Don't Break Up Big Tech

The platforms have been brutal to startups. But there’s a simpler fix.

- Jeff Bercovici

This spring, Amazon did something very un-Amazonish. Across many popular product categories, from batteries to baby food, the retail behemoth quietly discontinued aggressive promotions for its private-label brands, which compete with—and in truth are often near-clones of—independent merchants’ products. It was an uncharacteristic retreat for a company that generally loves nothing more than using every weapon in its substantial arsenal to annihilate its rivals.

Call it the Elizabeth Warren effect. Amid growing public wariness of the biggest tech companies and their outsize role in our economy and public life, the Democratic presidential candidate is far from the only politician in her party demanding stiffer regulation. Even President Trump has blasted Amazon as a “no-tax monopoly,” and his Federal Trade Commission is spinning up a tech task force “to ensure consumers benefit from free and fair competition.” Still, it’s Warren’s proposal to break up Google, Apple, Amazon, and Facebook—on the grounds that “they have hurt small businesses and stifled innovation”—that has captured imaginations and newspaper headlines. In Mountain View and Menlo Park, they’re suddenly sweating through their hoodies.

Hence Amazon’s about-face. “They’re trying to get out in front of the issue and defuse any regulatory solution,” says economist Hal Singer of Georgetown University and Economists Incorporated. To Singer, whose work has influenced policy proposals from senators including Mark Warner and Al Franken, it was a hopeful sign.