It’s hard to believe that the woman who built her legal career on a lie about her scant native American ancestry is now seeking the Democratic presidential nomination for 2020 but there you have it. Elizabeth “Pocahantas” Warren (D-Mass.) has entered the fray with her next big power play to become the next Commander-in-Chief of the United States government.
Warren is stumping to bust up some high-profile tech companies, including Google, Facebook, Apple, and Amazon, for violating U.S. antitrust laws, putting their competitors out of business and tipping the economic playing field to their monopolistic advantage.
The U.S. Department of Justice, according to Warren, is responsible for taking action to break up these successful companies because they are too big and powerful in the free marketplace.
Visiting Long Island City, the neighborhood whose public outcry against a major new Amazon campus made the corporation move elsewhere, Warren proposed that regulators unwind certain mergers between technology companies. She also recommended laws that would prevent service provider platforms from the conflict of interest that exists when the same company establishes an online commercial marketplace and also sets up their own shop there.
Part of the reason Facebook and Amazon have thrived is because they offer free access to their online platforms. Users sign up with no financial obligation and most agree to hand over their right to data privacy. It is user data that is the commodity on these popular platforms: personal and business information shared freely by consumers may be sold by the service provider to third-party marketers for targeted advertising and to build contact lists.
Google invented the first really intelligent search engine program that produced meaningful and useful results. Today, other search engine providers can also return good search results but don’t have the promotional budget that international giant Google has earned by giving away its proprietary software tool.
Warren’s regulatory proposals “would also force the rollback of some acquisitions by tech giants, the campaign said, including Facebook’s deals for WhatsApp and Instagram, Amazon’s addition of Whole Foods, and Google’s purchase of Waze. Companies would be barred from transferring or sharing users’ data with third parties. Dual entities, such as Amazon Marketplace and AmazonBasics, would be split apart.”
Senators Bernie Sanders (Independent from Vermont) and Amy Klobuchar (D-Minn.) have publicly supported curtailing powerful and influential companies such as Facebook, Google, Apple, and Amazon, but have put forward no specific game plan on how to achieve this sweeping goal.
Warren’s plan calls for dividing corporations into two groups: 1) those with annual revenues between $90 million and $25 billion; and 2) those with annual revenues above $25 billion. Group 2 companies would have to “structurally separate” their marketplaces from their product sales. Group 1 companies would have to follow regulations but could market their own goods on their own commercial platforms.
Warren and others critical of recent revelations and events surrounding all of these tech giants are concerned by the financial clout huge corporations have to ensure their dominance. When lucrative cash incentives fail to persuade local governments to allow large-scale operations in their neighborhoods, bullying threats may follow.
Warren has been advocating limits on American profiteers across the board. On June 29, 2016, she gave a speech with the title “Reigniting Competition in the American Economy,” in which she said that:
- “Less competition means less consumer choice”
- “Big guys can lock out smaller guys and newer guys”
- “Small businesses can be wiped out – and our whole economy can suffer”
- “Concentrated markets create concentrated political power”
- Market “concentration has contributed to the decline of what was once a strong, robust middle class in this country”
In 2018, Warren introduced the Accountable Capitalism Act, which contends that, since the 1980s, corporations have “adopted the belief that their only legitimate and legal purpose was ‘maximizing shareholder value.'” To equalize shareholder power, corporations would be required to increase worker representation on their governing boards. In addition, this law would curb corporate incentives to pay out shareholder dividends rather than reinvest in businesses.
By 1997, according to the new bill, “the Business Roundtable declared that the ‘principal objective of a business enterprise is to generate economic returns to its owners.'”
Successful, large corporations typically don’t want new government rules that limit their profits and ability to conduct business as they see fit. The obstacle facing Warren and other would-be monopoly-busters that that most of the mega-companies are operating within the letter of the law rather than from the spirit of the law.
Calling on the Justice Department to rule on matters of corporate law may backfire since “justice” really means “fairness” rather than “legal.” This explains the motto engraved over the front doors of the U.S. Supreme Court building: “Equal Justice Under Law.”
Warren is a lawyer. Let’s see what she can do to bust up modern high tech trusts.