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Senator Elizabeth Warren has garnered attention as one of the leading democratic presidential candidates with her campaign idea to break up tech giants such as Facebook, Amazon, and Google. She is proposing that since tech giants hold monopolies over the rising industry, they need to be dismantled. This can be seen as an initiative to have more governmental regulation on businesses, however is it really necessary? Are monopolies a good or bad thing?
The proposal was first stated in March and has recently came to light when a leaked audio came out of Zuckerberg announcing, “If she gets elected president, then I would bet that we will have a legal challenge, and I would bet that we will win the legal challenge." Elizabeth Warren responded to Zuckerberg's comments by stating "what would really “suck” is if we don’t fix a corrupt system that lets giant companies like Facebook engage in illegal anticompetitive practices, stomp on consumer privacy rights, and repeatedly fumble their responsibility to protect our democracy." Sick burn Mr. Zuckerberg.
But let's step back and look at that the FAANG (Facebook, Amazon, Apple, Netflix, and Google) have led a technological revolution that has created tens of thousands of jobs, helped grow the economy, has placed America as the leader of the internet revolution, and provided products and services that makes everyone's lives easier. But do these innovations come with a cost? The European Union has cited companies like Google for anticompetitive practices with fines in billions of dollars. So while Google and Facebook may be experiencing tremendous growth, there are dozens of their competitors which are losing market share, laying off workers, and experiencing falling profits due to the monopolies of a few.
Are big tech companies a boon to the consumer or will be harmful due to lack of choice, increase pricing and poor service? How would a company like Facebook be realistically broken up without breaking the company?
6 comments:
Tech giants such as Facebook and Google can realistically be broken up by breaking up their individual acquired counterparts. (Facebook’s Instagram and Whatsapp; Google’s Youtube and Doubleclick). This process will require lawsuits to be filed through the Supreme court just as Warren wishes to do. In the Boston University article you cited, Michael Salinger, an antitrust expert makes the argument against Warren, “These companies need to have violated laws in ways in which an appropriate remedy would be to break them up.” With evidence from Docket C-4365, made by the US Federal Trade commission, and from Epic.org (Electronic Privacy Information Center), it is evident that Facebook has in fact violated several laws regarding the consent of consumers. (Too many to list). The matter of breaking up companies is not far-fetched. AT&T for example was broken up in 1982 with the Bell Operating Companies, and Standard Oil was broken up by the Sherman AntiTrust Act. The danger, as Warren explains with keeping these huge monopolies in power is the idea that their databases are corrupt enough to dig deeper from basic necessities and interests to recording sensitive information from a consumer’s life to death. Amazon for example which acquired Whole Foods now has information on basic grocery needs and because Amazon has little to no competition, Whole Foods consumers inadvertently become slaves to a system just by the action of buying a major necessity like food.
https://www.ftc.gov/sites/default/files/documents/cases/2012/08/120810facebookdo.pdf
https://epic.org/privacy/ftc/facebook/#legal
https://www.ourdocuments.gov/doc.php?flash=false&doc=51
https://www.businessinsider.com/att-breakup-1982-directv-bell-system-2018-02
While inappropriate practices such as Amazon's mistreatment of their factory workers should not be tolerated, and there should be regulations in place to prevent that, I don't think breaking up major conglomerates will solve much. It is important to keep in mind that while these large corporations may appear invincible, they need to maintain favor within their consumers, since actions like collecting user's data or bankrupting competitors can deter consumers. This also opens up a new market for smaller companies who may not be able to compete with the prices of the larger companies, but can ensure that their practices follow public expectations, which could draw consumers despite higher prices. This puts long-term pressure on the major companies to change their practices to cater to the wants of their customers, even if it means cuts to monetary profits. I think a realistic goal is not to break up the conglomerates, but to get them to change their policies to be less profit-oriented and care more about consumer privacy and worker treatment, among other issues.
In my opinion, breaking up these large tech giants is pretty unnecessary if Warren's goal is to protect people's rights, as that would realistically just require an overhaul/updating of federal labor laws and creation of laws that require more business transparency. Tech giants that use consumer browsing info (Facebook, Google, etc.) most likely all have some mention of this use of private information hidden somewhere in their terms and conditions. However, since no one bothers to read these terms these tech giants are essentially able "sell access to you, or more specifically, access to your News Feed" as Vox article puts it. By forcing companies to be more transparent about what information a user can make totally private and what info is accessible to advertisers and the tech giant itself, this will allow privacy to be more protected without eliminating tech giants that, as Mirielle states, provide a multitude of jobs to Americans and drive innovation in the tech industry.
The idea that we shouldn't break up large tech conglomerates is rooted in conservative, capitalist thinking. Tech conglomerates have a huge hold over today's market and also a lot of the media people see. They are responsible for increasing dependence on their products and decreasing the boundaries that people have with media and data. It's true that other reforms are necessary, like increasing more business transparency. However, it's a question of priority and effectiveness. Transparency only goes so far; even if Facebook told you exactly what kinds of data they were selling, I really doubt people would stop using it in massive droves. Indeed, this strikes at the central problem - because people literally don't have any alternatives (hint: monopolies), and because technology and social media haven been engrained in our social lives and even business lives (hint: monopolies), transparency doesn't do squat for the larger problem. Breaking up monopolies in the tech sector is crucial. Yes, it's difficult, but like JFK said, we do them "not because they are easy, but because they are hard."
I think that something needs to be done about tech companies, such as Facebook and Amazon, violating consumers’ privacy and treating their workers poorly. But, I don’t think that this necessarily means breaking up big tech companies. As one of the articles mentioned, it may not even be legal to break up these companies as they aren’t breaking any monopolization laws if they provide a better product at a better price than other companies. These big tech companies essentially provide free services to consumers, with only the cost to consumers of agreeing to give these companies access to their data. Therefore, rather than breaking up these companies, I think that it is more important to put in place stronger privacy laws.
Although it is true that companies are stifling competition, breaking up these companies will generally have no impact on a consumer’s decision or privacy. As Warren said, ““if we don’t fix a corrupt system that lets giant companies like Facebook engage in illegal anticompetitive practices, stomp on consumer privacy rights, and repeatedly fumble their responsibility to protect our democracy.” By bringing in the idea of democracy, she contradicts herself when she fails to realize that tech companies are democratic believers themselves. If it companies do happen to be forced to break down or restricted from reaching their potential, it is unfair for tech companies. In the end, these tech companies should be able to earn the profit they wish for as long as they do so fairly, such as protecting the rights of both employees and customers. Moreover,The second article explains why breaking up tech companies can even be a legal issue, ““These companies need to have violated laws in ways in which an appropriate remedy would be to break them up. We can’t just do it because some politicians think it’d be a good idea.” Trying to break apart these companies will destruct societal advancements and global placement, thus making it impractical and even disadvantageous. Similar to what Sarah said, these successful companies should not be broken up as long as consumers know what are informed (in a positive way) of what they are getting into regarding privacy and safety.
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