Warren throws down gauntlet in tech fight

Sen. Elizabeth Warren’s (D-Mass.) proposal to break up the country’s largest tech companies has set the tone for the Democrats vying for their party’s 2020 presidential nomination.

The progressive senator staked her claim as a trustbuster with an ambitious plan to break up companies like Facebook, Google and Amazon. She argued that Big Tech’s market power has stifled competition and even democracy.

{mosads}“As these companies have grown larger and more powerful, they have used their resources and control over the way we use the Internet to squash small businesses and innovation, and substitute their own financial interests for the broader interests of the American people,” Warren wrote in a blog post last week, unveiling her plan.

Her plan involves appointing regulators who share her views on the industry and pushing legislation that would make it illegal for a large internet company to both own a platform or marketplace and also compete in it — which critics say gives tech giants an unfair advantage over startups and local businesses.

Warren’s plan is the most aggressive proposal yet from any candidate in a party that has increasingly pushed a tougher stance on Silicon Valley. Going after tech companies has quickly become a go-to issue for Democrats, whether they’re centrists or firebrand progressives.

On Monday, Warren clashed again with Facebook after the platform briefly took down three ads from her campaign that touted her push for breaking up tech giants.

“We removed the ads because they violated our policies against use of our corporate logo. In the interest of allowing robust debate, we are restoring the ads,” the company said in a statement to The Hill.

Facebook’s policies ban advertisers from using the word “Facebook” or the company’s logo, in any ads on the platform. The policy was intended to weed out advertisements that falsely promoted products using Facebook’s name.

Warren highlighted the controversy in a tweet.

“Curious why I think FB has too much power? Let’s start with their ability to shut down a debate over whether FB has too much power. Thanks for restoring my posts. But I want a social media marketplace that isn’t dominated by a single censor,” she wrote.

Warren’s proposals against big tech companies are the latest reminder that the party has moved on from the Obama-era days when it actively courted the tech industry and celebrated its ties with entrepreneurs and innovators.

“You go down the list [of candidates] and most of them have staked something out on this issue,” said Stacy Mitchell, the co-director of the Institute for Local Self-Reliance, a nonprofit that advocates for a tougher crackdown on Amazon and other internet platforms.

Mitchell added that its long overdue that policymakers discuss antitrust as a way to crack down on corporate giants.

“It’s very healthy for our country that we’re having this conversation,” she said. “It’s a huge shift and it’s really important that it’s come back in the discourse.”

But not everyone is so excited about tech companies becoming a top target in 2020.

The tech industry has pushed back on Warren’s proposal, painting it as fringe and potentially destructive for the economy.

{mosads}Carl Szabo, the general counsel for the trade association NetChoice that represents Google and Facebook, blasted Warren’s “hipster” views on antitrust.

“Breaking up tech companies would hurt — not help — America’s middle class,” Szabo said in a statement. “Sen. Warren’s proposal would increase prices for consumers, make search and maps less useful, and raise costs to small businesses that advertise online. This proposal is bad for all Americans.”

“The idea of breaking up some of our most successful American technology companies — who lead the world — and regulating them like public utilities would take us back to the stone age, hurt consumers, and stifle innovation,” Tom Donohue, the president and CEO of the U.S. Chamber of Commerce, the nation’s most powerful business lobby, said in a statement. “This is not a vision for the future, but an archaic idea that should be dumped in your computer trash can.”

A handful of other candidates declined to echo Warren’s proposal when asked about it over the weekend. But Democrats have almost universally taken up the idea that Big Tech needs to be dealt with either through regulations on the collection and sale of personal data or by antitrust enforcement.

Sen. Amy Klobuchar (Minn.), a presidential candidate and the top Democrat on the Senate Judiciary Committee’s antitrust subcommittee, recently introduced a bill that would make it easier for regulators to block mergers that lead to “harmful consolidation.” And over the weekend she floated a proposal to tax internet companies’ targeted advertising revenue.

Warren isn’t the only lawmaker to propose splitting up the biggest tech companies. Last week, Rep. David Cicilline (D-R.I.), who chairs a House subcommittee on antitrust, proposed a potential Glass-Steagall-like bill for the tech industry in an interview with the Financial Times. The 1933 law, later repealed during the Clinton administration, prohibited financial firms from owning both commercial and investment banks. For online platforms, such a law could force them to separate divisions that sell products or data.

Warren’s bill also comes as some regulators are ramping up oversight of the tech industry. President Trump has previously raised questions about whether industry players are running afoul of the nation’s antitrust laws.

The Federal Trade Commission (FTC) recently announced a new task force dedicated to scrutinizing tech giants’ market power. The agency said that task force could potentially look at unwinding past mergers in the industry.

But Sam McGowan, an analyst with Beacon Policy Advisors, argues that the FTC would face enormous obstacles in trying to take on the Silicon Valley titans, and he believes the agency “recognizes it’s a little bit like David and Goliath.”

McGowan also believes that even if Warren wins the White House in 2020, her plan could easily be stymied by Congress. But he said Silicon Valley should be concerned about how the industry has become a frequent target of Democratic candidates like Warren.

“I think it’s a little bit like ‘Medicare for all,’ ” he said of the progressive health care reform blueprint.

“Some of the more extreme proposals aren’t going to get adopted,” he continued. “But some version of Warren’s plan is eventually going to go into effect if a Democrat wins.

“It’s clearly a threat to the tech industry, and they understand that very well.”