consumer privacy but has stayed away from direct calls to limit their influence. Senator Cory Booker of New Jersey has been more willing to embrace the controversial corporations, who have frequently used their vast resources to lobby politicians of both parties. |
| “Our technology industry is the envy the world and we need policies that will foster innovation and consumer choice — but we also need stronger enforcement of antitrust law,” said Ro Khanna, the California House Democrat who represents Silicon Valley headquarters of companies such as Apple and eBay. He said blanket statements against big tech companies weren’t helpful, but that each company needs to be “evaluated on a case-by-case basis and afforded due process.” | “Our technology industry is the envy the world and we need policies that will foster innovation and consumer choice — but we also need stronger enforcement of antitrust law,” said Ro Khanna, the California House Democrat who represents Silicon Valley headquarters of companies such as Apple and eBay. He said blanket statements against big tech companies weren’t helpful, but that each company needs to be “evaluated on a case-by-case basis and afforded due process.” |
| [Check out the Democratic field with our candidate tracker.] | [Check out the Democratic field with our candidate tracker.] |
| Ms. Warren’s plan creates two tiers of companies that would fall under the new regulations: those that have an annual global revenue of $25 billion or more, and those with annual revenue of $90 million to $25 billion. The upper tier would be required to “structurally separate” their products from their marketplace. Smaller companies would be subject to regulations but would not be forced to separate themselves from the online marketplace. | Ms. Warren’s plan creates two tiers of companies that would fall under the new regulations: those that have an annual global revenue of $25 billion or more, and those with annual revenue of $90 million to $25 billion. The upper tier would be required to “structurally separate” their products from their marketplace. Smaller companies would be subject to regulations but would not be forced to separate themselves from the online marketplace. |
| Ms. Warren, who has previously said moving to Boston would have been a “good opportunity” for Amazon, said in a Medium post Friday morning that companies have grown so powerful that they can bully cities and states into showering them with massive taxpayer handouts in exchange for doing business, and can act — in the words of Mark Zuckerberg — “more like a government than a traditional company.” | Ms. Warren, who has previously said moving to Boston would have been a “good opportunity” for Amazon, said in a Medium post Friday morning that companies have grown so powerful that they can bully cities and states into showering them with massive taxpayer handouts in exchange for doing business, and can act — in the words of Mark Zuckerberg — “more like a government than a traditional company.” |
| This is a refrain she has hit for years, including in a 2016 speech titled “Reigniting Competition in the American Economy.” Last year, she introduced the Accountable Capitalism Act, which seeks to curb shareholder power by forcing corporations to increase worker representation on their governing boards, while also reducing incentives for big companies to pay out shareholders rather than reinvest in businesses. | This is a refrain she has hit for years, including in a 2016 speech titled “Reigniting Competition in the American Economy.” Last year, she introduced the Accountable Capitalism Act, which seeks to curb shareholder power by forcing corporations to increase worker representation on their governing boards, while also reducing incentives for big companies to pay out shareholders rather than reinvest in businesses. |
| Matt Stoller, a fellow at the Open Markets Institute in Washington and a former senior adviser to the Senate Budget Committee, said Ms. Warren’s plan was “practical” and “necessary.” He compared big tech companies to the tobacco monopolies of America’s past, which were eventually subjected to antitrust lawsuits. | Matt Stoller, a fellow at the Open Markets Institute in Washington and a former senior adviser to the Senate Budget Committee, said Ms. Warren’s plan was “practical” and “necessary.” He compared big tech companies to the tobacco monopolies of America’s past, which were eventually subjected to antitrust lawsuits. |
| “There’s been a traditional sense around the politics of D.C. that these companies are progressive,” Mr. Stoller said. “Their employees give to Democrats, they’re friendly to social liberalism, there’s an idealism to how they talk about the world. That’s been the traditional sense.” | “There’s been a traditional sense around the politics of D.C. that these companies are progressive,” Mr. Stoller said. “Their employees give to Democrats, they’re friendly to social liberalism, there’s an idealism to how they talk about the world. That’s been the traditional sense.” |
| “But these companies have the moral frame of Big Tobacco,” he added. “They don’t care.” | “But these companies have the moral frame of Big Tobacco,” he added. “They don’t care.” |
