Liz Warren: I'll smash up Amazon, Google, and Facebook – if you elect me to the White House
'They’ve bulldozed rivals, used our private info for profit' ... yes, yes, but could she actually tackle giants as prez?
Google is a different animal. It has already broken itself apart to some degree when it became Alphabet. But there is significant evidence that Google has used its own systems to beat out competition. There was a time when a startup could come up with a great system for, say, movie tickets and expect Google to buy them.
Now Google just assigns a team to develop the same product and kills the market the moment any competitor puts the service live, because it has the ability to put its products front and center. Likewise, reviews and Yelp.
Yelp is not the nicest company in the world, pressuring companies to pay it if they want bad reviews to go away for example, but it is a useful service. Google has methodically undermined its service by offering and promoting its own review service, somewhat aggressively in the case of Android phones.
And, of course, there is the financial powerhouse behind Google – the ability to sell ads above and alongside its search results. The company has a clear incentive to promote those companies that pay it more, and it has complete control over that process. Just ask the many millions of people who have paid Google to run ads and then been informed that their ad wasn't performing as well as Google wanted, so it has decided not to run your ads.
And then of course there is the fact that Google – and Facebook – have such complete dominance over what people on the internet see that they approach the rest of the world with the perspective of "what they can do for us," rather than chasing business. A clear indicator of a distorted market.
Google, for example, won't consider - even for a second - paying news outlets for using their content. It expects to be able to grab and use it for free while making money by running ads alongside. And when countries have implemented laws to force compensation, the tech giant – which makes over $100bn a year in revenue – simply shut down its service.
YouTube makes its money from running ads alongside other people's content. It decides how much the people that actually create the content get paid and it is unafraid of imposing its own policies at a second's notice – such as when, earlier this month, it unilaterally decided to remove all comments from millions of videos because of a problem it has with properly policing its systems. Some exceptions were made – which it decided.
The real problem
But by far in a way the most obvious target for anti-competitive behavior is Amazon, which has used its total dominance of the ecommerce market to distort just about every aspect of buying or selling online.
Nowhere is that clearer than in the fact that many, very large, companies sell their products on Amazon as well as through their own website. It's a situation that makes zero sense unless you assume that Amazon is abusing its dominant position, it is almost always cheaper to buy a product on Amazon than to purchase it from the company directly. And while that is great news for the consumer, it is clearly not a competitive market.
Again, though, does Warren's proposal to create "platform utilities" - with companies forced to run them fairly and equitably and forced to sell off any arms that work off that platform - make sense?
In one sense it does, but it is also not a traditional American approach. When Congress can't even decide that internet provision should be viewed as a utility, like telephone lines, then it seems very unlikely there will be general agreement that platforms built on top of the internet should be legally designated "platform utilities."
What would be a good move – and which plays to Warren's strengths and knowledge – would be to bolster and strengthen existing federal regulators to come down harder on companies that are anti-competitive.
Ah, yes, lobbyists
But that, of course, is where the biggest distortion in American life comes in: regulators are increasingly impacted by the lobbying power of large corporations, in large part because the political parties get to decide who heads up the regulators and who is in overall charge.
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The back-and-forth over net neutrality at the FCC, where the basic rules over internet provision have repeatedly changed depending on which party is in the majority is perhaps the clearest example of how partisan politics has infected every part of government.
The irony is that Warren's plan could only be implemented if Democrats took control of all the levers of power. And as a result, the moment one of those levers were lost, as would be inevitable, there would be a push to reverse the plan.
Something does need to be done about the overweening power that Big Tech currently possesses and while Warren's plan provides a nice, clean approach, the reality is that any real plan will be far messier and scrappier.
It will be interesting to see whether Warren's approach is supported or emulated by other Democratic presidential hopefuls. But if she were to be honest about it, Warren knows that this plan is a non-starter but it does play to her strengths and clearly she is trying to get make a connection with younger voters who will be far more engaged in digital markets than older voters and could prove vital to winning the Democratic candidacy.
Warren is heading to the South by Southwest festival in Austin, Texas this weekend whether festival goers will get to listen to Cool Aunty Liz tell them why they should vote for her. ®
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