As Fox News reports, Massachusetts Senator Elizabeth Warren wants to break up Amazon, Google, Facebook, and even Apple. In the view of the 2020 presidential hopeful, these tech companies are just too big and too powerful. The government, she says, can apply the same antitrust principles “applied to railroad companies more than a hundred years ago” but the candidate thinks the Justice Department and FTC are doing “not well for a long time now.” Warren is on to something here.
As we noted last year, Facebook boss Mark Zuckerberg has been careless with personal data but seemed at pains to preserve confidentiality when he was cooperating with government investigators. Zuckerberg was puzzled at the concept of a “neutral forum” and admitted that government had demanded that Facebook remove a page from the site. The Facebook CEO did not indicate the content of the page, which government official had demanded its removal, and when the removal had taken place. So the problems with Facebook have to do with its collaboration with government power. This raises an issue that Warren and other candidates are not onto.
For all their size and revenues, Facebook, Amazon, Google and such cannot compare to the massive power of the federal government. Nobody faces arrest for lying to Facebook. Amazon cannot audit the finances of its customers on a whim, nor suspend the presumption of innocence. Google cannot send armed employees to raid private citizens in their homes at the crack of dawn. For all this power, Warren is not pushing to break up any power centers of government, eliminate any government agency, or reduce government power in any way.
A good place to start would be the Consumer Financial Protection Bureau, a new federal agency, Warren supported. The CFPB was created during a recession, headed by one person, and funded not by Congress but the Federal Reserve. The highly duplicative CFPB is also secretive, partisan, and obstructionist and assumes that Americans are incapable of managing their finances without government assistance. Even so, Republicans or Democrats have made no move to eliminate the agency.
The government brought an antitrust case against Microsoft but seems unconcerned about monopoly power within government. Consider, for example, government monopoly education. Imagine if a consumer chose to buy a product from Amazon but had to send money to Walmart at the same time. Despite mediocrity and failure, government schools get money directly from government. If you send your kids to an independent school, your tax dollars still go to the bureaucracy, so in effect, you pay twice. That government monopoly could stand some breaking up. So Elizabeth Warren is right that the Justice Department and FTC are doing “not well for a long time now.”