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Elizabeth Warren Came Up with a Plan to Break Up Big Tech (newyorker.com)
193 points by Elof 84 days ago | hide | past | web | favorite | 338 comments



The anti tech sentiment amongst candidates like warren and sanders is a bit annoying. if you rank order the problems we need to solve as a nation this issue wouldnt even make it in the top 10. its getting more attention than it should. i think a part of the reason is just this deep seated feeling within people that if some group of people became really really successful (and especially really really fast) there must be something unfair or fishy about it. that they don't really deserve it or somehow cheated. atleast this is the feeling i get when i hear warren or sanders.


I think that's the psychology of it: https://www.youtube.com/watch?v=-KSryJXDpZo

(video of monkey getting a grape and the other monkey getting a cucumber)


So Costco doesn't have to spin off the Kirkland brand even though they operate an online marketplace (Costco.com), but Amazon does with AmazonBasics? So many things wrong with that.


Does costco have a web platform for selling goods? Does it exceed the revenue limit? Does it sell own brand goods through its web platform?

Yes to all three, so it would be caught by this law as it is stated here.


I think Costco might actually not have a web platform as described, if there are no third-party merchants there. Presumably all the products on their site go through them, just like the products in their physical stores.


Who said that Costco doesn't?


I'm just here waiting for a plan to break up Big Government.


You're missing it happen right before your eyes! Every time a lobbyist writes the bills our congress passes, every time the state is defeated by the courts, every rollback of an EPA rule or opening of federal lands to drilling, every time a platform controls the speech of its users- those are all examples of our government's power shrinking!


> those are all examples of our government's power shrinking!

No they aren't. They are examples of the government's power growing and being manipulated. There's no power to manipulate if the government stays small.

So many of our problems today are the result of a government that is so large and powerful that it is more profitable to direct resources to lobbying instead of directing resources to providing better goods and services. When government is small, there is less incentive to corrupt it.


On that note, one of Elizabeth Warren's primary focuses seems to be the concept of who the government works for. To that end, the boogieman of "big government" can either be positioned as something that fights for its citizens or fights for special interests and corporations.

I think the idea of "Big Government" is amorphous, in that is calls into question the purpose of a governing body.

Who, or what, should be the governments number one priority? It seems universal that keeping its citizens safe (military, police) and supplying fundamental services (roads, fire departments) are accepted by all but the most jetpacky libertarians. Do we believe that we have the capacity to extend other foundations of wellbeing to be rights as well? This is the crossroads we're at with healthcare, protecting the environment (by investing in clean technologies and slowing down the harm we're inflicting through other practices), and living wages?

That's what I see as the crux of this conversation. Who does the government work for? And who SHOULD it be working for?


Here's the problem: Humans are not angels.

We, the people, we are not angels. So we need government to protect us from each other.

But those people in government? They aren't angels, either. So the trick is to have the government keep us from harming and oppressing each other, without the government harming and oppressing us. That was the point of the "limited government" idea, and the Constitution - government couldn't do everything; it could only do a few specific things. That is, they optimized for minimizing the harm government could do, rather than for maximizing the good.

And it's worked reasonably well, though not perfectly, even while government grew enormously compared to the original idea. Still, the fact remains that government is not run by angels. Those programs that you think are a good idea? Imagine that they're being run by selfish, foolish, corrupt people. Are they still a good idea? (Some may be. Surely not all, though...)

Reminding people of who the government works for may help, somewhat, for some time. But it won't really fix the problem.


> And who SHOULD it be working for?

The people that employ them: taxpayers.


I completely agree with you.


Honestly, I look at what we can measure and monitor at big tech companies today and there's nothing I want more than metrics driven legislation.

There is no reason that we should be passing any legislation today without attached measurable criteria for success and criteria of measurable side effects that might be impacted. If the legislation does actually measurably improve something or causes unwanted side effects, it should be removed automatically. In 2019, we absolutely have the technology to run the government the exact same way as tech companies.

So many of the services the government provides could easily be metered and we charge citizens directly based on what they individually consume instead of indiscriminately taxing people to pay for those services.


