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Elizabeth Warren Floats 19th Century Policy For 21st Century Tech Problems

Elizabeth Warren
Elizabeth Warren made headlines last week for her Medium post entitled “Here’s how we can break up Big Tech.” In the piece, Warren laments that Facebook, Amazon, and Google have grown too big, and suggests government must break up the companies to encourage competition.

Warren is clearly trying to position herself as a protector of consumers who is hip to the internet age (WhatsApp! Instagram! A joke about Bing! Hold on, I’m so excited, I’m going to git me a beer!). But when you delve into the details of her plan, you quickly realize that Warren is using 19th century solutions for 21st century problems.

For instance, Warren cites the Microsoft anti-trust case as an example of how to bust monopolies even when the product is free. While there were other issues involved, the central issue in that case was whether Microsoft could bundle its Internet Explorer web browser with its operating software. But nearly 20 years later, as consumers eagerly purchase Apple phones running Apple software that default to Apple’s browser (and Google and Microsoft take similar approaches), it seems pretty clear that the market eventually validated and even expanded upon Microsoft’s approach.

Moreover, it is unclear how Warren plans on breaking up a company like Facebook. Splitting it into two networks would defeat the entire purpose (although it would be appealing to separate the crazed political posters from the single women posting photos of desserts). And you can’t allow third-party developers to access the network. That would eliminate Facebook’s trademark uniformity and bring back the MySpace era, where you would click on someone’s profile and an Avril Lavigne song would start blaring as animated hamsters did everything in their power to trigger an epileptic seizure. MySpace’s permissive customization made social media feel like the heffalumps and woozles scene from Winnie the Pooh.

Warren could plausibly succeed in separating Facebook from Instagram and WhatsApp, but it is unclear what this would accomplish. The services are already free. Perhaps they would start competing on their terms of service, but that seems unlikely given that no user has ever read their terms of service.

Apple Should Also Be Busted Up, Apparently

Warren is not limiting her sights to Facebook, Google, and Amazon. In a subsequent interview, Warren stated that Apple shouldn’t be allowed to sell its apps in its App Store: “It’s got to be one or the other,” she said. “Either they run the platform or they play in the store. They don’t get to do both at the same time.”

Warren no doubt thinks that Apple selling its own apps is a textbook case of a vertically integrated monopoly. But other than the fact that those same textbooks say vertically integrated monopolies are bad, Warren can’t really articulate anything nefarious about the App Store. Sure, Apple is giving consumers its own free map app, but doesn’t prevent anyone from downloading Google Maps––most likely because Apple has to compete at the device level and no one wants a phone that only uses Apple Maps.

One area where Warren does have a point is that it is anti-competitive for Amazon to promote AmazonBasics over similar third-party goods. But while that is unfair, it is not the real issue with Amazon. Fixing it will not stop one-third of all malls from closing, and Warren will not be elected president by waging a war against discounted paper towels.

Yang Makes Warren Look Like a Luddite

The larger problem for Warren is that Democratic candidate Andrew Yang is making her look like a Luddite. Yang, a little-known entrepreneur, is garnering a surprising amount of support on the internet (and jumping to within a percentage point of Warren) for his take on why Amazon is destroying traditional retailers.

While Warren claims that Amazon’s success is due to engaging in monopolistic behavior by acquiring, Yang instead points to the fact that the retailer’s massive warehouse and distribution centers are staffed by robots.  His campaign is sounding the alarm that up to 36 million jobs may be eliminated due to the imminent arrival of robots and self-driving cars and trucks, and is proposing that America institute a “Freedom Dividend” and other transitional programs to help soften the blow for humans whose jobs will inevitably be replaced by machines.

Yang’s rise has similarities to Donald Trump, who was elected in 2016 in large part because he was able to communicate to voters what they already knew: that global trade had killed many American jobs. Now Yang, perhaps presciently, is saying that international trade is immaterial, because “winter is coming” and the real fight is not between U.S. and Chinese workers, but between human workers and robot workers. And we need to prepare ourselves for when the robots inevitably win.

Now there is Warren, who has entered the fray claiming that she is going to fix the modern economy by stopping Apple from putting a flashlight app on its phones. It seems pretty clear why Warren fails to energize her base, because if this is her solution to create jobs, then the only thing that is going to be anti-competitive is her candidacy.