- Sen.
Elizabeth
Warren
« Big
Tech Proposal
Warren for President
For Immediate Release: Friday, March 8, 2019
Warren Unveils Proposal to Break Up Big Tech
Long
Island
City,
NY - Today,
Elizabeth Warren announced a tech reform proposal to 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.
Read more about Warren’s proposal here and
below:
Breaking Up Big Tech
By Elizabeth Warren
Twenty-five
years ago, Facebook, Google, and Amazon didn’t exist. Now they are
among the most valuable and well-known companies in the world. It’s a
great story – but also one that highlights why the government must
break up monopolies and promote competitive markets.
In the
1990s, Microsoft – the tech giant of its time – was trying to parlay
its dominance in computer operating systems into dominance in the new
area of web browsing. The federal government sued Microsoft for
violating anti-monopoly laws and eventually reached a settlement. The
government’s antitrust case against Microsoft helped clear a
path
for
Internet
companies
like
Google and Facebook to emerge.
The
story demonstrates why promoting competition is so important: it allows
new, groundbreaking companies to grow and thrive -- which pushes
everyone in the marketplace to offer better products and services.
Aren’t we all glad that now we have the option of using Google instead
of being stuck with Bing?
Today’s big tech companies have too
much power -- too much power over our economy, our society, and our
democracy. 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.
I
want a government that makes sure everybody -- even the biggest and
most powerful companies in America -- plays by the rules. And I want to
make sure that the next generation of great American tech companies can
flourish. 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.
That’s why my Administration
will make big, structural changes to the tech sector to promote more
competition—including breaking up Amazon, Facebook, and Google.
How the New Tech Monopolies Hurt Small Businesses and Innovation
America’s big tech companies provide valuable products but also wield
enormous power over our digital lives. Nearly half of
all
e-commerce
goes
through
Amazon.
More than 70% of
all
Internet
traffic
goes
through
sites owned or operated by Google or
Facebook.
As
these companies have grown larger and more powerful, they have used
their resources and control over the way we use the Internet to squash
small businesses and innovation, and substitute their own financial
interests for the broader interests of the American people. To restore
the balance of power in our democracy, to promote competition, and to
ensure that the next generation of technology innovation is as vibrant
as the last, it’s time to break up our biggest tech companies.
America’s big tech companies have achieved their level of dominance in
part based on two strategies:
- Using Mergers to Limit Competition.
Facebook
has
purchased
potential
competitors
Instagram
and WhatsApp.
Amazon has used its immense market power to force smaller competitors
like Diapers.com to
sell
at
a
discounted
rate.
Google
has snapped up the mapping company
Waze and the ad company DoubleClick. Rather than blocking these
transactions for their negative long-term effects on competition and
innovation, government regulators have waved them through.
- Using Proprietary Marketplaces to Limit Competition. 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. 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.
Weak
antitrust
enforcement
has
led
to a dramatic reduction in competition
and innovation in the tech sector. 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.
With
fewer competitors entering the market, the big tech companies do not
have to compete as aggressively in key areas like protecting our
privacy. And some of these 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.”
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.
Restoring Competition in the Tech Sector
America
has a long tradition of breaking up companies when they have become too
big and dominant -- even if they are generally providing good service
at a reasonable price.
A century ago, in the Gilded Age, waves
of mergers led to the creation of some of the biggest companies in
American history -- from Standard Oil and JPMorgan to the railroads and
AT&T. In response to the rise of these “trusts,” Republican and
Democratic reformers pushed for antitrust laws to break up these
conglomerations of power to ensure competition.
But where the
value of the company came from its network, reformers recognized that
ownership of a network and participating on the network caused a
conflict of interest. Instead of nationalizing these industries -- as
other countries did -- Americans in the Progressive Era decided to
ensure that these networks would not abuse their power by charging
higher prices, offering worse quality, reducing innovation, and
favoring some over others. We required a structural separation between
the network and other businesses, and also demanded that the network
offer fair and non-discriminatory service.
In this tradition, my administration would restore competition to the
tech sector by taking two major steps:
First,
by passing legislation that requires large tech platforms to be
designated as “Platform Utilities” and broken apart from any
participant on that platform.
