I would take Warren more seriously if she started out by talking about ATT/VZN/Comcast. The "big tech" companies have the potential to harm consumers, but telcos have been harming consumers for decades.
By harming do you mean on price? Big tech has the potential to harm through externalities (privacy, control of the media, etc.). A sufficiently free market - with appropriate safeguards to ensure competition and prevent regulatory capture - tends to deal with price just fine, but not with externalities.
Warren's argument here is a straightforward free market one: free markets only work when there's a free flow of information. If Amazon both runs the market and participates in it, it's an inherently unfair playing field. Her argument is not that we should break up companies that we don't like or even those that hurt consumers; her argument is we should break up companies whose intact existence threatens the fundamental nature of free markets.
As a foreigner, I'm amazed by how little weight Americans seem to put on international competitiveness. I mean, I guess I should be gleeful that you have presidential candidates that want to blow up the only companies that give you a competitive edge. But really, isn't Warren at all concerned that the ones to pick up the pieces after her plan is implemented are very unlikely to be American?
I wonder how "American" a multinational company really is, or what it even means for a company to be "located" in a particular country. A company probably puts its headquarters in the location where its executives want to live, where they think that they might be able to hire people readily, or something along those lines. Those things wouldn't be dramatically changed by breaking up the big tech companies. Where they pay taxes, if any, is already independent of where they are "located."
I mean...how is having one or two massive oligopolists (sp?) good for the US' international competitiveness? That seems to be something you just assumed would be true as given, which is odd. Yes, there will be less economies of scale, but on the other hand there will be more competition and innovation. The least innovative companies out there are major market makers who don't have to improve to grab that sweet sweet dollar. Like, is the US more internationally competitive because your internet provider is massive and charges you ever increasing prices for ever decreasing service? Clearly there are trade offs.
It seems like this sort of thinking would lead to a "race to the bottom" where every country gives maximum leniency to its biggest companies. I'm not sure that's good for anyone.
This feels like an masterfully written propaganda statement to me, made to sneak in a lot of hidden / unjustified assumptions and stir up feelings.
- As a foreigner, I'm amazed by how little weight Americans seem to put on international competitiveness will certainly rile up a lot of readers. Those who don't like the plan and thus disagree with it being equated as "American" just like that who don't think it will ruin everything.
- The second sentence overtly states "US competitiveness == Big companies (and nothing else)" while painting the politicians as intensionally harmful
- The last one again presupposes the plan to fail, and now also for it to necessarily crush the "post-breakup pieces".
- There also seems to be a general sentiment that non-american must be bad for America.
And this are just the ones I spotted. The post doesn't justify any of those. In a verbal conversation, this would certainly harmful to the exchange of ideas and likely be used by people wanting to further their agenda by driving the other side into defending positions (if lucky with those facts included). I hope the effects in text are not as bad.
>I'm amazed by how little weight Americans seem to put on international competitiveness
Embarrassment of riches. There's an attitude in America that being in the lead is just the default state because America has been a leader in tech for decades now. Meanwhile most international multinationals are jealously guarded and protected by their respective national governments and are seen by the respective populations as their national pride (e.g. VW in Germany)
A good example is the vilification of the Silicon Valley tech scene by local governments (looking at you San Francisco) while every other nation is desperately trying to recreate it within their own borders - because who doesn't want thousands of high-paying / high-tech jobs in their region? Or how Amazon had their new HQ driven out of New York by local activists and local 'progressive' politicians.
We're just a few steps away from a dystopian future ruled by mega-corporations. Regardless of how competitive it might be, I don't want to end up there under any circumstance.
>> But really, isn't Warren at all concerned that the ones to pick up the pieces after her plan is implemented are very unlikely to be American?
Well Trump or whoever is the president then can instate a national security emergency and kick out that foreign company. I know this sounds like a broken record but it looks like this is how trade works now.
I don't see any obvious foreign competitors that would be likely to take over in the US and Europe.
