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From Antitrust Law Daily, March 8, 2019

Presidential hopeful Elizabeth Warren pledges to break up Amazon, Facebook, and Google if elected

By Jeffrey May, J.D.

On the campaign trail, the senator promises that there would be "big, structural changes to the tech sector" under her administration.

"Today’s big tech companies have too much power—too much power over our economy, our society, and our democracy," Senator Elizabeth Warren (D., Mass.) said in an online post as she campaigns for the Democratic presidential primary nomination. "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," she added.

Warren suggested that the growth of Facebook, Google, and Amazon "highlights why the government must break up monopolies and promote competitive markets." Referencing the government’s monopoly case against Microsoft, which started in the late 1990s, Warren said that the enforcement action "helped clear a path for Internet companies like Google and Facebook to emerge" and that "the story demonstrates why promoting competition is so important." Yet, she went on to add: "Aren’t we all glad that now we have the option of using Google instead of being stuck with Bing?"

Warren described specific conduct that she took issue with, including efforts by Facebook to purchase potential competitors Instagram and WhatsApp that were "waved through" by regulators and Google’s alleged tactics to snuff out a competing small search engine by demoting its content on its search algorithm. The senator blamed "weak antitrust enforcement" for "a dramatic reduction in competition and innovation in the tech sector."

Senate antitrust subcommittee hearing on America’s monopoly problem. Warren’s post comes just days after a hearing on concentration in the U.S. economy was held by the Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy, and Consumer Rights. At the March 5 hearing, entitled "Does America Have a Monopoly Problem?: Examining Concentration and Competition in the US Economy," the Subcommittee Chairman Mark Lee (R., Utah), and Ranking Member Amy Klobuchar (D., Minn.) debated that very question.

Lee cautioned against assuming that economy is dominated by monopolists and that economic concentration has been increasing. He also suggested that much of the concern that frames the debate over concentration was primarily with the tech sector.

Klobuchar, who is also running for president, took the opposite position, noting that the economy continues to see a "wave of corporate mergers." She also questioned the notion that increased concentration was a problem only in the tech industry. In addition, Klobuchar expressed concern with how the courts have become increasingly skeptical of antitrust enforcement.

The subcommittee heard from members of academia, including former Secretary of Labor Robert B. Reich, former FTC commissioner Joshua D. Wright, and A. Douglas Melamed, a former Acting Assistant Attorney General in charge of the Department of Justice Antitrust Division.

Growing tech sector scrutiny. The Department of Justice Antitrust Division continues to stress that "Big is not bad. Big behaving badly is bad." However, the tech sector is facing increasing scrutiny from the other federal antitrust agency. The FTC recently created a Technology Task Force to be established in its Bureau of Competition that will monitor competition in the sector, probe anticompetitive conduct, and take enforcement action if necessary. The agency also said that it would be looking at consummated mergers in the tech sector.

Companies: Amazon.com, Inc.; Facebook, Inc.; Google, Inc.

MainStory: TopStory AcquisitionsMergers Antitrust AntitrustDivisionNews FederalTradeCommissionNews

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