Sen. Elizabeth Warren: Apple Should Not Be Allowed To Sell Apps And Also Own App Store


During an interview Wednesday morning on MSNBC's "Morning Joe," Sen. Elizabeth Warren discussed her call to break up big tech companies like Amazon, Facebook, Apple, and Google.

WILLIE GEIST, MSNBC: I want to ask you about your Medium post last week where you talked about the break up of big tech, "It's time to break up Amazon, Google and Facebook." I think your argument was a little bit more nuanced than the headline. Can you explain what you meant there?

SEN. ELIZABETH WARREN: Sure. let's use Amazon. They run two kinds of businesses. One, it runs a platform. That's the place where all the small businesses come and they trade and they buy and sell. Amazon runs that platform but also sucks out tons of information from every single transaction. It then uses that information that nobody else is privy to look out and say, "Oh, there's a profitable business. We think we'll go into competition with them." So, it then puts out a product in competition with the pet pillow sales guy and moves the profitable business back to page 6 and puts Amazon right at the front, Amazon's own business.

So, the way I see this, it's a little like baseball. We'll use a baseball analogy here. You can be the umpire, that's the platform, or you can have a team in the game, that's running these individual businesses that meet on the platform. But, you don't get to do both simultaneously. I think they ought to be broken apart.

GEIST: Another way to explain that too, is take Apple. obviously, a very popular company. it has an app store. do you believe apple should be able to sell its own apps on the app store?

WARREN: It needs to do one or the other. Either it runs the platform, the app store, or it is selling its own products on the app store, but doesn't do both simultaneously because whenever it does, it has this enormous competitive wipes out all the other little businesses. In fact, did you know, Willie, it's now referred to, this zone around folks like Apple and Google and Amazon, anyone that moves into the competition space, it's called the "kill zone." Venture capitalists are investing about 20% less than they used to on these start-up companies because they know if they go into the kill zone, one of two things will happen. They will either get gobbled up by the giant or wiped out by the giant but they won't have a chance to grow and develop into what they might have been.

GEIST: So, do you believe that Google, Amazon and Facebook are all monopolies by your definition?

WARREN: Oh, I -- let's put it this way, they are huge, they have market dominance and they behave like monopolists. And that’s a big part of the reason they need to be broken apart. Look at -- look at what happened with Facebook. I don’t know about you, but a lot of people are really uneasy about how Facebook handles their data.

So along comes WhatsApp. Right? And WhatsApp gives a whole lot better protection for your privacy, and you watch a whole bunch of people move over from Facebook to WhatsApp. That puts Facebook in the position of doing one of two things. either they have to get better to meet the competition, that's what a good robust market is all about, or they, if you're already huge and dominate the field, just buy the competition and take their data. Facebook, of course, did the latter. They shouldn't be allowed to do that. That's not furthering competition.

I believe in markets, but it is when markets have rules, have a cop on the beat to make sure the giants aren't gobbling up everyone else and eliminating competition. That's when markets work.

GEIST: So would you have worked to stop, in 2012, Facebook's purchase of Instagram.

WARREN: Yes, and we can go back and still do it. It’s possible to go back under antitrust laws and to say, look, we let this merger go through. Often the mergers are on conditions, conditional that they are not going to do this or they're not going to do that. But let the merger go through. And look at it and say, it turns out it has anti-competitive effects. And if it has anti-competitive effects then we can go back and unwind these and break these pieces apart.

Understand, for anybody who still wants to go on Facebook and check out their old college roommates, or anybody who still wants to go to Amazon and price out 46 coffee makers and get the one that can be delivered in 24 hours, or anybody who wants to go on Google and check out the capital of North Dakota, that will also still be possible.

The platforms will still be there. What will be different is that the companies that are selling on those platforms will be in a real marketplace where they compete straight up, based on price and service and quality of goods, not having the platform owner able to come in and have this enormous advantage to be able to scoop up all the business and kill off the little businesses, the entrepreneurs, and the start-ups.

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