(Reuters) – 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 Democratic 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 in a post medium.com/@teamwarren/heres-how-we-can-break-up-big-tech-9ad9e0da324c on Medium.
Warren said 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. Shares of Facebook closed up 0.3 percent on Friday, while Alphabet fell 0.08 percent and Amazon.com lost 0.3 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 that offer an online marketplace or exchange to refrain from competing on their own platform. This would, for example, forbid Amazon itself from selling on its Amazon Marketplace platform.
Amazon and Google did not immediately respond to requests for comment. Facebook declined comment.
“AN ARCHAIC IDEA”
Tech companies have come under fire because of their role in displacing existing businesses. Amazon has replaced many brick-and-mortar stores and has been criticized for poorly paying its 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.
“Senator 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.
In Washington, the president of the U.S. Chamber of Commerce, Tom Donohue, said breaking up the big tech companies would “take us back to the Stone Age.”
“This is not a vision for the future, but an archaic idea that should be dumped in your computer trash can,” he said.
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.
Tim Wu, a professor of law, science and technology at Columbia Law School who coined the term “net neutrality” and has warned against an economy dominated by a few giant firms, said in a tweet 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, but that is not likely to be a big worry for Warren, who made her political mark and plenty of enemies by going after big banks after the 2007-09 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 Democratic candidates have also criticized the tech firms.
Senator Amy Klobuchar used her campaign launch speech to vow action on digital issues like privacy, saying “big tech companies” misuse personal data.
Senator 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.
Reporting by Diane Bartz; editing by Meredith Mazzilli, Nick Zieminskiand Leslie Adler
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