Elizabeth Warren says Big Tech must break up, protect privacy
The era of Big Tech may soon be over. Well, that’s if presidential hopeful Senator Elizabeth Warren (D-Mass.) has her way. A few weeks ago Warren, who has been the policy table-setter of the Democratic primary thus far, unveiled a massive regulatory plan aimed directly at Silicon Valley.
The proposal is designed to reign in major tech companies that have outsized power, both financially and over the public. Warren called out Facebook, Google, Amazon and Apple for their business practices.
Warren made the policy speech in the Long Island City neighborhood of Queens, New York. Some may know Long Island City as Amazon’s abandoned home for their second headquarters. Amazon held a dystopian sweepstakes in which seemingly every city in America competed to be the home of a corporation. Gov. Andrew Cuomo (D-N.Y.)and Mayor Bill DeBlasio trotted out billions of dollars in tax incentives Amazon graciously accepted. Soon a grassroots opposition movement started — eventually leading to Amazon’s withdrawal.
The regulations would break off several arms of these tech behemoths and increase scrutiny over acquisitions as well as banning the sharing of data to third parties. Warren’s plan calls for two designations of tech companies. The first type makes between $90 million and $25 billion. The second type makes more than $25 billion. Once a company crosses that high threshold, it is forced to separate its key businesses. Increased regulation around acquisitions would allow the startup market to flourish, abolishing Facebook’s strategy of acquiring over developing.
Under the proposal, Facebook would have to split apart WhatsApp and Instagram. Amazon would have to spin off both its main Amazon Marketplace and its line of consumer products, AmazonBasics. Google would be reformed into two separate businesses, Google Search and a platform for its ad business. Youtube and Waze, subsidiaries of Google, would also become independent companies. Apple, whose app store charges app-makers 30 to 50 percent on in-app subscriptions would be forced to either remove its apps from the store or relinquish that source of income.
One policy not in the proposal is the oligopolistic tactics surrounding the internet itself. Three companies control the bulk of servers where websites are hosted. Google, Amazon and Microsoft effectively are the internet’s gatekeepers. They could shut down competing sites simply by charging them exorbitant rates to exist. This makes it hard for startups to compete. A rival marketplace could spring up on Amazon Web Services and even if it becomes successful, it has to pay Amazon every time they want to expand. This seems like the most obvious area for regulation.
The public desire for tech regulation has ballooned since the 2016 election. Facebook’s omnipresence in the news after its constant mishandling of user data has led to a sea change. For the past decade, tech companies have been held in reverence in American society. They are seen as benevolent disruptors. They wear hoodies and work in bean bag chairs. Meanwhile these companies skate by on taxes and expose personal data. Google paid more money in fines to the European Union than it did in taxes last year. Amazon literally paid no taxes but was given billions in incentives to grace New York with its presence.
Facebook and Google must be reigned in through strict regulation. They control information seen by billions across the globe. In India, they call the internet “Facebook.” They cannot remain unchecked any longer and have proven that time and time again.
Warren will have no trouble getting people to support dismantling them. But Amazon and Apple may prove more difficult a case. People love Amazon. They deliver anything in two days' time, cheaper than most other marketplaces. Apple makes beautiful technology and actually does not share any user data with any third party.
Warren’s plan is only a campaign proposal and by no means set in stone. The details are scant but the ideas are necessary. Warren touts herself as a capitalist and these proposed regulations are crucial for the tech sector to flourish — not only for the CEOs but for the workers and consumers.