The tech industry doesn’t think Sen. Warren’s idea to break up big tech companies is a good idea.
Presidential hopeful Sen. Elizabeth Warren, D-Mass., proposed breaking up tech titans Google, Facebook and Amazon Friday, arguing they act as monopolies with “too much power” that stifle small business and innovation.
“Today’s big tech companies have too much power—too much power over our economy, our society, and our democracy,” Warren said in a Medium post, adding that, if elected, her administration would break up Amazon, Facebook and Google. “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.”
Not surprisingly, tech think tanks and trade associations took issue with Warren’s proposal within hours, suggesting a tech breakup would harm—not help—consumers, especially in their wallets.
“Breaking up large internet companies just because they are large won’t help consumers. It will hurt them by reducing convenience, reducing quality of service and innovation, and in some cases leading to the introduction of priced services,” said Rob Atkinson, president of Information Technology and Innovation Foundation, a Washington, D.C.-based think tank for science and tech policy. “Consumers now benefit greatly from having one Amazon, one Google, and one Facebook. The goal of competition policy should be to enhance consumer welfare, not penalize companies for earning market share and operating at scale—yet that is exactly what the Warren proposal would do.”
Warren’s proposal likens the market-leading positions of Facebook, Google and Amazon—none of which existed 25 years ago—to Microsoft in the 1990s, when the software giant attempted to “parlay its dominance in computer operating systems into dominance in the new area of the web browsing.” The federal government sued Microsoft for violating anti-monopoly laws, ultimately reaching a settlement.
“The government’s antitrust case against Microsoft helped clear a path for internet companies like Google and Facebook to emerge,” said Warren, adding that today’s tech companies are throwing their newfound political and economic power to “shape rules in their favor.”
“I want a government that makes sure everybody—even the biggest and most powerful companies in America—plays by the rules,” Warren said.
Rather than break up companies, Atkinson argued a better solution involves passing new legislation geared for the modern age and emerging technologies.
“The answer is not to break up tech companies but to pass a national privacy framework, campaign finance reform legislation and laws regarding political ads,” Atkinson said.
Tech has been a hot topic of late for Congress, following a series of high-profile data and privacy scandals. Last April, Congress grilled Facebook CEO Mark Zuckerberg over revelations that data from 87 million Facebook users ended up in the hands of third-party firm Cambridge Analytica. Google CEO Sundar Pichai fielded questions about political bias, Chinese censorship and data privacy from Congress in December.
Congress has responded by calling for a federal data privacy law, though debate over what exactly such a law might look like is ongoing.
Ed Black, president of the Computer and Communications Industry Association—which represents member companies including Facebook, Google and Amazon—told Nextgov he agreed with Warren that “competition enforcement is a critical component of a healthy economy.” But Black argued the digital sector “is a highly competitive part of the U.S. economy,” where wages, job creation and labor share are “outperforming the rest of the economy.”
“This unwarranted and extreme proposal, which focuses on a highly admired and highly performing sector, is misaligned with progressive values, many of which are shared within the tech industry,” Black said.
A tech backlash has been in vogue in some politically progressive circles recently, with Rep. Alexandria Ocasio-Cortez, D-N.Y., leading a successful charge to stop Amazon from building a portion of its headquarters in the state. In some cases, employees at large tech firms, including