Warren Says Breaking Up Tech Giants Will Keep Market Competitive

(Bloomberg) -- Democratic presidential hopeful Elizabeth Warren said breaking up giant tech companies would “keep the marketplace competitive,” during an appearance at one of the biggest technology events in the U.S.

The Massachusetts senator spoke Saturday at the annual South by Southwest cultural festival in Austin, Texas, a day after proposing to take steps to break up companies like Facebook Inc. and Alphabet Co.’s Google if she’s elected.

On Friday she called for legislation that would designate large technology companies as “platform utilities,” and for the appointment of regulators who’d unwind technology mergers that undermine competition and harm innovation and small businesses.

“The idea behind this is for the people in this room,” for tech entrepreneurs who want to try out “that new idea,” Warren told a packed and enthusiastic crowd. “We want to keep that marketplace competitive and not let a giant who has an incredible competitive advantage snuff that out.”

Warren said venture capital “in this area” has dropped by about 20 percent because of a perceived uneven playing field. She didn’t provide more detail or say where she obtained her figures.

Trust-Busting Teddy

Warren outlined her plan in a Medium post on Friday, saying the very success of companies like Amazon and Google “highlights why the government must break up monopolies and promote competitive markets.”

Referring to previous eras of U.S. monopoly bust-ups, Warren, 69, said that what’s new is old: when someone gets excessive market dominance, they start to destroy the market competition. In fact, she named Republican Theodore Roosevelt as her favorite president, adding, “Come on, the trust buster!”

Senator Amy Klobuchar, who announced her 2020 bid last month, spoke in Austin earlier on Saturday. The Minnesota lawmaker is the top Democrat on the Senate’s antitrust panel. She stopped short of endorsing a breakup of large technology companies.

‘Cool’ Antitrust

Asked if the likes of Google, Facebook or Amazon.com Inc. should be split, Klobuchar said she would first want an investigation. While vowing to make antitrust “cool again,” she suggested a more measured approach.

“We are going to be able to have a better discussion of this framed in a way around things like pharma pricing and data privacy, which is going to make it more bite sized and doable for an election,” Klobuchar said.

SXSW, as the festival is known, is the biggest gathering so far for the Democrats -- and a few Republicans -- running in 2020 or otherwise part of the political scene.

The conference has evolved into one of the country’s defining cultural events, combining music and film festivals with showcases for technology and politics. This year, it’s an ideal venue for presidential aspirants to test their message with one of their core audiences: millennials and post-millennials.

Youth Vote

Nikhil Patel and Ana Boyer showed up at Austin City Limits Live theater two hours early to get in line for Klobuchar. Patel, 21, graduated from University of California Berkeley in December with a computer science degree, and has a job lined up at Google.

He’s following the presidential candidates closely and read Warren’s proposal with interest. When it comes to her concerns that tech companies have become too powerful, “I don’t necessarily disagree,” he said, sitting on a concrete curb outside the theater. “Tech companies are wielding pretty disproportionate power.’’

Still, labeling the companies as utilities -- like electric companies -- and approaching oversight from that angle would be “excessive,” he said.

Boyer, a senior psychology major at Washington University in St. Louis, said breaking up the companies isn’t too far-fetched.

“The issue I have with the large tech companies is how much information they have about people,” she said. She’s concerned about the companies expanding into the health-care space “and how much control they would have over health-care data about people.”

Boyer’s not convinced politicians will get it right, though. “A lot of young people feel like politicians don’t really understand the tech industry,” she said.

©2019 Bloomberg L.P.