Companies with an annual
global revenue of $25 billion or more and that offer to the public an
online marketplace, an exchange, or a platform for connecting third
parties would be designated as “platform utilities.”
These
companies would be prohibited from owning both the platform utility and
any participants on that platform. Platform utilities would be required
to meet a standard of fair, reasonable, and nondiscriminatory dealing
with users. Platform utilities would not be allowed to transfer or
share data with third parties.
For smaller companies (those with
annual global revenue of between $90 million and $25 billion), their
platform utilities would be required to meet the same standard of fair,
reasonable, and nondiscriminatory dealing with users, but would not be
required to structurally separate from any participant on the platform.
To
enforce these new requirements, federal regulators, State Attorneys
General, or injured private parties would have the right to sue a
platform utility to enjoin any conduct that violates these
requirements, to disgorge any ill-gotten gains, and to be paid for
losses and damages. A company found to violate these requirements would
also have to pay a fine of 5 percent of annual revenue.
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.
Second, my administration would appoint regulators committed to
reversing illegal and anti-competitive tech mergers.
Current
antitrust laws empower federal regulators to break up mergers that
reduce competition. I will appoint regulators who are committed to
using existing tools to unwind anti-competitive mergers,
including:
- Amazon: Whole Foods; Zappos
- Facebook: WhatsApp; Instagram
- Google: Waze; Nest; DoubleClick
Unwinding
these
mergers
will
promote
healthy competition in the market -- which
will put pressure on big tech companies to be more responsive to user
concerns, including about privacy.
Protecting the Future of the Internet
So what would the Internet look like after all these reforms?
Here’s what won’t change:
You’ll still be able to go on Google and search like you do today.
You’ll still be able to go on Amazon and find 30 different coffee
machines that you can get delivered to your house in two days. You’ll
still be able to go on Facebook and see how your old friend from school
is doing.
Here’s what will change:
Small businesses would have a fair shot to sell their products on
Amazon without the fear of Amazon pushing them out of business. Google
couldn’t smother competitors by demoting their products on Google
Search. Facebook would face real pressure from Instagram and WhatsApp
to improve the user experience and protect our privacy. Tech
entrepreneurs would have a fighting chance to compete against the tech
giants.
Of course, my proposals today won’t solve every problem we have with
our big tech companies.
We
must give people more control over how their personal information is
collected, shared, and sold—and do it in a way that doesn’t lock in
massive competitive advantages for the companies that already have a
ton of our data.
We must help America’s content creators—from
local newspapers and national magazines to comedians and musicians —
keep more of the value their content generates, rather than seeing it
scooped up by companies like Google and Facebook.
And we must
ensure that Russia — or any other foreign power — can’t use
Facebook or
any other form of social media to influence our elections.
Those
are each tough problems, but the benefit of taking these steps to
promote competition is that it allows us to make some progress on each
of these important issues too. More competition means more options for
consumers and content creators, and more pressure on companies like
Facebook to address the glaring problems with their businesses.
Healthy
competition can solve a lot of problems. 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.
###
For Immediate Release: Sunday, March 10, 2019
Elizabeth Warren is “Absolutely Right” about Big Tech
Warren “shows exactly how she’d put her progressive values into practice”
Boston, MA - Elizabeth Warren’s new proposal to break up Big Tech has sparked a necessary, long overdue debate about the power of tech giants and their ability to smother competition and undermine our democracy. You can read more about it here.[Antitrust and competition scholar]
Lina Khan @linamkhan These structural separations are a smart proposal & reflect a key principle we've traditionally applied to dominant firms in network industries
https://twitter.com/linamkhan/
[Co-director at the Institute for Local Self-Reliance]
Stacy Mitchell @stacyfmitchell Today Sen. @ewarren called for breaking up Amazon and other big tech companies. Her proposal is smart. It zeros in on the core problem and solves it in a practical way.
https://twitter.com/
[Julius Silver Professor of Law, Science and Technology at Columbia Law School]
Tim Wu @superwuster They said antitrust would never be a campaign issue again -- but here comes Warren is out of the gate with strong proposals to break up tech giants. Let us see what happens to the rest of the 2020 field!
https://twitter.com/
New York Magazine: Elizabeth Warren’s Plan to Break Up Big Tech Is Extremely Aggressive. Good.