| Carl Szabo, who is vice president at an e-commerce trade association called NetChoice, said he felt Ms. Warren’s plan was unnecessary. He warned that it could lead to weaponization of antitrust laws, as legislators target companies deemed to be their enemies. | Carl Szabo, who is vice president at an e-commerce trade association called NetChoice, said he felt Ms. Warren’s plan was unnecessary. He warned that it could lead to weaponization of antitrust laws, as legislators target companies deemed to be their enemies. |
| “Politicizing and weaponizing antitrust law is ripe for abuse,” said Mr. Szabo, who is a professor of privacy law at George Mason University’s law school. “We’ve already seen how politics can inject itself into antitrust reviews, and I don’t think our legislators should be encouraging this precedent.” | “Politicizing and weaponizing antitrust law is ripe for abuse,” said Mr. Szabo, who is a professor of privacy law at George Mason University’s law school. “We’ve already seen how politics can inject itself into antitrust reviews, and I don’t think our legislators should be encouraging this precedent.” |
| Though tech giants have experienced several controversies in recent years, it is unclear how popular Ms. Warren’s antitrust proposal would be with voters. Rob Atkinson, president of Information Technology and Innovation Foundation, an industry-sponsored group, defended the power of big companies in the technology sector for what he described as benefits to consumers. | Though tech giants have experienced several controversies in recent years, it is unclear how popular Ms. Warren’s antitrust proposal would be with voters. Rob Atkinson, president of Information Technology and Innovation Foundation, an industry-sponsored group, defended the power of big companies in the technology sector for what he described as benefits to consumers. |
| “The Warren campaign’s call to break up big tech companies reflects a ‘big is bad, small is beautiful’ ideology run amok,” Mr. Atkinson said. “The proposal ignores the fact that many of the services big tech companies now provide free used to cost consumers money.” | “The Warren campaign’s call to break up big tech companies reflects a ‘big is bad, small is beautiful’ ideology run amok,” Mr. Atkinson said. “The proposal ignores the fact that many of the services big tech companies now provide free used to cost consumers money.” |
| Matt McIlwain, a partner at the Seattle venture capital firm Madrona Venture Group, which was an early Amazon investor, said in an email, “Senator Warren and others with a similar mind-set are misguided on the need to break up larger tech companies.” | Matt McIlwain, a partner at the Seattle venture capital firm Madrona Venture Group, which was an early Amazon investor, said in an email, “Senator Warren and others with a similar mind-set are misguided on the need to break up larger tech companies.” |
| “Companies in the innovation economy have a strong track record of creating quality products and services that are often free or at dramatically lower costs than previous services,” Mr. McIlwain said. | “Companies in the innovation economy have a strong track record of creating quality products and services that are often free or at dramatically lower costs than previous services,” Mr. McIlwain said. |
| In the announcement, Ms. Warren’s team included praise from several scholars on internet privacy and technology regulation, including Siva Vaidhyanathan from the University of Virginia and Frank Pasquale of the University of Maryland’s School of Law. For those closely watching the Democratic presidential nomination contest, the announcement was another example of Ms. Warren’s political strategy, which is to appeal to voters based on policy ideas and retail politics, not soaring oration or feel-good messages of unity. | In the announcement, Ms. Warren’s team included praise from several scholars on internet privacy and technology regulation, including Siva Vaidhyanathan from the University of Virginia and Frank Pasquale of the University of Maryland’s School of Law. For those closely watching the Democratic presidential nomination contest, the announcement was another example of Ms. Warren’s political strategy, which is to appeal to voters based on policy ideas and retail politics, not soaring oration or feel-good messages of unity. |
| In January, Faiz Shakir, then the national political director for the American Civil Liberties Union, said, “Elizabeth Warren is trying to position herself as the ideas candidate of the field, and thus far, in the early going, she’s winning that.” | In January, Faiz Shakir, then the national political director for the American Civil Liberties Union, said, “Elizabeth Warren is trying to position herself as the ideas candidate of the field, and thus far, in the early going, she’s winning that.” |
| “Others should start thinking about competing in the arena for new ideas,” Mr. Shakir added. He has since joined Mr. Sanders’s presidential bid as its campaign manager. | “Others should start thinking about competing in the arena for new ideas,” Mr. Shakir added. He has since joined Mr. Sanders’s presidential bid as its campaign manager. |