The prospect of Warren alone could crash the market as we draw closer to 2020. The first leg will be health care then the rest. I am actually not against her ideas but deeply concerned about implementation.


Just like the market crashed in 2012 with the re-election of President Obama and the market crashed in 2016 with the election of President Trump?


Amazon, Google, etc. are global companies. Every other country wishes that those companies were theirs. They're major drivers of prosperity in the US - armies of well-paid engineers and lower prices for consumers. Planning to wreck them seems terribly shortsighted.


Something interesting is when Warren came to Silicon Valley (well technically the East Bay), people cheered when she talked about breaking up big tech. I can't imagine what would have happened if a candidate went to West Virginia and talked about regulating coal, went to Iowa and talked about removig corn subsidies or went to Detroit and talked about phasing out ICE vehicles. I think a lot of people here see the problems that the FAANGs are creating and want to fix it.


The road to hell is paved with good intentions.


And the road to mediocrity is paved with thought-terminating clichés.


> Bork’s consumer-based theory had many flaws. One of the most obvious was that it did not anticipate the rise of online companies such as Facebook and Google, which offer their products to consumers for free.

Not entirely true [1]. For one thing there were close and similar models at that time. For example yellow pages were given out for free and advertising was sold. Second there were (and still are) many local newspapers that make money solely off of advertising. And along those lines I would argue that even paid newspapers are close. Why? They give a great deal of value for the small amount that is paid in exchange for viewing advertising. Ditto for tv broadcasts the content is free (as long as you have a tv set) and they make money off advertising.

[1] And I wouldn't call something that in no way could have anticipated the future in the way it rolled out 'a flaw' anyway.


Not only is this not "entirely" true--it's not at all true. The author is disguising a (hotly contested) opinion/minority position as a well-accepted fact.

The mainstream position in the antitrust world, even among liberals (at least until recently), is that Bork's theory is generally right. (For example, Barack Obama's antitrust appointees would generally have agreed with it.)

What Bork did was bring economic models (i.e. math) to bear in antitrust analysis. Before Bork, antitrust law was basically run on judges' intuition about whether business practices were good or bad. After Bork, there is more structure to the analysis--if we are trying to figure out whether things are good or bad for consumer prices, there's an economic framework we can use so that we're not just making random guesses.

You can quibble with the math, but it seems crazy to go back to a world where we just say "big mergers are bad." Some mergers are bad, sure. But some are not. For example, I have yet to hear anyone explain why Amazon's purchase of Whole Foods is bad for anyone other than other grocery stores (who have to try to compete as Amazon figures out grocery delivery).


No one who works in tech should be supporting these kind of initiatives or the people that come up with them. Yet looking around, it seems many people in tech don’t really understand what’s at stake.


Or they understand exactly what’s at stake, and that’s why they support plans like these.


If they just want to watch the world burn and slow our tech progress for decades, sure.


I guess for you the end justifies the means?


Far more people work in "small tech" than work in "big tech" and would either be unaffected or benefit from these initiatives.


Small size doesn’t make you safe, the negative will trickle down.


What if we believe that such a breakup will be hugely beneficial to stockholders and employees in the big tech companies, just like the breakup of Standard Oil and Bell was to theirs?


My main problem with the idea of breaking up big tech, is that foreign companies are just going to pick up the pieces. China for instance will use the weakness to use their mega partially-state owned companies to crush everyone. I just don't see how that's a positive. We live in a global economy now, we have to think of the consequences of our corporate laws globally as well.


I'm typically a smaller government type of person, but I'm actually ok with the specifics of her plan. One power that I think should never be stripped from the government is the ability to regulate parts where the free market becomes dysfunctional. I think her plan encourages competition and makes the markets healthier, so thumbs up from me.


