Elizabeth Warren Proposes Breaking Up Tech Giants Like Amazon

By Astead W. Herndon

Image
Senator Elizabeth Warren’s plan creates two tiers of companies that would fall under the new regulations.CreditCreditElizabeth Frantz for The New York Times

Senator Elizabeth Warren, the Massachusetts Democrat who is bidding to be the policy pacesetter in the Democratic presidential primary, is set to announce another expansive idea on Friday: a regulatory plan aimed at breaking up some of America’s largest tech companies, including Amazon, Google and Facebook.

The proposal — which comes on the same day Ms. Warren will hold a rally in Long Island City, the Queens neighborhood that was to be home to a major new Amazon campus — calls for the appointment of regulators who would “unwind tech mergers that illegally undermine competition,” as well as legislation that would prohibit platforms from both offering a marketplace for commerce and participating in that marketplace.

Ms. Warren’s plan would also force the rollback of some acquisitions by technological 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.

[Sign up for our politics newsletter and join our conversation about the 2020 presidential race.]

“I want a government that makes sure everybody — even the biggest and most powerful companies in America — plays by the rules,” Ms. Warren said in a statement. “To do that, we need to stop this generation of big tech companies from throwing around their political power to shape the rules in their favor and throwing around their economic power to snuff out or buy up every potential competitor.”

“To restore the balance of power in our democracy, to promote competition, and to ensure that the next generation of technology innovation is as vibrant as the last, it’s time to break up our biggest tech companies,” she said.

The announcement is sure to reverberate from New York to Silicon Valley. Pressure for elected officials to place additional oversight on mega-tech companies has been building for months, particularly after revelations that companies such as Facebook may have violated customer privacy agreements. Ms. Warren is also sending a political warning shot across the Democratic primary field, where decisions on how much to embrace or reject Silicon Valley and its wealthy donors could become an important dividing line among candidates.

In the wide-open nomination race, Democrats such as Ms. Warren, Senator Bernie Sanders of Vermont and Senator Amy Klobuchar of Minnesota have expressed a willingness to limit the influence of companies such as Facebook, Google, Apple and Amazon — though Mr. Sanders and Ms. Klobuchar have yet to present clear policy details. Senator Kamala Harris, who represents many of those companies based in her home state of California, has repeatedly pressed executives on consumer privacy but has stayed away from direct calls to limit their influence. Senator Cory Booker of New Jersey has been more willing to embrace the controversial corporations, who have frequently used their vast resources to lobby politicians of both parties.

[Check out the Democratic field with our candidate tracker.]

Ms. Warren’s plan creates two tiers of companies that would fall under the new regulations: those that have an annual global revenue of $25 billion or more, and those with annual revenue of $90 million to $25 billion. The upper tier would be required to “structurally separate” their products from their marketplace. Smaller companies would be subject to regulations but would not be forced to separate themselves from the online marketplace.

In the announcement, Ms. Warren’s team included praise from several scholars on internet privacy and technology regulation, including Siva Vaidhyanathan from the University of Virginia and Frank Pasquale of the University of Maryland’s School of Law. For those closely watching the Democratic presidential nomination contest, the announcement was another example of Ms. Warren’s political strategy, which is to appeal to voters based on policy ideas and retail politics, not soaring oration or feel-good messages of unity.

In January, Faiz Shakir, then the national political director for the American Civil Liberties Union, said, “Elizabeth Warren is trying to position herself as the ideas candidate of the field, and thus far, in the early going, she’s winning that.”

“Others should start thinking about competing in the arena for new ideas,” Mr. Shakir added. He has since joined Mr. Sanders’s presidential bid as its campaign manager.