- Sen. Elizabeth Warren on Friday announced a new plan to use existing and new antitrust measures to break up large tech firms.
- As part of her proposal, Warren said she would use competition laws to keep marketplace operators from also selling directly to customers.
- Amazon‘s marketplace is one of the most successful parts of its online retail strategy, accounting for more than half of sales on its website.
- Warren has made similar comments before.
Sen. Elizabeth Warren is gearing up to fight big tech.
The Massachusetts Democrat who is running for president in 2020 on Friday announced a plan to use new and existing antitrust measures to break up large tech firms, reverse mergers, and decouple platforms. She explicitly named Google, Facebook, and Amazon in an open letter published on Medium titled “Here’s how we can break up Big Tech.”
Warren outlined a plan to use new and existing laws to achieve these goals. The proposal includes passing legislation that would outlaw companies from competing on the platforms they manage. Companies with at least $US25 billion in global annual revenue that “offer to the public an online marketplace, an exchange, or a platform for connecting third parties” would be called “platform utilities” under Warren’s proposal.
“These companies would be prohibited from owning both the platform utility and any participants on that platform,” Warren writes.
“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.”
Warren explicitly named Amazon and its marketplace platform, saying Amazon could use the data it gathers from selling other companies’ products to create its own private-label products, ultimately running smaller companies out of business.
She writes that under her proposal, “Amazon Marketplace and Basics” would “be split apart.”
Amazon did not respond to Business Insider’s request for comment on Warren’s proposal.
Amazon’s marketplace business has been outpacing Amazon’s direct sales for years. The sector now accounts for more than half of Amazon’s total sales on its website.
The online retailer isn’t the only one that operates a marketplace while directly selling goods. Walmart also has a similar model.
And, this isn’t the first time Warren has talked about splitting up third-party marketplace platforms from companies that sell directly to customers.
Speaking with The New York Times’ Andrew Ross Sorkin in September, Warren criticised Amazon for the fact that it is both a marketplace – essentially, a platform for other sellers – and a direct retailer.
Warren said that, ultimately, Amazon should not be in both businesses.
“You got to pick one business or the other, baby,” Warren said. “You want to be a competitor, be a competitor. That’s great. You want to be the platform provider that is a different function. If you’re getting a huge competitive advantage from being a platform provider because of all this information you keep scraping off, then we no longer have competition going on.”
- Read more on Elizabeth Warren’s proposal:
- Elizabeth Warren says she wants to break up big tech companies including Amazon, Google, and Facebook
- Elizabeth Warren’s plan to break up tech giants would force Amazon to roll back its acquisition of Whole Foods
- Elizabeth Warren’s plan to regulate tech giants would force Facebook to break up with WhatsApp and Instagram
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