Breaking Up the Tech Giants is a Bad Idea

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Thursday, March 21, 2019


Democratic socialist and presidential candidate Elizabeth Warren recently stated that, if elected president, she would put forth a resolution to break up the tech giants. The four major companies she’s referencing are Amazon, Apple, Facebook, and Google. She has stated that these four companies “bulldozed competition, used our private information for profit, and tilted the playing field against everyone else” and that she hopes to make “big, structural changes to the tech sector to promote more competition.”

She claims that the market domination achieved by these four tech giants is comparable to the monopolization of railroads in the 19th century, saying that “[I]t was the very fact of that political power that caused Teddy Roosevelt to say I’m going to be a trust buster. Man, I’d like to have that guy at my side.” When President Roosevelt formed the Progressive Party, he attacked railroad monopolies by issuing antitrust laws in the name of a free market. This has been an ongoing debate for over a century now, and there is a lot you should know about Senator Warren’s proposal and her intentions behind them.

Before we go into the reasons why breaking up the tech giants is a bad idea, we should also consider her intentions behind this proposal. To do so, we must examine the key differences between Teddy Roosevelt and Elizabeth Warren.

President Roosevelt, despite his antitrust laws, was still a free-market capitalist. He simply understood that monopolies put a strain on free market economies and should be controlled. Senator Warren, on the other hand, is a self-proclaimed democratic socialist who is not supportive of free-market capitalism. It would be inaccurate to suggest that Sen. Warren has the free market’s best interest in mind, given the worldview she has and the policies she has supported. 

As for the first flaw in her logic, being a “trust buster” doesn’t mean limiting companies to only participate in one field or make one type of product only. The example she used was Apple, saying, “[Y]ou’ve got to break it apart from their App Store. Either they run the platform, or they play in the store. They don’t get to do both at the same time.”

It is one thing to try and minimize the extent to which companies can dominate a market, but it is another thing entirely to say that entrepreneurs can only specialize in one thing or one product. If a company can make several products that appeal to the public, they shouldn’t be broken up unless or until they become a monopoly.

What makes her logic even more questionable is that the only sort of company she is targeting are “companies with an annual global revenue of $25 billion or more” that “offer to the public an online marketplace, an exchange, or a platform for connecting third parties.” Targeting companies based on a subjective sense of how much money is “too much money” is dangerous territory that the United States government shouldn’t be entering.    

Another one of the inherent flaws in her logic pertains to job creation. Breaking up tech giants would more than likely result in thousands of employees losing their jobs, the company losing value over time, and the executives getting richer anyway. This exact scenario occurred in the 1990s when Microsoft was targeted as a monopoly, which Sen. Warren has referenced.

Some would argue that the jobs lost by Apple, Amazon, Google, and Facebook would resurface again in arising smaller tech companies once the market was freed. This is actually a fair argument, although the smaller companies would likely not be able to afford the employment and healthcare benefits that many of the larger companies already offer. Not to mention, breaking up the current companies would only hinder their own ability to provide those same benefits.

Breaking up tech giants would also unintentionally (or possibly intentionally who’s to say) harm small businesses who use their products to increase productivity. Countless businesses, many who have nothing to do with technology production even, rely on products and services such as Gmail, Waze, Facebook, iCloud, Amazon’s two-day delivery, and others in order to conduct business. Hurting the companies who make those products would also hurt the little guys who rely on those products for commercial use.

Overall, Elizabeth Warren’s proposal to break up the tech giants is fatally flawed. A better solution to this problem could actually be former Starbucks CEO Howard Schultz’s idea. He states that it is in the country’s best interest to encourage businesses to act more ethically by giving tax breaks to companies who provide healthcare and education benefits to their employees. His message seems to be more optimistic and feasible than Sen. Warren’s. Rather than aiming to hurt companies, encourage them to act ethically for the betterment of everyone including the employees and consumers.

Jackie Watson attends College of the Canyons and currently works for the California Republican Party. She is also a contributor to two other news outlets, Right Outlook and The Liberty Eagle. She is outspoken in her political views and campaigns for suitable candidates.

The views expressed in this article are the opinion of the author and do not necessarily reflect those of Lone Conservative staff.


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About Jacqueline Watson

College of the Canyons

Jackie Watson attends College of the Canyons and currently works for the California Republican Party. She is also a contributor to two other news outlets, Right Outlook and The Liberty Eagle. She is outspoken in her political views and campaigns for suitable candidates.

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