Elizabeth Warren aims to break up tech giants to increase competition

Amazon U.S. homepage

 

U.S. Democrat presidential hopeful, Elizabeth Warren has vowed to break up the dominance of major tech companies such as Google, Amazon and Facebook. To three hundred of her supporters, she said:

 

We have these giant tech companies that think that they rule the earth. I don’t want a govenment that is here to work for the giant tech companies. I want a government that’s here to work for the people.

This isn’t the first time that Amazon has faced fierce criticism from Democrats. Last year,  Bernie Sanders put pressure on Amazon to raise the wages of workers. Amazon CEO caved in, promising a US$15.00 wage for workers.

Severe lack of competition

There is a severe lack of market competition in the tech sector. While there are a numbe of different apps, they are mostly owned by single companies. For example, Facebook Inc owns Facebook, Messenger, Instagram and WhatsApp.

Branding of products

Senator Warren is also critical of Amazon, Facebook and Google doing ‘in – house’ advertising; for example, Amazon preferring to advertise their own products above that of an outside company/ publisher. It makes sense that a company would prefer to market their own products, but a lack of competition gives Amazon an unfair advantage. Senator Warren wants to limit the number of places in – house products can be advertised and sold. For example, the proposed law would make Apple choose between selling apps on iOS or their App Store,  but not both.

Potential pitfalls of the proposal and solutions

While supporting the premise, Kevin Roose of New York Times has reservations about the move. Austin – based independent tech workers ferared that the legislation could backfire, given it’s lack of clarity.

Roose also offered ideas so the proposal doesn’t fall through: be specific in present problems and offer specific solutions that’d suit each platform, (Roose argues that a sweeping law targeting Amazon and Facebook wouldn’t work given the different nature of the businesses). He pointed out that for some reason Cloud technology was absent from the proposal. Companies like Apple and Google should also be forced to drop their 15 – 30% tax on new developers. Roose also warns Senator Warren to avoid the censorship debates.

 

I really applaud Senator Warren and other Democrats for trying to implement moves to make the online market more fair. I’m a huge critic of major companies killing the possibility for competition. In Australia, I’ve hated how Coles and Woolworths were able to knock off independent grocers and fuel market. Now, it’s too late. However, competition has come back with Gerrman Aldi and Us’s Costco entering the Australian retail market.

 

It boils down to consumers

Despite it’s flaws, Facebook still held the record for most monthly users, according to Dreamgrow. Instagram came in third after YouTube.

It seems that Facebook is still widely trusted. Unless people use it simply out of habit.

I’ve written before about some of the benefits of Amazon, especially when it comes to music and how other music stores often fail to offer the range of albums that Amazon does. So who can compete? Who can offer the same range of books, CDs, downloads that Amazon has done for years?

There are slightly more competition in the social media market with WeChat, Tumblr and TikTok, however, Facebook Inc is still the most powerful tech giant.

 

It’d be great to see more competition in the online retail and social media sectors. Along with legislation, companies need to somehow win over consumers tge way Facebook, and Amazon have for so long.

 

 

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