Perhaps as a means to separate herself from a crowded Democratic presidential field, Sen. Elizabeth Warren released a proposal to break up large tech companies.
Warren, who announced her new regulatory plan on Friday, has proposed splitting up large companies, such as Google, Facebook and Amazon, in order to promote competition.
Warren's proposal includes the creation of two tiers of companies that would be overseen by a new set of regulations. The plan also includes the appointment of regulators that would "unwind anti-competitive mergers," including Amazon's deals for Whole Foods and Zappos; Facebook's deals to buy WhatsApp and Instagram; and Google's acquisitions of Nest and DoubleClick.
"I want a government that makes sure everybody — even the biggest and most powerful companies in America — plays by the rules," Warren said in a statement. "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."
"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 added.
If elected president, Warren's administration would take a two-pronged approach to breaking up large tech companies. The first would include "passing legislation that requires large tech platforms to be designated as 'Platform Utilities' and broken apart from any participant on that platform."
Companies with an annual global revenue of $25 billion or more and that offer to the public an online marketplace, an exchange or a platform for connecting third parties would be designated as “platform utilities," according to Warren.
Under this approach, Amazon Marketplace and Basics would split, Google’s ad exchange and businesses on the exchange would have to split and Google Search would be spun off from Google.
The second phase of Warren's proposal would subject smaller companies to the same set of regulations, but wouldn't force them to separate themselves from the online marketplace, according to her online statement.
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Not surprisingly, Warren's proposal came under criticism not long after it was announced.
"Politicians and their technocrats hacking up big tech companies is bad news for consumers, innovation, stockholders, and private property rights," said Jessica Melugin, associate director, Center for Technology and Innovation, in a statement emailed to FierceTelecom. "There’s no need to run this doomed regulatory experiment in the U.S.; European-style meddling has left that continent without one tech company in the global top ten and, more generally, government control of industry is currently on full and tragic display in Venezuela."
“The next wave of technological innovations will likely require enormous economies of scale to serve consumers. In the meantime, there are no barriers to entry for the next killer app or sector-disrupting entrepreneur. The free market is working to lower prices, create new products, and leave consumers better off; politicians need to stay out of its way,” she added.
Warren made her announcement the same day she planned to hold a rally in Long Island City, which was the Queens neighborhood that was previously the location of Amazon's new campus before it pulled out.