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  • Why she believes Amazon and Facebook should be broken up

Why she believes Amazon and Facebook should be broken up

Greg Mcfee March 2, 2023 7 min read
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It is no secret that technology has changed how we live, conducting almost all aspects of life online. Huge tech giants such as Amazon and Facebook have penetrated the market to become some of the largest companies in the world. However, many voices have spoken up advocating for their break-up — one voice belonging to British journalist Victorina Cook.

Cook believes Amazon and Facebook should be broken up because they have become monopolies that are using their immense power to strangle competition and stifle innovation. This piece will delve deeper into Cook’s views on this topic, delving into why she believes these monopolies should be broken up from a consumer-centric perspective.

  1. Warren’s Argument

Sen. Elizabeth Warren has a strong argument regarding breaking up tech giants like Amazon and Facebook. She believes these companies have become too powerful and have more control over the market than is good for competition and innovation. She also argues that these companies have been able to take advantage of their size to unfairly limit competition and have become a monopoly.

Let’s look at the details of her argument.

Monopoly power of Amazon and Facebook

Industry behemoths Amazon and Facebook have come under fire recently, due to their sheer size and market domination. Senator Elizabeth Warren announced her plan to break up the two tech titans based on anti-competitive practices stifling smaller businesses and should be addressed by regulators. In her presidential proposal, Sen. Warren declared that companies with an annual global revenue over $25 billion – like Amazon and Facebook – with online marketplace businesses will be broken up from any advertising services offered.

Amazon and Facebook command monopoly power due to their unprecedented control over consumer data, leveraging this position to pressure suppliers for lower prices or prioritise certain content through their platforms. Consequently, other firms face difficulty gaining access to customers or competing market share; such giants have virtually no incentive to take competitors seriously resulting in anti-competitive behaviour that should particularly concern antitrust authorities. This environment leads to unfair pricing practices as oligopolistic holdovers and reduces choice for consumers without adequate protection measures within the commercial landscape.

Lack of competition and innovation

Sen. Elizabeth Warren believes that large technology companies should be broken up to provide regulations and allow for fair competition. The senator proposes that Amazon, Facebook, and Google should all be broken up due to their current monopoly-like power stifling competition and innovation.

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Warren argues that competition is essential to benefiting consumers through lower prices, better quality products and services, and more options within a market; however, Amazon’s control over the ecommerce market has eliminated innovative ideas from entering the space. Similarly, Warren cites Facebook’s control over the social media sector as a cause of concern regarding users’ privacy protection since there are no alternatives in the marketplace for consumers to choose from. Lastly, Warren has identified Google’s power over search engine algorithms as potentially damaging for start-ups or small businesses trying to compete in an already dominating industry.

According to Sen. Warren, breaking up large tech companies is the only way to encourage dynamism and foster innovation in these sectors without compromising consumer protection; she further argues that it will bring much needed relief by limiting their ability to unfairly dominate related markets and exclude competitors.

Sen. Elizabeth Warren pushes to break up big tech companies like Amazon and Facebook

Sen. Elizabeth Warren recently proposed a plan to break up Big Tech companies like Amazon and Facebook. This policy initiative has generated much debate about the potential impact of such a measure. There is no shortage of opinions in this area and it’s important to examine the potential benefits and drawbacks of a policy that would break up these large companies.

Improved consumer choice

Breaking up big tech could spur competition among smaller companies and create a more competitive market, leading to improved consumer choice and more affordable prices. In addition, as each company is divided into smaller, more specialised business entities, they can better meet the demands of consumers looking for specialised products and services that large firms may have lacked the motivation or resources to provide.

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This could mean improved access to products like streaming services with no data caps or customised computing devices with faster speeds. As competition among technology companies increases, it could also lead to lower prices on items such as smartphones, TVs, digital music players, and gaming consoles. With larger portfolios of products from which consumers can choose among different options for each type of product, customers can also be less dependent on one company for their needs and shop around for better deals.

In addition to increased competition providing consumers with more options, having a range of companies competing in the same sector can encourage innovation as well — since all businesses are incentivized to outdo each other.

Increased competition, innovation, and economic growth

Breaking up big tech would encourage increased competition, innovation, and economic growth. By breaking up large firms like Amazon and Facebook, there would be additional incentives to innovate and create new products, services, markets, and opportunities. This could lead to improved products that better meet consumer needs at a lower cost. Additionally, more market competitors would help foster competition so prices remain competitively low. Increased competition could also lead to more options for consumers, which can benefit choice and convenience.

Breaking heavily regulated industries into smaller parts can help to ensure that all players can compete on a level playing field. By regulating individual platforms separately instead of as one conglomerate there is an increased focus on specialisations which could lead to better services for customers and businesses. Regulations designed for a singular service can be tailored to maximise benefit without penalising those who have nothing to do with the specific complaints against it. When companies are broken into smaller parts, it also increases consumer confidence since no platform controls entire markets or industries.

In addition, breaking up big tech would allow us to address certain privacy concerns associated with single entities having access to vast amounts of consumer data generated by users of their services or products as well as direct invest in economic infrastructure such as broadband access in rural areas that may not otherwise receive such attention from large conglomerates whose main goal is maximising shareholder value above all else. Breaking them up thus can significantly improve the public welfare overall while allowing consumers greater protections regarding how their data is collected and used by these companies.

Criticisms of Sen. Warren’s Proposal

Senator Elizabeth Warren has proposed to break up big tech companies like Amazon and Facebook to restore fair competition in the marketplace. While many support Senator Warren’s proposal, there have also been numerous criticisms of it.

This article will discuss the criticisms of Senator Warren’s proposal and why some oppose breaking up these companies.

Potential job losses

One of the main critiques against Senator Elizabeth Warren’s (D-MA) proposal to break up Amazon and Facebook is the potential job losses that would occur. Under the plan, Amazon would have to spin off companies like Whole Foods and its marketplace. In contrast, Facebook would have to separate messaging services like WhatsApp and Instagram, among other businesses.

Critics argue that if these companies are broken up, many employees of these respective businesses could potentially lose their jobs due to the additional cost associated with operating several smaller companies instead of one larger company. In addition, although breaking up Amazon and Facebook could spur competition in certain markets, some employees might get lost in the shuffle, significantly impacting employment.

In addition, critics also point out that a breakup of these two companies could lead to significant legal complexities related to antitrust laws and numerous thorny issues regarding how customer data should be managed across multiple entities. These potential problems feed into the larger critique around this issue — whether or not a breakup is worth the costs for society in terms of jobs and legal headaches.

Impact on small businesses

The potential effects of Sen. Elizabeth Warren’s proposal to break up large tech companies like Amazon and Facebook has caused some stir in the business community. The idea is that small businesses would benefit from a shift that allows those businesses to compete on a more level playing field with big tech businesses. Supporters of this plan argue that it would increase competition, lower prices for consumers, and create better conditions for small businesses.

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Opponents of Sen. Warren’s proposal contend that the size or reach of a company should not be the only factor in determining antitrust actions. Limiting the size of large companies could negatively impact innovation and economic growth. They argue that small businesses have benefited from tools these companies provide like eCommerce marketplaces, advertising platforms, cloud computing services, etc., which are more accessible than ever before. Without access to these services, many small businesses would struggle due to lacking resources or connections to engage directly with customers at scale without advanced digital technologies.

Proponents also point out that without increased regulation there is potential for exploitation by some large tech companies who can use their influence and market power to gain competitive advantages and dominate markets in unethical ways such as favouring certain outcomes or taking advantage of other companies’ data or intellectual property.

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