SENATOR ELIZABETH WARREN has unveiled a plan to break up Big Tech by unwinding acquisitions —
As the CEOs of two Boston tech companies, we agree with Warren’s diagnosis that Big Tech requires a new set of rules, but we propose a different remedy.
In our view, attempting to unravel Big Tech companies could have negative consequences for consumers in the short-term, and dam
age US competitive positioning globally in the long term. Not to mention that such a task would be extraordinarily complex, and similar attempts to unravel giant companies have rarely succeeded in actually breaking them apart.
Rather than trying to split up these Big Tech companies, let’s establish and enforce rules for these Internet platforms so that one company’s products and services are not unfairly favored or prioritized over another. The sheer volume of our data that has been collected by Amazon, Google, and Facebook enables these companies to understand us in ways most of us never imagined when we signed up for their services. That data is used to increase the intelligence of their platforms on which they can prioritize their own products and services at the expense of competitors, and this creates an unfair playing field.
Does this remind you of the net neutrality debate? It should. Many of these same Big Tech companies Warren is calling out supported regulations so that a few telecom companies, such as AT&T, Verizon, and Comcast, would not unfairly control access to the communications grid the Internet runs on.
The Internet Association, a trade group representing Amazon, Facebook, Google, and others argued to the Federal Communications Commission that they would be at a disadvantage if they had to negotiate with the telecom companies that controlled the grid to reach the same customers the telecom providers were selling similar services to. It was easy back then for Big Tech to imagine a world where a large telecom provider like Comcast would stream its movies at a faster speed than movies from a smaller competitor like Netflix.
Big Tech’s control of data is analogous to the telecom giant’s control of the communications grid. Think about how much involvement Amazon has on your life now. Yesterday, you might have shopped at Whole Foods for groceries, ordered new Nikes on your laptop, watched The Avengers on your TV, asked Alexa to play Bruno Mars, and, while scanning the latest headlines on your phone, saw unsolicited advertisements for running gear to go with the sneakers you just bought.
One company, Amazon, enabled you to shop, get personalized ads, be entertained, and receive products at home and on your tablet — and that company gathered massive amounts of data about you along the way. For consumers this means any perception of the Internet as an open and fair landscape, in which we all have the same maps and the same ability to wander the paths in a way that is best for us, is misguided. Amazon, Google, and Facebook have tuned vast portions of the Internet landscape to each user based on the data they have collected on us, and to the benefit of their own products and services. While this adds convenience to our lives today, such pervasive control will ultimately limit our freedom and choices.
Antitrust specialist Lina Khan gets it right in her 2017 paper “Amazon’s Antitrust Paradox,” published in the Yale Law Journal: “Allowing firms to amass market power makes it more difficult to meaningfully check that power when it is eventually exercised.”
We agree that it is important to check that power, but breaking them apart will have consequences. These Big Tech companies are the seeding ground for many big ideas, anchors of large ecosystems of companies that employ millions of Americans, and vanguards of our country’s technological leadership. We want these benefits, but we don’t want this to stifle competitors or limit the freedom and choices of the consumer.
Rules that prevent Big Tech from using the outsized amounts of data they have collected on us, their version of the telecom giants’ outsized control of the communications grid, to unfairly advantage their own products and services would be a good place to start — and it’s an approach that has succeeded with other giants such as Microsoft and IBM in the past without breaking them up.
Warren is right that something needs to be done. While we believe Warren’s primary mechanism of undoing prior acquisitions is impractical, we do support her thesis that outsized control of resources leads to unfair and anti-competitive situations, and regulations are necessary.
Mohamad Ali is the CEO of Carbonite, and Mike Baker is the CEO of dataxu.