Elizabeth Warren Adds Apple to List of Tech Firms to Be Broken Up

Senator Elizabeth Warren added Apple to her list of big tech companies she wants broken up. She proposed classifying firms running a market place and generating annual revenue of over $25 billion as “platform utilities.”

Split Apple From the App Store

The Democratic Presidential hopeful cited Amazon, Google and Facebook when she originally announced the policy. However, speaking to The Verge during SXSW, Senator Warren said that Apple should also be included.

“Apple, you’ve got to break it apart from their App Store,” she said. “It’s got to be one or the other. Either they run the platform or they play in the store. They don’t get to do both at the same time.”

Senator Warren argued that “the problem all the way through this,” is firms being “in competition with others who are developing the products.” For example, she does not want Amazon to sell Amazon Basics through its own retail stores.

“If you run a platform where others come to sell, then you don’t get to sell your own items on the platform because you have two comparative advantages,” she explained. “One, you’ve sucked up information about every buyer and every seller before you’ve made a decision about what you’re going to to sell. And second, you have the capacity — because you run the platform — to prefer your product over anyone else’s product. It gives an enormous comparative advantage to the platform.”

Railroading Big Tech

Senator Warren compared her proposal to policies applied to railroad companies over a century ago. She said that at on point those firms were able to both sell train tickets as well as own the steel companies whose steel was transported, at reduced cost, on the same railroads. “My principle is exactly the same: what was applied to railroad companies more than a hundred years ago, we need to now look at those tech platforms the same way,” she said.

6 thoughts on “Elizabeth Warren Adds Apple to List of Tech Firms to Be Broken Up

  • I see the point of view here. It fits into the growing push to bring Anti-trust back in alignment with the 1960s, when competition was as important as — maybe more so than — consumer prices.

    • Physical Retail stores like Best Buy or Sears are unlikely to be affected, since they have a wide range of competing products on their shelves.
    • Physical company stores like Apple, or Sephora, or Old Navy should not be affected, because it’s publicly understood they are there to sell that company’s stuff… plus whatever third party things they deem advantageous. Competition in-store is lost, but there’s plenty of competition from other store chains.
    • Online stores like Amazon or the Apple App Store are different, because they’re the only game in town, on a practical level.
    • these online stores also are currently able to show their own products without even acknowledging that competitors are available. That’s where the real abuse lies.

    The key, as always, is whether the company has a monopoly advantage, and it represents an abuse of monopoly power. What qualifies as “the only game in town” has been argued for decades. Whether something is considered an abuse has also been argued for decades, and the perspective on that has certainly shifted back and forth over the last century.

    I’m still not sure which side I would agree with.

    For some backgrounds, listen to NPR Planet Money’s trio of recent podcasts:

  • This is crazy. So besides the Steve Jobs “we make the whole widget” that she wants to destroy, she wants Apple to either a) give up the app store and then is free to make apps, or, b) keep the app store and offer no software.

    To call this crazy is an insult to the crazy. She vague points to some bizarre conflict of interest in running your own store and selling your own wares along with others.

    So BestBuy stores that sell their own branded goods with others, Sears selling Kenmore (owned by Sears), Costco selling their (Kirkland) brands with others, every major supermarket selling its own brand of goods with others, that and zillion other examples throughout American history, were all evil. Apple better stop selling its own computers and phones in its own physical stores and because it’s not “fair” to 3rd party computer, phone and peripheral makers.

    Oh yea, doesn’t matter that Apple has a minority of market share in the industry, screw zillion years of anti-trust law, this lunatic knows best. Ug. Pathetic.

    There is less than zero merit to this, unless you find merit in brain damaged ideas and people.

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