Elizabeth Warren: "Just Wrong" To Call Me A Socialist, "But Markets Have To Have Rules"

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CBS News correspondent Ed O'Keefe sat down with Sen. Elizabeth Warren in Austin, Texas, where Warren made the case to the SXSW conference that big tech companies should be subject to anti-trust regulation.

"The giant tech companies right now are eating up little, tiny businesses, startups-- and competing unfairly," Warren said.

"Can we describe you as a capitalist? What's the best way to describe you?" O'Keefe asked the Democratic presidential candidate.





"I believe in markets. Markets that work. Markets that have a cop on the beat and have real rules and everybody follows them. I believe in a level playing field. And as long as we've got that then we will get the best out of markets because it means the people who come up with great ideas, who work hard are the ones who will prosper, not simply those who were born into wealth," Warren said.

O'Keefe followed up: "So if you get labeled as a socialist?"

"Well it's just wrong," Warren stated.

ED O'KEEFE: Well I wanted to start by asking about your-- the proposal that you've unveiled here in the last few days. And I guess my- my big question is why? Why- why does this have to be done?

SEN. WARREN:: Because the giant tech companies right now are eating up little, tiny businesses, startups-- and competing unfairly. Look at it this way, someone like Amazon runs a platform-- you know the place where you buy your coffee maker and get it delivered in 48 hours and that's great. But in addition to that they're sucking up all that information about every purchase, every sale and every one of the other little businesses that are offering their products on Amazon.

And when Amazon sees one that's profitable they say, "Hmm. Think we'll go into business against them," now that they've got all this extra information. And they put their own business out there to compete on selling coffee makers, put themselves on page one, put the competitor back on page six and the competitor's business is just gone.

So what I'm saying is we've got to break these guys apart. You want to run a platform? That's fine. You don't get to run a whole bunch of the businesses as well. You want to run a business? That's fine. You don't get to run the platform. Think of it this way, it's like in baseball. You can be the umpire or you can own one of the teams, but you don't get to be the umpire and own the teams.

ED O'KEEFE: And let me just get this clear, if you had your way Facebook would have to sell off Instagram. Amazon would have to sell off Whole Foods.

SEN. WARREN:: All those little businesses that they're running, competing businesses. Yup.

ED O'KEEFE: I-- who- who is the federal government to tell these companies they have to do that?

SEN. WARREN:: There's antitrust law, that's been around for more than 100 years. And the federal government has done this many times. For example broke up Standard Oil, broke up the- the great monopolies of the late 19th century and early 20th century. And the reason for that is so that we can keep a competitive economy.

You know, I think of it this way: I like markets. I think markets produce a lot of good. But markets have to have rules and so when everybody starts out, think of it like a plowed field. You know, everybody starts out, they plant their seeds, they make it go. That's great as long as everybody's competing. But when one gets so big that it means nobody else gets a chance to compete-- including no consumer gets any more choice, then we got a problem. And that's what antitrust laws are for.

ED O'KEEFE: You can imagine, and you know, that this idea has gotten a lot of criticism.

SEN. WARREN:: From?

ED O'KEEFE: Well we've spoken-- we spoke, for example, to Howard Schultz.

SEN. WARREN:: Yeah.

ED O'KEEFE: The guy who's thinking about running as an independent.

SEN. WARREN: A billionaire, right?

ED O'KEEFE: Yes. And he- he suggested that your proposal is quote, "inconsistent with our free enterprise system," and said that it's "emblematic of Democrats proposing," his words, "fantasy ideas that will never be implemented," and that instead perhaps you could just find ways to discuss with these companies ways to make it more competitive.

SEN. WARREN:: You mean we could ask these multi-billion dollar companies nicely if they would not eat up the competition and just behave better in the marketplace. Really? We've had laws around against antitrust activity and predatory pricing for over a hundred years because we understand that the way markets work are when there's real competition in that market. Look at Facebook for example. You know I don't know about you but there are a lot of people who said, "I don't like how Facebook handles privacy, right? They're sucking up all my information and my kid's information." So along comes WhatsApp.

And WhatsApp says, "Tell you what we're going to offer what we think is a better product and we're going to give you a lot better privacy." Now, Facebook had two choices at that point. Facebook could have said, "Dang maybe what we better do is make our company better, compete more aggressively, see what people want on privacy. Or we could use the fact that we are a multi-bazillion dollar corporation and just stomp out the competition." They bought the competition and now they're sucking the data out of the competition.

ED O'KEEFE: But now they're also potentially shifting towards a more privacy focused business model.

SEN. WARREN:: Maybe. If that's what they decide, do you actually believe them?

ED O'KEEFE: We'll see.

SEN. WARREN: Well we'll see? No, it's not good enough to say, "We'll see." That's my privacy. That's my children's privacy. This is not about, "We'll see." This is about markets don't need a "Gee and we'll hope you will obey." It's you put a cop on the beat. The way markets work is they have to have rules and they have to have a cop to enforce them. A market without rules is theft and I'm not in favor of theft. I'm in favor of markets that produce real competition.

ED O'KEEFE: And you know that this kind of proposal feeds into the arguments that Republicans were making to label Democrats as anti-capitalist adopting these socialist ideas. What's your- what's your response to that charge?

SEN. WARREN: You know-- look, they can say whatever they think is going to help them along. But the reality is it is not capitalism to have one giant that comes in and dominates, a monopolist that dominates a market. What I have supported all the way through are the kinds of things that help level the playing field. So, for example I think we should have an ultra millionaire's wealth tax because right now the top one tenth of 1 percent will pay, this year all in on all their taxes, about 3.4 percent of their net wealth in taxes. The 99.9 percent will pay about 7.4 percent of all their wealth. So I think a level playing field says that the big guys have to pay kind of like everybody else does and they have to pay to help create some opportunities because after all, those great fortunes in America that people built, worked hard, had great ideas are inherited. Those great fortunes were built here in America with workers that all of us paid to educate, with their goods got to market on roads and bridges that all of us helped to build. They were protected in their factories by firefighters and police officers that all of us helped to support. So what we're really saying is look, just put a little bit back in the kiddy. This is what we're asking for. Pay a fair share, so the next kid has a chance to build something great and the kid after that and the kid after that.

ED O'KEEFE: But you know you're getting labeled and you're getting coupled in with a few of your other Democratic contenders as someone who supports socialist ideas. Can we describe you as a capitalist? What's the best way to describe you?

SEN. WARREN: I believe in markets. Markets that work. Markets that have a cop on the beat and have real rules and everybody follows them. I believe in a level playing field. And as long as we've got that then we will get the best out of markets because it means the people who come up with great ideas, who work hard are the ones who will prosper, not simply those who were born into wealth.

ED O'KEEFE: So if you get labeled as a socialist--

SEN. WARREN: Well it's just wrong.

ED O'KEEFE: Silicon Valley has obviously been a reliable source of democratic financial support especially in recent cycles. Given this proposal, are you going to decline financial support from tech executives or tech employees if they decide to give to your campaign?

SEN. WARREN: Look, nobody has been beating down the door. But let me be clear I'm not in Washington to work for billionaires. I'm in Washington to help level the playing field so that everybody gets a chance to get out there and compete. We were just outside here in Austin at this conference and I'm talking to all these young tech ent- entrepreneurs who just want a chance to get in the game. Right now with giants like Amazon and- and Google and Facebook, do you know how venture capitals talk about the space around them? They call it the kill zone because they don't want to fund businesses in that space because they know Amazon will eat them up, Facebook will eat them up, Google will eat them up. We need a chance for every one of the young people in that room to thrive, to get their idea out there and if it turns out to be the next Google, good for them.

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