Should the government break up Big Tech? | The Tylt
Should the government break up Big Tech?
Warren delineated her proposal in a Medium post in early March. Warren claims tech companies have created monopolies which never would have been allowed in other industries, using their total control to cull massive amounts of information from unwitting users and to put competitors out of business.
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.
Her proposal includes two steps—breaking tech companies apart so they can no longer own both the "platform utilities" and the programs using that platform. Per the Verge:
Warren’s proposal includes a plan to pass legislation designating platforms with more than $25 billion in revenue as “platform utilities,” which would be barred from owning both the platform and “participants” on the platform at the same time. Smaller companies would not face the same requirements. A law like that would have immediate effects on the digital economy, the proposal continues, as Google is forced to spin off Search and Amazon spins off Marketplace.
Warren isn't alone in looking for ways to reign in tech companies. Politico reports numerous other Democratic presidential candidates, including Amy Klobuchar, Cory Booker and Bernie Sanders, have voiced support for reforming the tech industry. Per Politico:
Klobuchar sounded the theme at the very start of her campaign, during the announcement speech in February where she stood in blowing snow in Minneapolis.
“For too long the big tech companies have been telling you ‘Don’t worry! We’ve got your back!’ while your identities are being stolen and your data is mined,” the Minnesota senator said.
...Sanders, who declared his White House bid in mid-February, has railed against Amazon and CEO Jeff Bezos over everything from the wages the company pays its workers to its low aggregate tax. While Trump has raised the latter issue in the context of veiled threats against Bezos' Washington Post, Sanders has inveighed directly against Amazon's tax minimization efforts.
"I think most Americans would agree that it is a bit absurd in that you have in the case of Amazon a company owned by the wealthiest person in the world that made, I believe, 11 billion in profits last year and didn't pay a nickel in federal taxes," Sanders told POLITICO. "I don't think too many Americans think that makes sense."
Tech companies, however, claim the new regulations would dramatically increase operating costs for consumers. According to the Washington Post:
Carl Szabo, vice president of the free-market tech trade group NetChoice, said in a statement that the “proposal would increase prices for consumers, make search and maps less useful, and raise costs to small businesses that advertise online.” Szabo, whose group counts Google and Facebook as members, said that consumers have never “had more access to goods, services, and opportunities online.”
Slate reports there are concerns about whether this type of legislation could garner enough public support to succeed. Despite numerous scandals regarding fake news, security breaches and data mining in the last year, many sites have not seen a dramatic decrease in daily active users as there are no alternatives available to consumers.
If Amazon, Google, and Facebook become political punching bags for Democratic candidates this election cycle, it wouldn’t be beneath those companies to mount ad campaigns in their own self-defense, like how Facebook ran a full-page ad in the New York Times, Washington Post, and Wall Street Journal as the Cambridge Analytica scandal reached a boil. Even last year, though, usership didn’t appear to drop overall and the company remained profitable despite the scandal (and a huge hit to its stock), probably because Facebook is so dominant that users had nowhere else to go. Not to mention the fact that antitrust, while an important issue for anyone concerned with structural inequities in the economy, isn’t likely to be the thing that voters hang their hat on.
TIME reports some anti-trust experts do not believe existing laws can be used in the ways Warren is proposing. Relevant laws and regulations were written long before tech companies were created, and they cover what is now a relatively narrow set of circumstances.
Part of the issue is that the some of the concerns Warren seeks to address, particularly around data use and privacy violations, do not fall under traditional antitrust law, according to experts.
“Undoubtedly we should have serious concerns about privacy. How are we going to think about privacy now and in the future? But this is not an antitrust issue,” says antitrust expert and University of Arizona law professor Barak Orbach.
The main law that applies to antitrust cases is the Sherman Antitrust Act. Over the past several decades, the courts have interpreted antitrust law conservatively, Fox says, so finding violations typically requires a situation where a company’s actions are lowering output or raising prices.
These two concerns don’t necessarily cover the issues raised by big tech companies operating on the internet in 2019.
“Antitrust or competition policy has to catch up with the fact that we have these forms of restraint that are not about lowering output and raising price, but they are about amassing huge amounts of data and using it very profitably and amassing it often deceptively,” Fox said.