Howard Fineman @howardfineman .@ewarren is a thoughtful foe of unaccountable power. The digital-social platforms have metastasized into just that, as did railroads and trusts a century ago; as did the “phone company” in the 70s and banks a decade ago. Like TR, she wants to keep the Market’s arteries clean.
https://twitter.com/
Jon Favreau @jonfavs Elizabeth Warren is really driving the policy debate among the 2020 candidates. It’s impressive.
https://twitter.com/jonfavs/
[Associate Professor of Law at Fordham University]
Zephyr Teachout @ZephyrTeachout Elizabeth Warren's plan to break up Amazon, Google and Facebook is incredibly well thought out. It is also a huge moment in American politics. A genuinely big idea that would transform the economy for the better.
https://twitter.com/
[Fellow at the Open Markets Institute]
Matt Stoller @matthewstoller Boom. Elizabeth Warren calls for breaking up Google, Amazon, and Facebook. It's a good week for anti-monopolists.
https://twitter.com/
GQ: Elizabeth Warren’s Plan to Break Up Big Tech Is a Debate 2020 Democrats Need to Have.
Jon Sarlin @jonsarlin Warren hits on something @superwuster has been raising: antitrust and privacy are deeply connected. Without any real competition, the tech giants haven't been compelled to take drastic actions to protect customer privacy.
https://twitter.com/jonsarlin/
The Week: Elizabeth Warren is absolutely right about Big Tech
Luther Lowe @lutherlowe Recall, @SenWarren publicly called out Google for giving its local results an unfair advantage in 2016. She’s been a bold leader from the start. This proposal is a serious one which would inject much-needed oxygen into the consumer internet market.
https://twitter.com/
James Ball @jamesrbuk This is very tough talk from Elizabeth Warren on big tech here. Some smart aspects to it, too. Can’t accuse her of tinkering at the margins.
https://twitter.com/jamesrbuk/
Sen. Mike Gianaris @SenGianaris Welcome to LIC, @SenWarren! These are the types of bold ideas we need
https://twitter.com/
Makena Kelly @kellymakena If you haven't been following, this is the first significant antitrust platform from any presidential candidate. Other lawmakers have often made "all options are on the table" remarks when it comes to antitrust/tech, but haven't leaned as far into breakups as Warren just did.
https://twitter.com/
Christopher Shay @ChrisBurkeShay Elizabeth Warren announced a detailed plan today to break up big tech. She told @gzornick that this is what she wanted to do a year ago. She's been nothing if not consistent on the importance of confronting monopoly power:
https://twitter.com/
VICE News @vicenews It’s a bold idea from Sen. Elizabeth Warren, and it’s sure to outrage massive tech companies that control a large amount of the world’s wealth.
https://twitter.com/vicenews/
Charlie Pierce: “...Warren’s plan not only is a frontal assault on monopoly power like we haven’t seen since Bob LaFollette was raising hell, the plan also forces upon the Democratic Party a debate that is at least four decades overdue.”
Asher Schechter @AsherSchechter This part of Warren's proposal to break up Big Tech is incredibly bold and fairly radical: "Amazon Marketplace, Google’s ad exchange, and Google Search would be platform utilities ... Google Search would have to be spun off as well."
https://twitter.com/
Jeet Heer @HeerJeet In policy terms, Warren's push to revive the Brandeis anti-monopoly tradition for the digital age is the most interesting thing happening right now. Like classic progressivism, has ability to transcend political divide.
https://twitter.com/HeerJeet/
Jonathan Cohn @CitizenCohn With a new proposal to break up tech giants, @ewarren once again shows she has thought a lot about policy -- and has some clear priorities for what she would do as president.
https://twitter.com/
The Lead CNN @TheLeadCNN Begala: Warren's tech proposal could gain support across party lines
https://twitter.com/