As a very crude and not entirely accurate rule of thumb, large US corporations operate with a monopolistic mindset which is inherently developed-Western-going-on-global.
Competitive countries operate with a more explicitly nationalistic mindset which makes it harder for them to operate in the same market spaces in the same way. (Not impossible - just harder.)
And the language barrier will always be a problem.
So no - I don't expect non-US corporations to take over.
I think Warren is fantastic but I feel like her argument for Amazon is flawed and I'm curious to hear counter arguments.
In her example of Amazon being a platform and information aggregator, wouldn't a brick & mortar grocery chain like Safeway/Vons/CVS be guilty of the same anti-competitive practices when they sell "Safeway Brand Fruity Os" next to Kellogg Fruit Loops?
Businesses seem to have been able to be platforms and information aggregators for a very long time and we've had plenty of innovation and competition
IMHO, your analogy is exactly correct and if Safeway was as big as Amazon, Warren would be calling for them to be broken up too.
On the other hand, maybe the analogy isn't good because safeway displays products side by side while Amazon can more easily promote their own products. Level on a shelf has much less effect than a product being out of sight at the bottom of a webpage or even the second page of search results.
Grocery store margins are razor thin though, they compete with each other a lot.
IMO there's a difference of scale - Amazon has quasi-monopoly power in the "buying things online" space, so much so that e.g. Anker, which makes cables and chargers and competes directly with Amazon Basics, has no distribution channel other than Amazon.
If I make Unprovable Loops ("Part of this Turing-complete breakfast") and I'm not satisfied with the distribution deal I get from Safeway, I can always call up Von's or CVS or Target or Whole Foods or Walmart and see what they'll do, and in most cities there are multiple such options.
I do wonder if the problem here is inherent to being an online store. If there's a Safeway in one part of town, a new Walmart in another part of town will sell roughly as much cereal as a second Safeway. But if Amazon.com exists and is generally useful, why would people go to another site? So perhaps some of the traditional/historical safeguards against any one store becoming a monopoly on the market no longer apply.
Do nerds remember back in the day when many were calling out for Microsoft to be broken up? Into two parts: OS division, and Apps division.
The idea was that time and again Microsoft's OS division would anti-competitvely design internal APIs in DOS and Windows that its App division would leverage. There were also instances where Microsoft subtley broke DOS (and maybe even Windows, but definitely DOS) for competing applications. People used to talk about "undocumented" API calls.
In the end Microsoft's OS gained proper competition through the paradigm shift of FOSS, specifically with Linux. Microsoft helped a key competitor (Apple) off its knees and look where we are now – Apple has a mobile OS, Microsoft has none. Microsoft didn't board the internet/web train quick enough, didn't forsee how big search and social media would become (in fairness, a vanishingly small number of people did) and so now they have Google and Facebook to compete with. Amazon parlaying their experience from a building an at-scale marketplace to a cloud-computing platform took everyone by surprise.
Back in the day I lamented Microsoft's stranglehold on the software industry. They are still a behemoth but they no longer have the stranglehold they once had. Amazon has competition. Does Amazon unfairly leverage its marketplace monopoly to crush competitors? If they do, prosecute them. If they don't, out innovate and out compete them!
Will Google's stranglehold on search ever be broken? Maybe we'll have to think laterally. Like distributed open-source search. Will Facebook's hegemony over social media (FB, FB messenger, WhatsApp, Instagram) ever be challenged? Do we have the luxury of finding out in a decade or two like we did with Microsoft? Microsoft never amassed the data on their "customers" that Google and Facebook and every Tom, Dick, and Harry do now.
Of all these companies I intuitively feel that Facebook should be broken up. Into its constituent social media parts, that is. Either that or legally mandate interoperability so that we can move to a federated social media landscape to encourage genuine innovation and competition. We need the global equivalent of the ITU but for social media.
