Elizabeth Warren wants to break up big tech, and the higher she rises in the polls, the more big tech seems to worry.
On Tuesday, The Verge published leaked audio of Facebook founder and CEO Mark Zuckerberg at a meeting with employees in July. At one point, referring to Warren, he says, “If she gets elected president, then I would bet that we will have a legal challenge, and I would bet that we will win the legal challenge. And does that still suck for us? Yeah. I mean, I don’t want to have a major lawsuit against our own government. … But look, at the end of the day, if someone’s going to try to threaten something that existential, you go to the mat and you fight.”
So Zuckerberg is concerned about the woman who has promised to break up his business winning the White House? This is about as surprising as finding out that Donald Trump sleeps in a tanning bed.
This story—which is making its way through the aggregation and hot-take tunnel as we speak, spreading from The Verge to the New York Times to CNN to Fox News to this very blog post—will only be good for Elizabeth Warren. She’s running as the candidate big business should fear, and Zuckerberg’s leaked audio reinforces that image.
She’s leaning into it. Immediately after this story broke, the candidate tweeted: “What would really ‘suck’ is if we don’t fix a corrupt system that lets giant companies like Facebook engage in illegal anticompetitive practices, stomp on consumer privacy rights, and repeatedly fumble their responsibility to protect our democracy.”
But what would breaking up big tech actually look like? In March, Warren laid out her plan, which, involves first “passing legislation that requires large tech platforms to be designated as ‘Platform Utilities’ and broken apart from any participant on that platform.” This would impact tech companies with annual revenue of $25 billion or more, and they would be prohibited from owning both the platform and the participants on that platform.
So, for instance, Amazon Marketplace, where third-party vendors sell their wares, would be declared a public utility and would be split apart from AmazonBasics, the company’s private label, which reproduces third-party products and sells them at a discounted price, in a blatant attempt to put those third-party vendors out of business. As Warren put it, “This can create a conflict of interest that undermines competition. Amazon crushes small companies by copying the goods they sell on the Amazon Marketplace and then selling its own branded version.”
Next, Warren writes, “my administration would appoint regulators committed to reversing illegal and anti-competitive tech mergers.” This wouldn’t mean breaking Facebook into a dozen smaller social networks (which would be unlikely to solve many problems and might create even more) but it would mean losing WhatsApp and Instagram—or, as Warren puts, it “unwinding mergers.” This, she says, will benefit the consumer as well as the media landscape.
“We must help America’s content creators—from local newspapers and national magazines to comedians and musicians—keep more of the value their content generates, rather than seeing it scooped up by companies like Google and Facebook,” Warren writes.
She’s got a point. At the same time that news content is more easily available than ever, the organizations that create that content are undergoing massive disruption as Google and Facebook scoop up an increasing share of ad revenue. And it’s not hard to see why advertisers are drawn to those platforms over traditional media. Facebook and Instagram and Google and Amazon have all of your data: They can serve ads individually tailored to your desires so that the moment you start thinking about buying a new pair of loafers or a zebra-print Kaboodle, an ad for one appears on your screen. They aren’t quite reading your mind, but they do know what you Google, and it’s hard for traditional media outlets to compete.
Even if companies may prefer advertising on these platforms, polls show that consumers do not like that their every movement and click is being tracked. Warren proposes to impose greater regulations on these industries, particularly on how our data is collected used. In other words, more transparency, less data collection.
Matt Stoller, a fellow at the Open Markets Institute and the author of Goliath: The Hundred Year War Between Monopoly Power and Democracy, says this would be a positive development for consumers and competitors, both of whom anti-trust law is designed to protect. Stoller would like to see platforms banned from advertising entirely, which would likely mean consumers paying for the privilege of using Facebook, Instagram, etc. That’s unlikely to happen any time soon (and is not in Warren’s pitch), but what is clear is that the conversation around regulating big tech has changed drastically in just the past few years.
“It was an open secret that Hillary Clinton was thinking of appointing [Facebook COO] Sheryl Sandberg to her cabinet,” Stoller says, “and now Elizabeth Warren is talking about breaking Facebook up.”
Will she be able to do it? Time will tell, but as Zuckerberg said in the leaked audio, we can expect the titans of technology to put up quite the fight.
