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Home / Business / Elizabeth Warren will also break up Apple

Elizabeth Warren will also break up Apple

Senator Elizabeth Warren suggested breaking up Amazon, Google and Facebook yesterday in a post published on Medium. Her plan, which comes as the Democratic President's primary competition continues to warm up, would classify any company that runs a marketplace and make more than $ 25 billion a year into revenue as a "platform tool" and ban these companies from using these platforms from sell their own products.

Under the Warren plan, Amazon would not be able to sell Amazon Basics products on the Amazon store, and Google would not be able to market its own products in Google Search, and Facebook had to split from Instagram and Whatsapp. 1

9659003] But Warren's proposal did not mention Apple, which clearly matches the same set of criteria: The company produces far more than $ 25 billion a year and operates the iOS App Store, where it distributes its own apps. 19659004] I talked to Senator Warren after discovering on stage at SXSW in Austin, Texas today, and she explicitly told me she believes Apple should be broken apart – especially that it shouldn't run the App Store and distribute apps in it. "It must be one or the other," she said. "Either they run the platform or they play in the store. They will not do both at the same time. "

Warren's plan to break up the world's largest technology companies is by far the boldest general technical regulation proposed so far in the 2020 President's cycle, and it is going to be a fierce debate on antitrust policies among both Democrats and Republicans. all the press for stronger antitrust management has so far actually come from conservatives.

Below was my interview with Warren easily edited for clarity.

So you announced a pretty bold political proposal yesterday to break up three of the biggest companies You listed Amazon, Google and Facebook, and you said you would destroy them because they make over $ 25 billion a year in global revenue, and they run markets where they also participate.


It was a company that fits the description you didn't mention.

Apple. They're inside.

You'll also break up Apple.


You were very specific in how you would break up Google and the rest. How would you destroy Apple?

Apple, you must destroy it from the App Store. It must be one or the other. Either they run the platform or they play in the store. They will not do both at the same time. So that's the same idea.

To pull it apart, the App Store is the method by which Apple keeps the iPhone safe. It is integrated into the platform. How would you suggest that Apple and Google distribute apps if they don't run the store?

Well, do they compete with others who develop the products? That's the problem all the way through this, and that's what you have to keep looking for.

If you run a platform where others are going to sell, you will not sell your own items on the platform because you have two comparative advantages. One, you have sucked up information about each buyer and each seller before making a decision about what to sell. And secondly, you have the capacity – because you run the platform – to prefer your product over others' products. It gives a huge comparative advantage to the platform.

This would not be the first time in American history that this type of event had to be broken up. When the railways were dominant and you had to get steel or wheat on the railroad, there was a time when the railways found that they could make money, not just by selling tickets on the railroad, but also by buying the steel company and then cutting the price on to transport steel to own company and increase the price of steel transport to all competitors. And that's how the giant grows.

The problem is that there is no competition. It only uses market dominance, not because they had a better product or because they were somehow more user-friendly or better. It only uses market dominance. So my principle is exactly the same: What was used on railway companies over a hundred years ago, we must look at the technical platforms in the same way.

Why not mention Apple in your letter yesterday?

No special reason.

The comparison with rail is very interesting because it was a very popular comparison during the net neutrality struggle. The ISP runs the pipes, and you don't want them to interfere with what's happening to them. Do you also want to break up NBCUniversal and Comcast?

Yes. In fact, I'm already on record. In fact, I have already weighed in on it. I have sent letters, asked for hearings. I think I have questioned the record in hearings. I'm already there. I'm clearly on record on it.

Of course, the DOJ only lost with AT & T / Time Warner – you don't look very happy about it. How would you relax it?

There are two different questions. How good do I think the Ministry of Justice and the FTC do? Not good at all, and not good for a long time now.

But the other half – how do you break these things apart? Again, back in the days when we enforced antitrust laws, we did it for a long time. You peel off the two parts. The simple, obvious, is something like Amazon. It is not very difficult to see. You just say, okay, it's an Amazon running the platform, running the store, and people getting stock in it, and then all the small businesses, you get stock in them, and they're now separated.