I've been thinking that a natural way to split up many large corporations that are anti-consumer would be to require:

1. Hardware manufacturers be separated from software manufactures

2. All hardware sold must have available appropriate documentation to write software for it.

3. Hardware and software be purchasable piecemeal, even when also available as a pre-configured bundle.

For example, for Google to sell a Google Home device they would:

1. Have to have a company, Google Home:Hardware, that produces the physical device and it's documentation

2. Have a company, Google Home:Software, that implements the software for that device, and perhaps bundles it.

3. These companies can collaborate, e.g., through support contracts, but any documentation made available to Google Home:Software must also be made available to purchasers of the physical device, separate from Google Home:Software.

Advantages of this approach:

1. This supports the "Right To Repair" movement.

2. Production of hardware has a very high cost-of-entry relative to software, making it prohibitively expensive for new entrants to compete. This allows smaller entrepreneurs to build software on existing hardware designs, bringing new features to consumers.

3. New competition will help to naturally break the anti-consumer monopolies and oligopolies currently existing, because they will have to compete with features that they currently refuse to implement, fix issues they currently refuse to acknowledge.

4. As a re-iteration of 3, would provide more consumer choice. Where as right now an individual may like the hardware features of one television set, they may dislike the software features if it (privacy invasion and phoning home?). Consumers could mix and match.

Although I've focused on tech with Google, this is applicable to many industries: smart phones, TVs, smart home devices, farming equipment, vehicles, robotic vacuums...


That's sort of how it works in the automotive industry: one company makes the parts, one company assembles the car, one company sells the car and anyone can provide service.

The only downside is that there's a lot of overhead (imagine if a software project you worked on needed this amount of formality every time you talked to a UI designer or database engineer).


There are dozens of politician plans and manifestos to reorganize 'big tech'. Interesting that the New Yorker chose to feature the Warren team plan so prominently. A more rounded comparison of plans would be useful at this point in the candidate beauty contest.


Breaking apart large US tech companies will open the door for foreign large companies to fill that niche. This doesn't sound like a smart move for the US government.


Could one get around this by owning large percentages of multiple companies & just directing that they work together & buy services from each other?

In essence something companies already do since they're split up into separate sections/departments/groups.

Maybe they even split services such as HR into a consulting services organization that they all rely on.


That actually is why anti-monopoly laws are called "anti-trust". "Trust" in this case was an entity that controlled a number of companies.


If this means that google would have to stop operating the play store and Apple would have to stop operating the App store, it would simply fragment the marketplace, and consumer risk and make it even more expensive to be an independent developer or producer.

This is not the way to foster innovation. It’s a way to produce a bunch of meaningless middlemen.


Interesting the article mentions Robert Bork.

Bork was the first Supreme Court nominee to earn his own eponymous verb. Bork was put through a ringer similar to the one Judge Kavanaugh went through recently.

Per Google, the verb 'bork' means "obstruct (someone, especially a candidate for public office) through systematic defamation or vilification."


The USA has such a terrible track record when it comes to breaking up companies. Not what companies but break up but how to do it. Look at AT&T. The solution for one national monopoly? Why a collection of regional monopolies of course! I mean that's what the RBOCs (Regional Bell Operating Companies) were.

So whenever I hear about some kneejerk proposal to break up tech I expect to hear someone propose that Facebook should be broken up into two companies: one for surnames A-M and another for N-Z.

I think the only tech company where you could make any case for being anticompetitive right now is Amazon. Fedex and UPS exist largely at the whim of Amazon. Any online retailer is now at a severe disadvantage to Amazon itself as well as Amazon marketplace sellers.

Second place are the two app stores.

We're living in an era where China's tech giants are tools of statecraft and not subject to the same level of scrutiny as US companies. The Chinese market is artificially restricted from competition. By any measure of government intervention China cheats here. It doesn't really seem like the right time for the US to kill the golden geese.


> The solution for one national monopoly? Why a collection of regional monopolies of course!

Regional monopolies are far less of a threat to politicians operating at the national scale. So much of what we are observing comes down to people and institutions vying for power and trying to neuter those people and institutions in competition for that power.

This is Silicon Valley (big tech) versus Washington D.C. (big government) versus NYC (big finance).


We need to stop how big companies are growing. It's not sustainable. If we don't implement new strategies we are going to live in a well known distopic future. You all have seen the results of a company that dominates an specific market without limits.


