Last Friday, Democratic Senator and candidate for the 2020 presidential election Elizabeth Warren said that, if elected, she would look to break up a handful of the giant corporations that control the tech sector. The argument was perhaps one of the more economically progressive stances taken by the senator who, though a former Republican, is one of the more left-leaning Democrats in the crowded presidential race.
Insofar as Warren is looking to target the biggest, most consolidated corporations in the country, she’s picked the right industry. Even compared to massive media companies like Comcast, Time Warner, and Disney, the tech giants exist in a league of their own.
“Today’s big tech companies have too much power — too much power over our economy, our society, and our democracy,” Warren wrote in a blog post describing her proposal. “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 competition.”
Warren singled out Amazon, Google, and Facebook as the worst offenders and the initial targets of her effort. The industry, she argues, is losing competition, as venture capitalists shy away from funding startups that could easily be crushed by the predatory practices of consolidated corporate leaders like these. She points particularly to oversized mergers and the manipulation of proprietary marketplaces, such as those offered by Google and Amazon, as the source of so much strain.
Warren’s immediate solution is twofold: first, break apart recent legally dubious mergers and acquisitions like Amazon and Whole Foods, and Facebook and WhatsApp; second, prevent tech giants from competing on the platforms they own by separating companies like Google from arms like Google ad exchange. The goal here, says Warren, is to limit power and renew competition in the sector.
The tech sector has come under heavy scrutiny in recent years for a variety of issues, some directly related to its size, and some not. Amazon has come to be seen as a monolithic destroyer of small businesses as it integrates more and more industries into its massive corporate portfolio. Facebook has been the subject of a number of hearings on Capitol Hill, ever since the company failed to prevent Russian hackers from interfering in the 2016 election and was accused of a number of privacy violations. Google, too, has been accused of stifling competition using search manipulations and other unsavory means uniquely at its disposal. Most recently, it has come under fire for its leaked plan to develop a search engine suitable for Chinese censorship laws and surveillance practices.
Despite Warren’s aggressive stance, investors in the three tech giants were unmoved at this early stage of the 2020 Democratic primaries. Neither Facebook, Amazon, or Google commented on the story. As the race heats up, however, the significance of Warren’s plan (not to mention her campaign at large) will become increasingly clear.
While the targets of Warren’s ire remained silent, her plan was unsurprisingly attacked by other industry representatives. “Sen. Warren is wrong in her assertion that tech companies lack competition,” said Carlos Szabo, vice president of the trade group NetChoice that represents both Facebook and Google. “Never before have consumers had access to more goods, services, and opportunities online.” While it’s true, in a sense, that consumers have an unprecedented amount of “access,” that alone fails to speak to the anti-competitiveness at the center of Warren’s argument.
The announcement of her proposal came on the same day that Warren held a rally in Long Island City, Queens, the would-be location of Amazon’s scrapped HQ2 plan. When asked whether Democratic Governor Andrew Cuomo was justified in having offered the company billions of dollars in subsidies, Warren said, “That’s not the point. Before you even get to the question of do you need to change the statutes, there are structural changes you can make in the economy to prevent Amazon from dancing its way across America saying, ‘What will you offer me if I came?’”
Other Democratic candidates in the 2020 race have taken a tough-looking posture against tech giants, but have shied away from addressing the issue at the heart of Warren’s critique: their size. A chorus of Democrats have condemned the likes of Facebook for privacy violations — a popular topic ever since the Cambridge Analytica scandal — but most have not suggested that they disapprove of the monopolistic control enjoyed by these companies. An obvious reason for this reluctance is the sheer amount of money spent by major tech companies on politics: in 2018, Google alone spent over 20 million dollars on political lobbying. Some of the more centrist candidates like Senator Cory Booker of New Jersey have even spent time publicly courting the industry, and count its executives as political allies and old friends.
Perhaps the only other candidate that poses a similar, and perhaps more serious, threat to the major tech companies is Vermont senator Bernie Sanders, whose 2016 campaign helped to pull the party, kicking and screaming, slightly further to the left. Thanks largely to Sanders’ persistent rallying against Amazon and its CEO Jeff Bezos, the company raised its national base salary to 15 dollars an hour.
Tech industry executives and other representatives, daunted by the burgeoning opposition among Democrats, say that the political relationship between the party and the industry is coming to an end. “Not only is the honeymoon over, but they’re in divorce court,” said Rob Atkinson, president of the Information Technology and Innovation Foundation. Of Warren’s proposal, Atkinson said that he did not think it would be “out of the mainstream” for the 2020 Democratic pool of candidates.
Whatever does happen in 2020, it seems likely that the issue of monopolistic control will make its way into the discussion as it has not done for a long time — at least insofar as it involves the tech titans. If so, it will join other more progressive subjects like the fight for Medicare for All and free tuition at public colleges, subjects that in 2016 were derided by Democrats as being too radical and unrealistic to be taken seriously in discussion on the national stage.