U.S. Senator proposes rules to break up big tech companies

The American Senator Elizabeth Warren has proposed new rules for the tech industry, which would require major players like Google to split off important parts of their companies. That’s what Silicon Angle reports.

According to the proposed rules, tech companies that manage online platforms as app stores and generate more than 25 billion dollars in annual sales will be classified as ‘platform utilities’. Warren, also a presidential candidate for the Democrats in 2020, wants to prevent tech giants from selling their own apps, merchandise and other services and products on the platforms they manage themselves.

As a result, for example, Amazon would no longer be able to sell Amazon branded products through its marketplace. Google should split up its advertising and search departments, by making a separate company of one of the two.

New rules are also needed on the relationship between tech giants and their users. “Platform utilities should adhere to a standard of fair, reasonable and non-discriminatory interaction with users. They are also not allowed to send or share data with third parties”, says Warren.

These rules should also apply to smaller technology companies with a turnover of between 90 million and 25 billion dollars. Such companies are allowed to sell their own products on their platforms.

Acquisitions

The second major objective of the plan is to set up a legislative mechanism to ‘eliminate non-competitive mergers’. Warren described a number of specific acquisitions, including the acquisition of WhatsApp by Facebook, the acquisition of Nest by Google and the acquisition of Whole Foods by Amazon.

“Lifting these mergers will promote healthy competition in the marketplace, putting pressure on large tech companies to better deal with user concerns, including those about privacy,” says the senator.

A number of observers from the tech industry are critical of Warren’s proposal. They say it’s badly thought out and lacks certain points. Some also wonder why it focuses on companies that have grown mainly because of the popularity of their services, rather than a lack of choice. The critics argue that monopolies and semi-monopolies as internet providers are a better target.