U.S. Senator Elizabeth Warren vows to break up Amazon, Google and Facebook if elected president

Elizabeth Warren
Senator Elizabeth Warren (D-MA) questions panelists testifying before Senate Armed Services subcommittees on the Military Housing Privatization Initiative in Washington, U.S.

Senator Elizabeth Warren vowed on Friday to break up Amazon.com Inc, Alphabet Inc’s Google and Facebook Inc if elected U.S. president to promote competition in the tech sector.

Warren, who is seeking to stand out in a crowded field of presidential candidates, said in a blog post that on their way to the top, the big tech companies purchased a long list of potential competitors, like Facebook’s acquisition of Instagram.

“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 wrote.

Warren said that she would nominate regulators who would unwind acquisitions such as Facebook’s deals for WhatsApp and Instagram, Amazon’s deals for Whole Foods and Zappos, and Google’s purchases of Waze, Nest and DoubleClick.

Investors shrugged off her comments, with shares in the three companies barely affected. Shares of Facebook and Alphabet were each down less than 0.5 percent on Friday. Amazon.com was down 0.9 percent.

It is rare for the government to seek to undo a consummated deal.

The most famous case in recent memory is the government’s effort to break up Microsoft. The Justice Department won a preliminary victory in 2000 but was reversed on appeal. The case settled with Microsoft intact.

Warren also proposed legislation that would require tech companies like Google and Amazon who offer an online marketplace or exchange to refrain from competing on their own platform. This would, for example, forbid Amazon from selling on its own Amazon Marketplace platform.

The tech companies have come under fire because of their role in displacing existing businesses. Amazon has replaced brick and mortar stores and has been criticized for its poorly-paid warehouse workers.

Facebook has angered lawmakers for losing track of users’ data and for not doing more to stop foreign meddling in the 2016 U.S. presidential election. Google has clashed with smaller companies, like Yelp, over search placements and has raised concerns it would comply with China’s internet censorship and surveillance policies if it re-enters the Asian nation’s search engine market.

Congress held a series of hearings last year looking at the dominance of major tech companies.

NetChoice, an e-commerce trade group whose members include Facebook and Google, said Warren’s plan would lead to higher prices.

“Sen. Warren is wrong in her assertion that tech markets lack competition. Never before have consumers and workers had more access to goods, services, and opportunities online,” said Carl Szabo, vice president and general counsel for NetChoice.

Public Knowledge, a tech policy group, called Warren’s plan a step toward protecting the next generation of businesses but stopped short of a full-throated support for breaking up the tech giants.

“We need legislation specifically targeted to enhance competition on digital platforms so that there is a real opportunity for new, innovative competitors to succeed,” said Charlotte Slaiman, the group’s policy counsel.

Tech expert Tim Wu, who coined the term “net neutrality” and has warned against an economy dominated by a few giant firms, tweeted that it was “heartening” to see the idea of breaking up the tech giants gaining some traction.

Tech companies are some of the biggest political donors. Google spent $21 million to lobby in 2018 while Amazon spent $14.2 million and Facebook spent $12.62 million, according to their filings to U.S. Congress.

Angering a deep-pocketed industry could hurt Democrats.

Warren made her political mark by going after big banks after the 2007-2009 financial crisis. In the Senate, Warren continues to be an outspoken critic of Wall Street and is a leader of her party’s progressive wing.

Other candidates have also criticized the tech firms.

Senator Amy Klobuchar of Minnesota used her presidential campaign launch speech to vow action on digital issues like privacy, saying “big tech companies” misuse personal data.

Vermont’s Bernie Sanders, another presidential candidate, in 2018 even named a bill after Amazon founder Jeff Bezos, the Stop BEZOS Act, which would tax big companies if their employees receive public benefits.

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