Sen. Warren’s bold plan to break up Amazon, Facebook and Google would unwind major acquisitions — and that’s just the beginning

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Sen. Elizabeth Warren. (Flickr Photo / Elizabeth Warren)

Elizabeth Warren is gunning for Big Tech.

On Friday, the U.S. senator from Massachusetts unveiled one of the most ambitious proposals to crack down on tech industry power as part of her 2020 presidential bid, proposing to break up Amazon, Facebook and Google.

“Today’s big tech companies have too much power — too much power over our economy, our society, and our democracy,” she writes. “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.”

She also threw shade on Microsoft’s search engine with this line: “Aren’t we all glad that now we have the option of using Google instead of being stuck with Bing?”

Although the plan would impact all of the tech industry’s biggest players, Amazon could be hit hardest. Warren wants to prevent tech companies from being participants on their own platforms as marketplaces — Amazon wouldn’t be allowed to sell its own products on, for example.

What’s more, the plan to would throw a wrench in Amazon’s grocery and brick-and-mortar ambitions by unwinding the acquisitions that allowed the Seattle e-commerce giant to move into those industries.

Warren’s plan: The proposal would rewrite the tech industry playbook by taking two major steps.

First, it would enact a law that turns big tech companies with global revenue of $25 billion or more into “Platform Utilities.” They would be forbidden from owning a platform utility — like a social network or e-commerce marketplace — and participating in it. Amazon, for example, would not be allowed to sell its own products on its marketplace. These platform utilities would be forbidden from sharing user data with third parties. Violators of these rules would be fined 5 percent of their annual revenue.

Second, existing tech mergers would be unwound by regulators under Warren’s administration. She specifically called out Amazon’s acquisition of Whole Foods and Zappos; Facebook-owned WhatsApp and Instagram; and Google’s Waze, Nest, and DoubleClick as “anti-competitive mergers” to be broken up.

Driving the proposal: Warren is concerned that big tech companies use their power to snap up competitors or drive them out of business. She also called out Amazon for wielding outsized influence over e-commerce and local governments.

Amazon owns its online marketplace and sells private label goods on it, a move Warren says “crushes small companies by copying the goods they sell on the Amazon Marketplace and then selling its own branded version.”

She later takes a swing at Amazon’s HQ2 sweepstakes: “Some of these companies have grown so powerful that they can bully cities and states into showering them with massive taxpayer handouts in exchange for doing business.”

Amazon did not immediately respond to questions about Warren’s plan.

Take note: Warren’s proposal, published as a blog post on Medium, starts with a discussion of another Seattle-area tech giant: Microsoft. In the 1990s, the federal government sued Microsoft, accusing the company of engaging in anti-competitive behavior by bundling its web browser with its operating system. Warren says this could be a model for anti-trust regulation of the tech industry going forward:

The federal government sued Microsoft for violating anti-monopoly laws and eventually reached a settlement. The government’s antitrust case against Microsoft helped clear a path for Internet companies like Google and Facebook to emerge. The story demonstrates why promoting competition is so important: it allows new, groundbreaking companies to grow and thrive — which pushes everyone in the marketplace to offer better products and services.

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