Potential vice-president and Wall Street critic Elizabeth Warren has accused tech giants Apple, Amazon and Google of undermining competition and using their political clout to kill off efforts to place limits on them.
She cited a number of industries including Wall Street, the airline industry, cable companies, healthcare and livestock and pointed out that there are fewer companies in each, leading to less competition and record profits at the cost of consumer choice.
It was the tech industry, however, that bore the brunt of her criticism.
"The second reason the decline in competition should cause concern is that big guys can lock out smaller guys and newer guys," she said. "Take a look at the technology sector – specifically, the battle between large platforms and small tech companies."
She names names: "Google, Apple, and Amazon in many cases compete with those same small companies, so that the platform can become a tool to snuff out competition."
And she gives examples:
- Google promoting its own services ahead of competitors'
- Apple pushing its music streaming services while putting restrictions on competitors'
- Amazon pushing its own products and screwing anyone who competes with it
"Google, Apple and Amazon have created disruptive technologies that changed the world, and every day they deliver enormously valuable products," she notes. "They deserve to be highly profitable and successful. But the opportunity to compete must remain open for new entrants and smaller competitors that want their chance to change the world again."
She also highlights that with huge profits comes power. "Concentrated markets create concentrated political power. The larger and more economically powerful these companies get, the more resources they can bring to bear on lobbying government to change the rules to benefit exactly the companies that are doing the lobbying."
She notes that FTC staff said they had found sufficient evidence of Google fixing the market for a formal investigation, but were overruled by the regulator's politically placed Commissioners. She said that the FTC is currently investigating Apple for possible anti-trust activities, and that Amazon has faced similar charges. The implication is that the regulators are not doing their job properly because of political pressure.
"Over time, this means a closed, self-perpetuating, rigged system – a playing field that lavishes favors on the big guys, hammers the small guys, and fuels even more concentration," she warns.
As for the solution, Senator Warren suggests several ways in which the president could resolve the concentration of power:
- Say no to anti-competitive mergers
- Pay closer attention to vertical mergers
- Require all federal agencies to promote market competition and appoint heads who will do so
"Strong Executive leadership could revive antitrust enforcement in this country and begin, once again, to fight back against dominant market power and overwhelming political power," she pitches.
The speech should be viewed in several contexts.
First, Warren is a possible vice-president pick for Hillary Clinton. Even though Wall Street is bitterly opposed to her being on the Democratic ticket, it makes a certain amount of political sense. Warren is loved by the wing of the Democratic party that dislikes Clinton; she is a very effective fighter and has recently torn strips off Donald Trump in a series of speeches; and she would mean a two-woman ticket, which could bring in a lot of female voters.
As such, her speech currently holds a little more sway than would normally be the case and, in many respects, is her laying out an uncompromising position for Clinton to either accept or deny.
The speech is also an intriguing counterpoint to Hillary Clinton's courting of Silicon Valley. This week Clinton published her tech policy white paper, which was very pro-tech, and in some respects too bent toward the prevailing ideas in the Valley. Clinton is very keen to gain the support of Facebook, Google and so on – as well as their executives' cash.
Whether Warren's speech will cause Clinton to drop the idea of having her as her VP, or to set up a good-cop-bad-cop scenario, only time will tell. ®