Trust Busting the Silicon Valley

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

I could direct this column at Silicon Valley with an “I told you so.” Sen. Elizabeth Warren’s Friday proposal to break up big tech companies bears out my warning on this site from last September that tech companies’ actions are setting the stage for a return to Teddy Roosevelt type trust-busting.

In her post explaining her plans to break up the likes of Google, Facebook and Amazon, Warren referred to the trust busting efforts of the early 20thcentury. She argues that now, like a hundred years ago, monopolies are bad and competition is good. The growing tech giants that gobble up competitors wipe out the competition that is needed to make companies better and stymies innovation.

Wonder if she applies that same philosophy to government monopolies that attempt to thwart competition in the field of education? But I digress.

Months ago, the U.S. Justice Department gave notice that it too was looking into the growing concern that big tech was hurting competition and stifling the free exchange of ideas.

The concern I raised last September that social media platforms could be declared public utilities is a plan Warren embraced as something called “platform utilities.” Warren wrote: “These companies would be prohibited from owning both the platform utility and any participants on that platform. Platform utilities would be required to meet a standard of fair, reasonable, and nondiscriminatory dealing with users. Platform utilities would not be allowed to transfer or share data with third parties.”

How will the Valley respond? Days before Warren’s announcement, Facebook’s Mark Zuckerberg declared a new “privacy manifesto” to reassure users about Facebook’s concern over privacy issues. Big tech is feeling heat. However, the offered solutions won’t turn down the flame. Both the New York Times and the Wall Street Journal panned Zuckerberg’s proposal.

Be careful of all the regulators Warren plans to send out across the Internet to force the break-ups and the post break-up adherences to whatever rules are created. There is also a danger to innovation and entrepreneurship from a swarming locust of regulators.

At the end of my trust busting column last September I asked: “Is it too hard to imagine that either political party, sensing public frustration with the dominance of the Internet mega companies, could pull out Teddy Roosevelt’s big stick and attempt to re-create some form of trust busting for the modern era?”

Now, Warren has introduced the idea into the presidential contest, which begs the question, what will be the political repercussions?

Silicon Valley has had a cozy relationship with Democrats, sending large portions of political donations to Democrats. Will Republicans stand up for these businesses with the possible payoff of Silicon Valley donors switching sides? Or will vote counters find that the trust busting appeals to the public and Republicans will come up with their own version of tech break-ups, presumably with fewer regulators?

And, how will Kamala Harris respond?

The California senator has good relationships in the Silicon Valley and counted on her friends there to support her presidential bid. Keeping a distance from the Warren proposals could strengthen her ties with Valley leaders at the risk of offending progressive voters who want to take big business down.

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