The senator’s threat sent shock waves through Silicon Valley, where for years, tech companies enjoyed close ties to national Democrats who wanted to burnish their digital credentials and benefit from tech executives’ deep pockets. The result long had been lax regulation of the industry — something Warren’s proposal would end.
Tech experts said they fear other Democratic presidential hopefuls soon would follow her lead.
“I don’t believe this will be an out-of-the-mainstream proposal in 2020,” said Rob Atkinson, the president of the Information Technology and Innovation Foundation, a think tank whose board of directors includes representatives from Apple, Microsoft, Google and other tech companies.
Calling Warren’s plan “appalling,” Atkinson said of the tech industry’s ties to Democrats: “Not only is the honeymoon over, but they’re in divorce court.”
Amazon, Facebook and Google did not respond to requests for comment.
Warren’s proposal illustrates the tech industry’s political fall from grace as policymakers grapple with the ills posed by Silicon Valley — from job losses threatened by the rise of automation to the spread of malicious falsehoods online. In recent years, members of Congress have grown frustrated with the privacy mishaps at Facebook, which is now facing the prospect of a multibillion-dollar fine for mishandling its users’ data. And the concern is bipartisan: A key federal watchdog agency in the Trump administration just this month commissioned a new task force to study if big tech had become too big.
Nearly a decade ago, then-candidate Barack Obama famously appeared at Google headquarters during the early days of his 2008 campaign, hoping to tout his tech savviness particularly with younger voters. Now, though, the party’s White House aspirants in 2020 have become some of the Valley’s fiercest critics in pursuit of a different political edge. Sen. Amy Klobuchar (D-Minn.), for example, broadly has decried the “major monopoly problem” in the United States — particularly with big tech. Sen. Bernie Sanders (I-Vt.), meanwhile, has tangled specifically with Amazon over its treatment of workers.
Spokesmen for Klobuchar and Sanders did not respond to requests for comment.
Democratic Sen. Cory Booker, who has bachelor’s and master’s degrees from Stanford University, last year raised concerns about corporate consolidation across industries, including tech. But Booker, a regular patron of the Bay Area, has long raised considerable money from the tech industry. His office declined to comment.
Warren’s new pledge, which was published on the Medium website, has two key elements. First, the Democratic lawmaker said her administration would appoint “regulators committed to reversing illegal and anti-competitive tech mergers,” including Amazon’s purchase of Whole Foods, Facebook’s tie-up with WhatsApp and Instagram and Google’s ownership of Waze, Nest and DoubleClick.
Second, Warren said she would push legislation that would label key services — such as Amazon’s marketplace for goods — as “platform utilities,” which would have to be spun off from those tech giants’ other businesses. In effect, it could theoretically stop the e-commerce giant from making, selling and promoting clothes, toys or other goods alongside those same offerings from competitors on its website, a ban that’s meant to embolden Amazon’s rivals.
Warren unveiled her blueprint before she spoke to supporters in Long Island City, New York, where Amazon initially sought to construct one of two new headquarters. The company ultimately withdrew from the city amid staunch local opposition and fierce criticism from national figures, including Warren, who said Amazon had received “taxpayer bribes” from New York. She has not yet introduced her proposal as a bill in Congress, where it would likely face heavy opposition.
“We must ensure that today’s tech giants do not crowd out potential competitors, smother the next generation of great tech companies, and wield so much power that they can undermine our democracy,” she wrote in her post.
Recognizing the stakes, the tech industry’s advocates in Washington quickly blasted Warren’s proposal. The Computer and Communications Industry Association, a trade group that represents Amazon, Facebook and Google, said it was an “unwarranted and extreme proposal, which focuses on a highly admired and highly performing sector.” In a statement, Ed Black, the president of the group, added that it “is misaligned with progressive values, many of which are shared within the tech industry.”
Supporters, meanwhile, said Warren’s antitrust pledge drew inspiration from history. In 1933, Congress passed the Glass-Steagall Act, a law that forced banks to separate commercial and investment activities. Even today, banks are not permitted to control shopping chains, said Tim Wu, a Columbia University law professor and a critic of large tech firms, though Glass-Steagall was essentially repealed during the Bill Clinton presidency.
Wu and others also said AT&T offers a historical model for the kind of breakup Warren is proposing for the tech industry. In the 1980s, the U.S. government moved to split apart AT&T’s telecom monopoly, severing its long-distance service from what became seven regional “Baby Bells.” Before the breakup, AT&T controlled virtually every aspect of a consumer’s telephone experience, from owning the handset in Americans’ homes to operating the switches that connected their calls.
Warren’s proposal also draws inspiration more recently from a forthcoming law article written by Lina Khan, an advocate of more aggressive antitrust enforcement, according to several people familiar with Warren’s plan who requested anonymity to speak openly about her efforts. Khan helped renew an academic debate about large tech companies with an essay on Amazon in the Yale Law Journal in 2017.
To that end, the senator’s proposal foretells a looming struggle among Democrats over how far to distance themselves from an industry they once considered an ally, according to Hal Singer, an economist at George Washington University’s Institute of Public Policy.
“This is going to be a fight for the soul of the Democratic party,” he said.