Amazon are scary but that's only because they are bad-ass. If they break the law, fine. If it turns out in a decade that it hasn't been possible to unseat or challenge the enormous tech incumbents with FOSS challenges then maybe we ought to take a serious look at the economics, social dynamics, and network effects involved.
edit: clarity
edit ii: could people who have downvoted my comment explain why please?
Yes, I still think that breaking up MS still would have been a good idea. It took three unexpected developments for MS to be as docile as it is now:
- The rise of Linux and F/OSS more generally. There are all sorts of reasons it didn't have to happen.
- The failure to execute competently on mobile (making a scaled-down Windows instead of a mobile-first OS) at the exact same time that Apple, almost out of nowhere, was executing competently, and Google, not previously an OS or hardware company, acquired Android, which depended on Linux and other FOSS being ready and robust for consumer use.
- The failure to execute competently on the internet. They certainly had the positioning (IE, ActiveX, IIS, Hotmail, MSN, etc.), skills, and compute capacity to have won on everything from personal cloud services like email/docs to cloud computing infrastructure.
FOSS was a miracle and the other two mistakes. We can't write laws as if we assume that miracles and mistakes will happen.
> In the end Microsoft's OS gained proper competition through the paradigm shift of FOSS, specifically with Linux.
Are you sure? Microsoft's monopoly was mostly on desktop PC operating systems, and almost all desktops are still running Windows. Most people have never heard of Gnu/Linux and wouldn't want or even know how to install it if they had. MacOS is exclusive to one luxury brand, and I really don't see it much outside of developers and college students.
> Either that or legally mandate interoperability so that we can move to a federated social media landscape to encourage genuine innovation and competition.
The Facebook API providing "interoperability" is exactly what got 100 million people's data leaked and a $5 billion fine from the FCC. These companies shouldn't be allowed to provide an open api, as we keep seeing there's no way to make it secure.
Microsoft overreached by giving away IE to killing Mozilla. That's what really caused the consent decree to get issued. I find it hard to believe that you would have gotten Amazon/Google/Facebook if Microsoft had a stranglehold on the desktop.
I don't agree with your take on Amazon. We can't trust the US government to police the large companies. The large companies are too good at (a) walking right up to the line or (b) buying off the people who make/enforce the laws.
[+] [-] jessaustin|6 years ago|reply
[+] [-] geofft|6 years ago|reply
Warren's argument here is a straightforward free market one: free markets only work when there's a free flow of information. If Amazon both runs the market and participates in it, it's an inherently unfair playing field. Her argument is not that we should break up companies that we don't like or even those that hurt consumers; her argument is we should break up companies whose intact existence threatens the fundamental nature of free markets.
All that said, as it happens, she opposed Comcast's attempt to buy Fox https://thehill.com/policy/technology/396559-senate-dems-urg... and the T-Mobile / Sprint merger https://thehill.com/policy/technology/429618-dem-senators-ur... — opposing both on the grounds that they're anticompetitive.
[+] [-] dgacmu|6 years ago|reply
[+] [-] kryptiskt|6 years ago|reply
[+] [-] analog31|6 years ago|reply
[+] [-] patientplatypus|6 years ago|reply
[+] [-] pgcj_poster|6 years ago|reply
[+] [-] Faark|6 years ago|reply
- As a foreigner, I'm amazed by how little weight Americans seem to put on international competitiveness will certainly rile up a lot of readers. Those who don't like the plan and thus disagree with it being equated as "American" just like that who don't think it will ruin everything.
- The second sentence overtly states "US competitiveness == Big companies (and nothing else)" while painting the politicians as intensionally harmful
- The last one again presupposes the plan to fail, and now also for it to necessarily crush the "post-breakup pieces".
- There also seems to be a general sentiment that non-american must be bad for America.
And this are just the ones I spotted. The post doesn't justify any of those. In a verbal conversation, this would certainly harmful to the exchange of ideas and likely be used by people wanting to further their agenda by driving the other side into defending positions (if lucky with those facts included). I hope the effects in text are not as bad.
