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SXSWarren: A day later, Elizabeth Warren defends her Big Tech breakup proposal

Massachusetts Sen. Elizabeth Warren at SXSW 2019.
Enlarge / Massachusetts Sen. Elizabeth Warren at SXSW 2019.
Nathan Mattise

AUSTIN, Texas—”So yesterday you made a pretty big announcement about tech. Then like the gangster you are, you flew down to a tech conference… “

Time Editor-at-Large Anand Giridharadas led with that at his South by Southwest conversation with Massachusetts Senator and 2020 Democratic presidential hopeful Elizabeth Warren. The politician didn’t miss a beat. Barely 24 hours after she made headlines by publicly proposing that the US should break up companies like Amazon, Google, and Facebook as part of a plan to regulate tech platforms as utilities, Warren took the opportunity to further emphasize her idea.

“Today, we have companies like Amazon: they have a platform. I buy a coffee maker and use it all the time, but Amazon also sucks out an incredible amount of info about every buyer and every seller. Then, Amazon makes the decision to have a competing coffee machine and drive out the business in that space,” she explained. “They have this incredible advantage from the information they get from their platform and the fact they can also manipulate the platform, putting themselves on page 1 and put the competitor on page 16 where no one ever goes… My view is break those things apart, and we’ll have a more robust market in America.”

Warren touched on many topics over the course of her hour-long conversation with Giridharadas, but her support of free markets and capitalism—in particular how those ideas need to be instituted fairly within industries like tech—came up again and again. The senator had multiple, varied analogies at the ready to help. If baseball is your language, Warren likened Big Tech’s current situation to the conflict of interest that might exist if one individual was, say, both umpire and team owner. If you prefer American history, she sees the power and influence of Google, Amazon, et al. as analogous to the railroads of the 1800s.

“The railroads of the Teddy Roosevelt era were the big monopoly of the 1800s—the railroads were where you had to be if you had a steel mill, wheat, or corn, you had to get your goods to the railroad,” Warren said. “What happened? Railroads figured out they could price differently depending on your desperation or whether they had a competitor in the field. They’d start their own steel company and then give discount rates to move that along and sell at a cheaper price, but they’d raise prices for competitors.

“In that sense, what’s new is old,” she continued. “When someone gets market dominance, they destroy competition. The world that gave them birth, to get the opportunity to go and grow and do something, [the company] has grown big enough to destroy everything around it.”

But for Warren, the urgent difference between baseball or railroads with today’s tech is that Amazon, Google, or Facebook don’t only have market domination—they also have more data than ever before on their consumers and their competition.

“There have been corporate spies forever, but the information now that you can get on people… man,” she said. “Why would a giant like Google buy a company like Nest? Maybe because it has a good business model, but maybe Nest has a bucket of information embedded about how you wake up, go to bed, whether someone is homesick, and 58 bazillion other things… We watch the business model: it’s not only selling coffee makers, but a company also has the info that a shopper paused over the coffee maker, stayed there, and that shopper—we know six other things about them. The consequence of that is we have to think about competitive markets, and that’s what my proposal is now—it’s about protecting competitive markets by breaking these giants up, but it’s also about urgency for new restrictions about data, data privacy, [and] data sales.”

Warren didn’t use any of her time at SXSW to detail the specifics of how, if eventually elected president, she’d go about achieving her competitive market goals. That information was part of her published proposal, however—the gist being that companies with annual revenue of $ 25 billion or more and that also offer to the public an online marketplace, an exchange, or a platform for connecting third parties would be designated as “platform utilities.” These entities wouldn’t be able to own the platform and operate a participant, so Amazon would need to sell-off Amazon Basic, for example. Warren’s plan would also involve things like unwinding anti-competitive mergers (think Facebook buying WhatsApp and Instagram) through the work of appointed regulators.

Giridharadas approached the validity of this whole idea by saying he sees the “win-win” as America’s current greatest falsity—in order for things to change, someone will have to lose or sacrifice something. For Warren’s plan to work, he thus posed, who stands to lose?

“The monopolists,” the senator relied. “The monopolists will make less monopoly money, boo hoo.”

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Tech – Ars Technica

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