Yeah, its so terrible being able to search the whole Internet for free, carry a computer in your pocket, and order anything delivered to your door.


Like IBM with mainframes?


Really curious what happens to the stock price of these companies if a progressive dem like Warren or Sanders wins. I mean, on election day will the price of these stocks drop double digits? Doesn't seem like these risks have been priced in at all.


usually original investors get stock in the split-up companies correct? In the long run the aggregate value of the split up / smaller basket of independent companies could be larger than the original quasi monopoly.


MS is not included? How about breaking up many other monopolies as well?


Elizabeth Warren is an idiot, and her ignorance is destructive and a threat to a productive and free society. Arbitrarily destroying businesses doesn't make anyone richer.


It reminds me of the late 1980s-early 1990s era calls to split Microsoft off into separate companies: OS and Office. A credulous judge was quoted saying "Microsoft can just take other people's products and incorporate them into Windows!"

Today, the notion of Microsoft as a threat to the world seems quaint and laughable, though at the time it was deadly serious business.

In my opinion, the FAANG monopolies will pass, just as the MS-IBM hegemony passed. Something new will emerge - a 5G-based tech, maybe, or a Chinese AI or quantum machine - that will render the current tech giants irrelevant. Warren's plan is pointless and probably would be counter-productive.


> Today, the notion of Microsoft as a threat to the world seems quaint and laughable,

Interesting considering they are the most valuable company in the world by market cap.

Addendum: Currently, MSFT's market cap is higher than Facebook, Google, Apple, and AMZN.


It fluctuates; recently, Apple was the highest, then Amazon.

The point is that few are talking about Microsoft as a monopolistic threat anymore; alternative technologies (Linux, MacOS, iOS, Android) have come along and knocked them off their once-dominant position.


Welcome to Costco, I love you! [1]

[1] https://www.youtube.com/watch?v=Z8zNsUTWsOc


will this hurt or help her chances at winning the California democratic primaries? if the tech industry does not want her then what are the other options out there?


There seems to be a blame everything on tech thing recently in the news (what is "tech" for even?)

Why not break up other industries, like some of the giant food and household companies and the shit they're practically poisoning us with. It feels like pandering to go after "big tech" constantly.

These industries are just hard to break into. Who is going to compete with Google at search at this point? We watched Microsoft throw money at and fail miserably. Social media comes and goes, Facebook the website is dieing, Facebook the company is will be around by running other social media, opinions of Facebook specifically aside why is that a bad thing?

We need politicians that are younger and in touch with the world. But still, anything but Trump at this point unfortunately.


Trump seems rather tech-savvy, and he's apparently not interested in breaking up the tech companies, though he does bash them for perceived bias. What would a "younger and in touch with the world" politician do differently?


I would hope have a better understanding of tech. To call for these companies to be broken up seems out of touch. Though this article wasn't clear abuut the problems company size is causing.


> Why not break up other industries

Are you actually asking this question, or is it like when Trump says that he won't pass gun restrictions because the real problem is mental health, but also won't raise the budget for mental health?

I think it's easier to make the (internet) tech case because they tend towards pure rent-seeking models rather than production or innovation. Warren isn't proposing breaking up hardware companies, car companies, or companies that make consumer appliances; "tech" is a shorthand for internet rent-seekers.


> they tend towards pure rent-seeking models rather than production or innovation.

I don't know how anyone can make the case that there isn't innovation and production isn't the end all be all of a functioning market. You can't buy goods and services that you aren't aware of and even if you are aware of them, you need a way to buy them.

25 years ago I couldn't type something into a box, discover a product that satisfies a need/want related to that query, buy it and have it delivered to my home in 24-48 hours all from the comfort of my home while I sit in my underwear.

Once upon a time you had to pick up a big yellow book, hunt around by category, find some businesses that may or not be related to what you're looking for if you find any business at all, make some phone calls, eventually get in your car, drive there, taking out cash from the bank along the way. The alternative was catalog companies if you knew that a company existed and had a copy of their catalog (or you had to wait for a catalog to be delivered).