[+] [-] macspoofing|6 years ago|reply
Embarrassment of riches. There's an attitude in America that being in the lead is just the default state because America has been a leader in tech for decades now. Meanwhile most international multinationals are jealously guarded and protected by their respective national governments and are seen by the respective populations as their national pride (e.g. VW in Germany)
A good example is the vilification of the Silicon Valley tech scene by local governments (looking at you San Francisco) while every other nation is desperately trying to recreate it within their own borders - because who doesn't want thousands of high-paying / high-tech jobs in their region? Or how Amazon had their new HQ driven out of New York by local activists and local 'progressive' politicians.
Embarrassment of riches indeed.
[+] [-] archagon|6 years ago|reply
[+] [-] wwarner|6 years ago|reply
[+] [-] thefounder|6 years ago|reply
Well Trump or whoever is the president then can instate a national security emergency and kick out that foreign company. I know this sounds like a broken record but it looks like this is how trade works now.
[+] [-] Proven|6 years ago|reply
[deleted]
[+] [-] qieja|6 years ago|reply
[deleted]
[+] [-] mtgx|6 years ago|reply
[deleted]
[+] [-] jellicle|6 years ago|reply
You're also misunderstanding the effects and purpose of breaking up larger companies, which are: to restore and increase competitiveness.
[+] [-] notus|6 years ago|reply
[+] [-] TheOtherHobbes|6 years ago|reply
As a very crude and not entirely accurate rule of thumb, large US corporations operate with a monopolistic mindset which is inherently developed-Western-going-on-global.
Competitive countries operate with a more explicitly nationalistic mindset which makes it harder for them to operate in the same market spaces in the same way. (Not impossible - just harder.)
And the language barrier will always be a problem.
So no - I don't expect non-US corporations to take over.
[+] [-] brianliou91|6 years ago|reply
In her example of Amazon being a platform and information aggregator, wouldn't a brick & mortar grocery chain like Safeway/Vons/CVS be guilty of the same anti-competitive practices when they sell "Safeway Brand Fruity Os" next to Kellogg Fruit Loops?
Businesses seem to have been able to be platforms and information aggregators for a very long time and we've had plenty of innovation and competition
[+] [-] habnds|6 years ago|reply
On the other hand, maybe the analogy isn't good because safeway displays products side by side while Amazon can more easily promote their own products. Level on a shelf has much less effect than a product being out of sight at the bottom of a webpage or even the second page of search results.
Grocery store margins are razor thin though, they compete with each other a lot.
[+] [-] nabla9|6 years ago|reply
I beg to differ with data:
https://concentrationcrisis.openmarketsinstitute.org/
Just pick industries industry and compare numbers.
Random example: Home Improvement Stores
2003: Market share of largest 3 Firms: 47%
2017: Market share of largest 3 Firms: 87%
[+] [-] geofft|6 years ago|reply
If I make Unprovable Loops ("Part of this Turing-complete breakfast") and I'm not satisfied with the distribution deal I get from Safeway, I can always call up Von's or CVS or Target or Whole Foods or Walmart and see what they'll do, and in most cities there are multiple such options.
I do wonder if the problem here is inherent to being an online store. If there's a Safeway in one part of town, a new Walmart in another part of town will sell roughly as much cereal as a second Safeway. But if Amazon.com exists and is generally useful, why would people go to another site? So perhaps some of the traditional/historical safeguards against any one store becoming a monopoly on the market no longer apply.
[+] [-] igravious|6 years ago|reply
The idea was that time and again Microsoft's OS division would anti-competitvely design internal APIs in DOS and Windows that its App division would leverage. There were also instances where Microsoft subtley broke DOS (and maybe even Windows, but definitely DOS) for competing applications. People used to talk about "undocumented" API calls.
