Solution Providers: Elizabeth Warren’s Call To Break Up Tech Giants Is ‘Overreaching’

Solution providers and a tech think tank denounced as unwarranted and overreaching the proposals of Democratic presidential candidate and U.S. Sen. Elizabeth Warren to break up technology giants Amazon.com, Facebook and Google, and appoint regulators to reverse their “illegal and anti-competitive” mergers.

Warren (D-Mass.) said the move would restore competition to a tech industry ruled by monopolies that hurt small businesses and hinder innovation.

Society’s understanding of proper use and good governance is always playing catch-up with technical innovation, according to Aric Bandy, president of Agosto, a Minneapolis-based cloud product development company and Google Cloud Premier partner.

“Warren's proposal to break up the big tech companies is an overreaching reaction based on a flawed concept that smaller is safer,” Bandy said. “Size doesn't matter. We need thoughtful policy and regulations that balance our bright and healthy tech sector while still providing appropriate protections as we've seen in other countries.”

Warren on Friday said, if elected, she would push for legislation designating tech platforms with more than $25 billion in annual revenue—including Amazon Marketplace, Google Ad Exchange and Google Search—as “platform utilities.” The legislation would prohibit them from owning any participants on that platform, so Amazon Marketplace and AmazonBasics would have to be split apart, as would Google Ad Exchange and any Google businesses on the Exchange. Google Search also would have to be spun off under Warren’s proposal.

The “platform utilities” also would be barred from sharing user data with third parties.

“Today’s big tech companies have too much power—too much power over our economy, our society and our democracy,” Warren said in a campaign post on the Medium online publishing site. “They’ve bulldozed competition, used our private information for profit and tilted the playing field against everyone else. And in the process, they have hurt small businesses and stifled innovation.”

Amazon.com, Facebook and Google did not respond to CRN inquiries for comment.

Warren also would urge federal regulators to use current antitrust laws to unwind “anti-competitive” mergers including Amazon’s purchase of Whole Foods Market and online retailer Zappos, Facebook’s purchase of the WhatsApp mobile application and Instagram photo- and video-sharing social network, and Google’s acquisition of the Waze navigation app, the Nest connected home products company and DoubleClick, an internet ad serving solution.

Warren’s campaign call is an example of “big is bad, small is beautiful” ideology “run amok,” according to Rob Atkinson, president of the Information Technology and Innovation Foundation, a nonprofit science and tech policy think tank in Washington, D.C.

Breaking up large tech companies would hurt consumers by “reducing convenience, reducing quality of service and innovation, and, in some cases, leading to the introduction of priced services,” Atkinson said in a statement.

“Consumers now benefit greatly from having one Amazon, one Google and one Facebook,” Atkinson said. “The goal of competition policy should be to enhance consumer welfare, not penalize companies for earning market share and operating at scale—yet that is exactly what the Warren proposal would do.”

Tech company-related privacy issues and political clout could be addressed with a national privacy framework and campaign finance reform, he said.

Warren’s announcement was nothing more than a politician “trying to say something bold and outlandish to gain publicity,” according to Sean Tario, CEO of Open Spectrum, a Raleigh, N.C.-based data center and cloud marketplace consulting firm.

“Making statements that Google, Facebook and Amazon should be ‘split up’ is no different than her saying CenturyLink, AT&T and Verizon should be split up or JPMorgan Chase, Goldman Sachs and Bank of America should be split up,” Tario told CRN. “Because large tech companies have been in the public eye over data privacy, they are easy targets, and this headline is even easier of a target for click bait.”

Another solution provider executive, who asked not to be named, found it perplexing that Warren would single out tech companies as a major campaign call given “all of the other problems we face as a country.”

“It just seems crazy to me that they would want to be so intrusive to companies that are innovating,” the partner said. “At some point I think Amazon should break [Amazon Web Services] from Amazon the retail company. But as far as government overreach into these large tech companies, I think it’s ridiculous.”