And even long before that the only option was to go down to the local market and buy whatever was produced locally. If it wasn't produced locally, then you had to produce it yourself or you were SOL.


Yes I am? And no it's not like that. The problems with tech aren't related to the size of the company.

I don't get why we're focusing on tech here. Idk how you can say it's pure rent seeking with no innovation? The examples given were the usual social media sites and Google, Apple and Amazon.


My problem with Warren is she thinks that a plan or law can solve everything. If there were only a law that said, 'It's illegal to be evil,' then there wouldn't be any evil left in the world.


I am horrified by an idea that eventually, I will have to vote for Donald Trump.


Does she have a plan to win the Senate?


by the time she would be elected some of the big tech will have bigger problems.


Warren's blog uses the Microsoft antitrust case as a precedent:

> In the 1990s, Microsoft — the tech giant of its time — was trying to parlay its dominance in computer operating systems into dominance in the new area of web browsing. The federal government sued Microsoft for violating anti-monopoly laws and eventually reached a settlement. The government’s antitrust case against Microsoft helped clear a path for Internet companies like Google and Facebook to emerge.

https://medium.com/@teamwarren/heres-how-we-can-break-up-big...

And then goes on to confuse the Web browser with search:

> .. Aren’t we all glad that now we have the option of using Google instead of being stuck with Bing?

There are three reasons I'd avoid this comparison as a selling point:

1. Little of substance came from the Microsoft case:

> On November 2, 2001, the DOJ reached an agreement with Microsoft to settle the case. The proposed settlement required Microsoft to share its application programming interfaces with third-party companies and appoint a panel of three people who would have full access to Microsoft's systems, records, and source code for five years in order to ensure compliance.[30] However, the DOJ did not require Microsoft to change any of its code nor prevent Microsoft from tying other software with Windows in the future.

https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor....

2. The market handed Microsoft its richly-deserved smack upside the head with the introduction of the iPhone in 2007. There's no reason to believe that Google, Amazon, or Facebook will be immune to this process of marketplace disruption.

3. The AT&T Anititrust case seems more applicable in that it deals with a network. After the successful breakup, long distance rate fell.

> The breakup led to a surge of competition in the long distance telecommunications market by companies such as Sprint and MCI.[5] ...

https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System

From Warren's blog again:

> First, by passing legislation that requires large tech platforms to be designated as “Platform Utilities” and broken apart from any participant on that platform.

This raises the question: what's actually new here? What about the named companies is so different from previous monopolies that new laws are required?

The discussion in the New Yorker doesn't seem to address this issue. There are antitrust laws on the books. They have been used in the past. What specifically prevents them from being applied today, other than political will?


Warren is a really frustrating candidate. She's the kind of candidate I want to like. At least by the way she brands herself as a thinking person--a serious wonk. A nerd. All in ways that are good to me. She wants to say, "Look, I'm doing the hard work of figuring out good solutions to all these complex and difficult problems so that you don't have to. You can trust me and read all about it here."

But when you do read her policies, you can see she hasn't thought about these problems at all. She's basically just doing what the loudest, most ignorant complainers and pundits are saying to do.

She doesn't seem to understand that Google, Apple, Facebook, and Amazon present incredibly different problems. Beating them all up with the same stick is pointless and won't fix any of the problems.

The fact that they are big isn't really the worst of the problems they cause. In incredibly simplistic terms, Facebook is bad because of what they do with your data. Google is bad because of what it does with all the rest of the data on the internet. Apple is bad because of what they won't let people do. And Amazon is bad because of what they will let anyone do.

Chopping them up into smaller entities won't solve any of those problems. None of it addresses any of the problems at all. But in a time where doing anything is far more important to people than doing something useful, it gets traction. She also clearly does not understand section 230 of the CDA, and would like to get rid of that, which will do nothing but ensure that only the big companies--even broken up--will ever be able to compete.