In the end Microsoft's OS gained proper competition through the paradigm shift of FOSS, specifically with Linux. Microsoft helped a key competitor (Apple) off its knees and look where we are now – Apple has a mobile OS, Microsoft has none. Microsoft didn't board the internet/web train quick enough, didn't forsee how big search and social media would become (in fairness, a vanishingly small number of people did) and so now they have Google and Facebook to compete with. Amazon parlaying their experience from a building an at-scale marketplace to a cloud-computing platform took everyone by surprise.
Back in the day I lamented Microsoft's stranglehold on the software industry. They are still a behemoth but they no longer have the stranglehold they once had. Amazon has competition. Does Amazon unfairly leverage its marketplace monopoly to crush competitors? If they do, prosecute them. If they don't, out innovate and out compete them!
Will Google's stranglehold on search ever be broken? Maybe we'll have to think laterally. Like distributed open-source search. Will Facebook's hegemony over social media (FB, FB messenger, WhatsApp, Instagram) ever be challenged? Do we have the luxury of finding out in a decade or two like we did with Microsoft? Microsoft never amassed the data on their "customers" that Google and Facebook and every Tom, Dick, and Harry do now.
Of all these companies I intuitively feel that Facebook should be broken up. Into its constituent social media parts, that is. Either that or legally mandate interoperability so that we can move to a federated social media landscape to encourage genuine innovation and competition. We need the global equivalent of the ITU but for social media.
Amazon are scary but that's only because they are bad-ass. If they break the law, fine. If it turns out in a decade that it hasn't been possible to unseat or challenge the enormous tech incumbents with FOSS challenges then maybe we ought to take a serious look at the economics, social dynamics, and network effects involved.
edit: clarity
edit ii: could people who have downvoted my comment explain why please?
[+] [-] geofft|6 years ago|reply
Yes, I still think that breaking up MS still would have been a good idea. It took three unexpected developments for MS to be as docile as it is now:
- The rise of Linux and F/OSS more generally. There are all sorts of reasons it didn't have to happen.
- The failure to execute competently on mobile (making a scaled-down Windows instead of a mobile-first OS) at the exact same time that Apple, almost out of nowhere, was executing competently, and Google, not previously an OS or hardware company, acquired Android, which depended on Linux and other FOSS being ready and robust for consumer use.
- The failure to execute competently on the internet. They certainly had the positioning (IE, ActiveX, IIS, Hotmail, MSN, etc.), skills, and compute capacity to have won on everything from personal cloud services like email/docs to cloud computing infrastructure.
FOSS was a miracle and the other two mistakes. We can't write laws as if we assume that miracles and mistakes will happen.
[+] [-] pgcj_poster|6 years ago|reply
Are you sure? Microsoft's monopoly was mostly on desktop PC operating systems, and almost all desktops are still running Windows. Most people have never heard of Gnu/Linux and wouldn't want or even know how to install it if they had. MacOS is exclusive to one luxury brand, and I really don't see it much outside of developers and college students.
[+] [-] saddlerustle|6 years ago|reply
The Facebook API providing "interoperability" is exactly what got 100 million people's data leaked and a $5 billion fine from the FCC. These companies shouldn't be allowed to provide an open api, as we keep seeing there's no way to make it secure.
[+] [-] deaddrop|6 years ago|reply
They caught wind of their "mistake" and "corrected" that error in Windows 10 but have since slightly changed course under pressure[0].
[0] - https://www.theverge.com/2017/4/5/15188636/microsoft-windows...
[+] [-] s_Hogg|6 years ago|reply
[+] [-] joshuaellinger|6 years ago|reply
I don't agree with your take on Amazon. We can't trust the US government to police the large companies. The large companies are too good at (a) walking right up to the line or (b) buying off the people who make/enforce the laws.
Don't understand the downvotes either.
[+] [-] dingo_bat|6 years ago|reply
[deleted]
[+] [-] blargmaster33|6 years ago|reply
[deleted]
[+] [-] peanutgal2600|6 years ago|reply
[deleted]