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Elizabeth Warren's call to break up Amazon, Google is a real threat

It has been a long time since antitrust policy has been a major issue for a presidential election. Elizabeth Warren is trying to change it – and that's bad news for Amazon, Facebook and Alphabet, Google's parent company. On Friday, Warren declared that if she was elected president, one of her centerpiece politicians would be breaking up the three major corporations. She wants to unwind her previous mergers and divide other parts of her business to force in force and increase competition. Right now, Warren is still a long shot to secure the Democratic Party's nomination, much less win the 2020 election, so technical companies are not in direct danger. But Jeff Bezos, Mark Zuckerberg and Larry Page would be stupid to dismiss the threat she just released. Warren taps into public anxiety about technology's influence on our lives and channels it into a legal mechanism that, although roasted, has become over the years, has the capability to submit even the most powerful companies. With a two-year election cycle that just started, the technology industry is now officially the first US corporation's crook &#821 1; more dangerous than Wall Street bankers or Martin Shkreli – and the debate is now focused on real reforms based on legitimate antitrust policies rather than just populist rage . That's bad news for big tech. Even though she is not elected president, Warren's movement has increased the chances that the rulers of the university will face injurious criticism, no matter who criticizes. Warren wants…

It has been a long time since antitrust policy has been a major issue for a presidential election.

Elizabeth Warren is trying to change it – and that’s bad news for Amazon, Facebook and Alphabet, Google’s parent company.

On Friday, Warren declared that if she was elected president, one of her centerpiece politicians would be breaking up the three major corporations. She wants to unwind her previous mergers and divide other parts of her business to force in force and increase competition.

Right now, Warren is still a long shot to secure the Democratic Party’s nomination, much less win the 2020 election, so technical companies are not in direct danger. But Jeff Bezos, Mark Zuckerberg and Larry Page would be stupid to dismiss the threat she just released.

Warren taps into public anxiety about technology’s influence on our lives and channels it into a legal mechanism that, although roasted, has become over the years, has the capability to submit even the most powerful companies.

With a two-year election cycle that just started, the technology industry is now officially the first US corporation’s crook &#821

1; more dangerous than Wall Street bankers or Martin Shkreli – and the debate is now focused on real reforms based on legitimate antitrust policies rather than just populist rage .

That’s bad news for big tech. Even though she is not elected president, Warren’s movement has increased the chances that the rulers of the university will face injurious criticism, no matter who criticizes.

Warren wants to shine a spotlight on the major technologies

The technology industry has never really met this type of review. Yes, some companies in the industry have faced anti-trust measures, including Microsoft in the notorious trial at the end of the last century. And some of these actions, including the Microsoft trial and the AT&T resolution in the 1980s, sparked public attention.

But the discussion of what to do about the behavior of these companies was generally left to the courts or federal agencies. It was not a major topic of debate in a presidential election. For example, in 2000, President George W. Bush said a little about the Microsoft trial, which was then in progress, and it was an open question when he took office for how his administration would deal with the case. When his justice department agreed on a settlement that ended up breaking up the company, the decision came as something of a surprise.

Warren does not want antitrust policy to be ignored this time. Instead, she wants the antitrust policy to be in focus and she wants a public debate on how these large technology companies should be regulated. If she succeeds, it will be one of the first times that business concentration of power has been a major issue since the Progressive Era of the early 1900s.

Part of the danger to the technical companies is what the bright light that Warren wants to shine on them will reveal about them – and how the public will respond to what they see.

Neither Facebook nor Microsoft looked good in the spotlight

For Facebook, we already have a good feeling for this. The social networking company spent much of the last two years with a Klieg light that shines on it. The company’s reputation emerged during the intense lights, revealing the casual treatment of customers’ private data, its dubious business practices and how the core product – newsfeed – had been hijacked to spread dangerous propaganda.

In connection with these revelations, Facebook’s user development has stopped in the US and Europe, its revenue growth has decreased and people are using it less. It is also facing a major fine from the Federal Trade Commission, and the exposure has strengthened calls from critics to impose new restrictions on its business.

A similar thing happened to Microsoft antitrust tests two decades ago. When the government began reviewing the software giant, it was among the most respected and beloved companies in the public. But the revelations from the trial of their ruthless business practices, in particular the pure arrogance and despair that President Bill Gates showed in his testimony to the case contributed to the souring of the company.

Bill Gates. Reuters / Jeff Christensen

The credible battle that Microsoft took from the trial created an opening for its competitors in addition to the restrictions imposed by the government on its activities as part of the settlement that closed the case . After the test, consumers and businesses were much more willing to try rival services, such as Google’s search engine and its productivity tools, which later came out.

At the same time, other companies were much more protected to do business with Microsoft, who did not want to be in the same position as PC manufacturers in the 1990s, when the software giant dictated all conditions in the relationship.

Amazon and Google may face similar problems if Warren can also focus the spotlight on them as well.

Warren tries to fundamentally change antitrust policy

But Warren calls a bigger danger for Amazon, Facebook and Google because she tries to fundamentally change the terms of the debate. Under the influence of conservative economists from the University of Chicago, in the early 80s, the federal government completely reconsidered how the audited corporate power.

Instead of seeing concentrations of weakness in corporate power, federal regulatory authorities generally came to see them positively. Instead of worrying about the effects of such force on competition in some markets or other business-related issues, they began to focus on just one aspect: price. In general, they only worried about maintaining antitrust laws if a company used its market power to raise consumer prices or would likely do so.

Read more : Facebook, Google, Apple and Amazon have too much power – so it’s time for regulators to take on tech titans

But in recent years, one Growing collection of academic experts on the left has pushed back towards this focus on price. Such limited lenses ignore the wider damage caused by concentrated business power, they say. In many cases, they are supported by extensive investigations that limited competition in a wide range of industries has kept wages low, counteracting the formation of new businesses and employment growth, hindering innovation and undermining democratic government.

So far, the debate on whether to take a broader picture of antitrust policy has been largely confined to academic circles and the policy has become widespread. Warren, whose proposal is based on research and arguments for left-wing advocates of renewed, robust anti-terrorism, makes a bid to take his opinion on competition policy as a rule by putting the foremost and central in the presidential election.

Amazon, Facebook and Google prefer to stick to the prices

It’s something Amazon, Facebook and Google – not to mention other corporate giants that dominate their own markets – really don’t want to.

If the antitrust policy continues to focus only on price, Amazon, Facebook and Google can easily argue that they are not a problem. Facebook and Google offer their services for free to consumers, and Amazon is known for the low prices of its products.

But if the regulators begin to examine the wider effects of their power and how it distorts their respective markets, they are much more likely to see the need to crack down on the major technologies.

Google cofounder Larry Page. Justin Sullivan / Getty Images

The European Union, which is not fixed on consumer prices, has already found that Google was illegally trying to worsen competition by rivals and has fined it billions of dollars. Publishers have complained for years that Facebook and Google’s dominance over digital marketing have left little room for them to build sustainable businesses.

Read more : Europe’s racing jazz is wrong – it’s a long time to break up Google

And retailers and merchants have accused Amazon of undermining their businesses. Partly because of Amazon’s power over e-commerce, they feel compelled to offer their goods on their site. But they accuse Amazon of using information that collects about their sales to identify their most popular products and offer competitors who fail them on price.

Google, Facebook and Amazon would almost certainly not have to defend such practices to regulators or to court. But thanks to Warren they may soon have to.

Warren can never be president, and she never gets the chance to introduce the political guidelines she proposed on Friday. But she has increased the chances that Amazon, Google and Facebook will see a comeuppance from the one taking the White House.

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