The same kind of thing applies to the wealth tax idea. It's just a base appeal to class animosity. There's no nuance, and even if it did happen, it wouldn't make that much difference in our overall tax revenues. Certainly not enough to fund the kinds of programs she wants to fund. If you want to fix taxes, you have to shut down loopholes for wealthy people and corporations. The latter will make much more of an impact than the former.

I'm certainly on board with higher taxes to a certain extent. But this is just pandering to angry people who don't think the world is fair, and that's not healthy for society.

All of this really makes me question her bona fides on topics I really don't know anything about. Is it more of the same shallow pandering? I haven't really heard any good policy ideas from her so far, and as much as I want to like her as my kind of candidate, I just don't have any reason to believe she'll do anything worthwhile if she does get elected aside from not being Trump. Which is valuable to me, I admit. But . . . is a huge swath of awful social, tax, economic, and tech policy actually better than having to deal with the buffoonery we have right now? I hope we don't have to find out. I suspect that many people will not like that choice and keep things as they are.


Shouldn’t this be senators job, not really the presidents?

Also, it’s policy proposals like these that are going to push Trump to win in 2020. All the Democrats are suggesting more and more socialist policies, while popular with their base.. is pretty detached from the middle and right side ideologically. People want cheaper products, more money and stability. Focus on that.


You overestimate the public's opinion of large tech companies, and forget that Trump ran to the left of the rest of the Republican primary candidates, not to the right of them.

The only voters that are going to move from voting Democrat to voting Trump over the breakup of big tech are people who work in big tech.


What about breaking free from “Native American Heritage” ?


Ok... but what about big _____ (anything else)?


There's no way you're paying attn to the news and believe she doesn't have plans specific to other industries.


Yes, but it seems intellectually dishonest to go after big tech (where, often, the "product" is free) yet avoid going after -- say -- big telco or big cable or big pharma -- where you come out of a retail store feeling disgusting because you got ripped off so badly.

By ripped off, I dont mean, I over-spent, but rather I was forced into buying something due to having only a single choice, while not even knowing the ultimate price I will pay.

Where I live in the US -- there is ONE and only ONE broadband provider. If you ask for the price, they give you the three month promotion price. If you press them really hard, you get the ultimate non-promotional price. Then you get the bill and there is a "wire fee", "regulatory recovery fee", "line charge" and all manner of all surprise charges that you didn't agree to except in some blank-check-fine-print fashion.

Say what you might about privacy etc, but my immediate, acute pains are with real monopolies like my broadband provider -- not with which free photo sharing app I need to use


It's intellectually dishonest to pretend Warren isn't going after the telcos and pharma too.

Telecom: https://www.wired.com/story/elizabeth-warren-unveils-plan-ex...

Pharma: https://www.vice.com/en_us/article/kzvy4w/elizabeth-warren-i...

Warren's entire shtick is having a plan for pretty much everything.


>Yes, but it seems intellectually dishonest to go after big tech (where, often, the "product" is free) yet avoid going after -- say -- big telco or big cable or big pharma -- where you come out of a retail store feeling disgusting because you got ripped off so badly.

You must be living under a very heavy rock if you don't think she's going after pharma and telco companies. She spent half of the last debate ripping on pharma companies.


She put out her broadband plan last week. The lack of competition in your area of the U.S. must have prevented you from loading this webpage: https://www.wired.com/story/elizabeth-warren-unveils-plan-ex...


I read the entire wired article, the article is about expanding broadband access to areas which dont have broadband. A worthy exercise...but that is different from:

1. Applying her [awesome] CFPB approach to telco where you cant just spring mystery charges post-hoc and hang customers on a contract they didn't agree to.

2. Allowing multiple broadband providers to compete


She also proposes to strike down state laws that prohibit municipal broadband options, and I'm shocked at this point that you're standing by your original comment that she's only regulating Big Tech. https://www.vice.com/en_us/article/mbmjja/elizabeth-warren-p...


1. The CFPB already tackles that. https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes...

2. A number of items that would help with that are included in the article. Changes to utility pole ownership, encouraging municipal broadband alternatives, etc.


Does anyone care about intellectual dishonesty? I mean look what has happened to this country.




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