Elizabeth Warren speaking at SXSW

Democrats double down on proposed regulations for tech giants

Image credit: REUTERS/Sergio Flores

Elizabeth Warren – in the running to be the Democratic candidate for US President in 2020 – has doubled down on her proposals to break apart the largest tech companies in the US.

Warren is a frontrunner in the crowded race to select a Democratic presidential candidate to take on incumbent President Donald Trump in 2020. The Massachusetts Senator is a former academic specialising in bankruptcy law. Since entering politics, she has made consumer protection a priority.

Last week, Warren announced that, if elected President, she would break up the largest tech companies based in the US.

“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,” said Warren, in a statement. “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.”

She argued that tech companies had used mergers to become monopolies at the price of a “dramatic reduction in competition and innovation in the tech sector”.

Her plan would involve designating platforms worth more than $25bn (£19bn) as “platform utilities” which would be prevented from simultaneously owning both the platform and competitors on that platform. Smaller companies would not face the same requirements. She mentioned Amazon, Facebook and Google as companies which would be affected by her proposals. She later confirmed to The Verge that Apple would also be subject to her antitrust policies and would likely be prevented from selling its own apps on the App Store.

Warren proposed the establishment of a regulator with the power to undo inappropriate tech mergers. This regulator would reverse Facebook’s acquisitions of WhatsApp and Instagram, Google’s acquisition of Nest and Waze and Amazon’s acquisition of Whole Foods. It would also prevent Amazon from selling Amazon products on its online marketplace and Google from promoting its own products in Search.

Speaking at a rally in Long Island City, New York – where Amazon’s plans to build a major new headquarters (HQ2) in exchange for a $3bn (£2.3bn) “incentives package” were ultimately rejected by the city after strong local opposition – Warren detailed her plans and compared Amazon’s practices with those featured in dystopian young adult series The Hunger Games, in which a wealthy urban elite forces workers to make extreme sacrifices for their own amusement.

She later doubled down on her proposals while speaking on CBS’ ‘Face the Nation’ broadcast from the South by Southwest (SXSW) festival in Austin, Texas, arguing that breaking up these tech companies did not damage her capitalist credentials: “I believe in markets: markets that work. Markets that have a cop on the beat and have real rules and everybody follows them.”

She called for a “level playing field” to allow for markets to function properly and to ensure “the people who come up with great ideas, who work hard, are the ones who will prosper, not simply those who were born into wealth”. When panel chair Anand Giridharadas noted that the owners of these companies would reap less profit under her proposals, Warren sarcastically commented: “Boo, hoo”.

Warren’s announcement lays out the most detailed plans for tech regulation so far by a Democratic presidential candidate, although Senator Amy Klobuchar – a Democratic contender with longer odds – commented at SXSW that she would investigate if breaking up these tech giants was the right solution and proposed that profit made from collecting users' data should be heavily taxed.

Alexandria Ocasio-Cortez speaking at SXSW

Reuters/Sergio Flores

Image credit: REUTERS/Sergio Flores

Also speaking at SXSW, new Democratic Representative Alexandria Ocasio-Cortez spoke favourably about a shift towards automation in the US, endorsing Bill Gates’ proposal of a 90 per cent corporate robot tax which could be used to retrain workers for new jobs. “We should be excited about automation, because what it could potentially mean is more time educating ourselves, more time creating art, more time investing in and investigating the sciences, more time focused on invention, more time going to space, more time enjoying the world that we live in,” she said.

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