More Regulations To Tame The Tech Giants? Surely The Current Laws Are Enough, If They Are Applied
Democratic 2020 presidential candidate Elizabeth Warren has sparked controversy after announcing detailed plans to force tech giants such as Amazon, Facebook or Google to be broken up into their respective divisions and be prevented from acquiring or copying competitors who could threaten their model: should there be a size limit on successful companies to prevent them from reaching a position where they would be a threat to innovation?
There are a number of aspects to this issue: to begin with, in her article, Warren specifically targeted Amazon, Facebook and Google, but left Apple out despite being larger, which seemed to indicate she was not talking about size alone, but instead behavior and attitude. Later, in an interview, she clarified that Apple was also included in the deal and would be forced to break apart their App Store. But in the original article, she specifically cited cases in which Amazon, Google or Facebook had used various types of strategies expressly designed to harm competitors, attain dominance or limit competition: Microsoft and browsers, Amazon’s copying and marketing of successful products with private labels, Google’s decision to demote its rivals’ services in searches, and acquisitions such as Instagram or WhatsApp by Facebook, DoubleClick, Nest or Waze by Google, and Whole Foods or Zappos by Amazon.
According to Warren, all this has impacted negatively on the number of technology startups, on fewer young companies in the growth cycle, and to less of them taking part in early financing rounds. We could also add acquisitions such as Kaggle by Google, Github by Microsoft, or the many machine learning companies that several of these giants have been acquiring in an effort to control everything that moves in that nascent sector.
Warren proposes restoring competition in the technology sector by raising the level of regulation on companies with more than $25 billion turnover, preventing them from creating platforms of any kind that connect to third parties and participate in addition in them. In addition, it would revert all mergers and acquisitions already made that could be interpreted as anti-competitive, starting, logically, with the big three. It’s hard to take in the scope of such regulations, and it would certainly be a nightmare for tech companies to comply with. Furthermore, considering that the biggest competition for these players comes from a country, China, whose government is dedicated to supporting its technology companies and that has never imposed restrictions on their growth and expansion into new markets, the effect on the US technology industry could be negative.