Then the platform has no reason to prefer what had been an Amazon-based salesperson or pet cushion seller or whatever it seems to be, and we have a robust marketplace with people competing again. [The platform] would also have no interest in moving [search results] up side one instead of page six. The algorithm, at least in theory, goes back to being a neutral algorithm.

So with railways and ISPs, it's a natural monopoly element – it's hard to build a railway, it's hard to add fiber. Is it an equivalent natural monopoly that you see with the giant platforms that lead to a regulatory move?

You know, the natural monopoly argument is actually … not everyone accepts it. And there is something back and forth about whether or not it is the phenomenon we have to deal with here. My opinion is: I don't care. [laughs] I'm sorry. What I care about is that I can see the benefits the platform gets, and because of that, I say "Stop. You can't use the information, the data you can collect." Because you literally play this game a million times, right? It will be no competition.

There should be only six companies.

That's right, there shouldn't be just six companies.

At $ 25 billion [in annual revenue to trigger a breakup] you don't expect the local supermarket to stop having to make house brands.

Exactly. And no one is looking for it. You get into the shade, it's actually a two-level regulation. The one who has captured all the headlines is that for anyone over $ 25 billion, you have to break off the platform for many affiliates or affiliates.

But between 90 million and 25 billion [in annual global revenue] is the answer to say whether you are running a platform, You have a commitment to neutrality so you cannot participate in discriminatory rates. Obviously, it's like the neutrality rule: You can't speed up some people and lower other people, which is another way to price. So there is a commitment to neutrality.

The advantage of breaking them up at the top [tier] instead of just saying, "Gosh, girl, why didn't you just commit to neutrality all the way through?" Is that it actually makes regulation much easier. When you only have a line guide, you do not need the controllers. At that time, the market will discipline itself. If Amazon has the platform no financial interest in any of the formerly known-as-Amazon companies, you're done. It takes care of itself.

You don't think Jeff Bezos is going to manage $ 24.99 billion a year in revenue?

If he did, he would have a neutrality commitment and he would get regulators to crawl everyone over him. He can decide that he would rather be $ 25 billion and split everything.

You know that everyone should remember that when they split Standard Oil into all components such as the Standard of Ohio and the Standard of New Jersey and the Standard of California and so on, they actually ended up with a bigger profit for all who have been shareholders and leaders because they broken apart [companies] let people come in and shop more. And there was more competition. They did not get the monopoly gain – that was the drawback – but some of them became much more competitive. And that's a good thing. If these spin-off Amazon companies are really damn good, you got it, baby.

It's all about this. What I am protesting about is when they make a profit because they suck out secret information about the specialty that no one else gets, or they get top spot when it comes to a search.

Did you & # 39; re articulating a line of light. Many conversations I have had with antitrust people such as Tim Wus and Lina Khan in the world, they say we must change the standard . We must move from the antitrust standard for consumer protection to a European competition standard. Are you advocating that we change the antitrust standard?

I just think it's much harder to enforce it against a giant who has great political power.

So you go to leave the consumer welfare standard alone?

Look, will I love having [that changed] too? Sure. I have no problem with that.

My problem is in the other direction: There are times when it is difficult, light rules are easiest to enforce, and therefore you are sure you get the result you want.

Let me give you an example: I have long argued for the restoration of [the] Glass-Steagall [Act]. And my argument is basically not to tell me that the Fed and Currency Exchange Officer can crawl through Citibank and JPMorgan Chase and find out if they are taking too much risk and whether they have integrated and cross-subsidized businesses. Just take care of the boring bank part – check accounts, savings accounts, whatever you and I want to call commercial bank – from the investment bank, where you go and take a high flyer on this stock or business.

When you break the two apart, you actually need fewer regulators and less intrusions on the business.

You also get more assurance that it really happened. We live in an America where there is not only the economic power we need to worry about from the Amazon and Facebook and Google and Apple of the World – we must also worry about their political power. There is a reason that the Ministry of Justice and the Federal Trade Commission are not more aggressive. It was some time since they were more aggressive, a golden age of antitrust enforcement.

These large corporations exert tremendous influence in the economy and in Washington, DC. We crush them apart, which support the influence a little, and it certainly makes sure that they are not engaged in these unfair practices that stomp out every small business trying to get a start, every start-up trying to get in there.

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