How would this work in practice though? Eg Amazon. Bezos is a major shareholder. Imagine splitting AWS from the retail arm, which I guess would be a sensible split point. If Bezos controls both, then what would really change?
I'm not critical to the idea nor supportive - I'm just curious to learn more.
That was the case when Standard Oil was broken up and it's not a problem. The retail arm becomes free to get their cloud computing needs from others -- say Azure or Google. Bezos can't force them to get a worse deal at AWS simply because he owns the AWS. A lot of the arguments for breaking up companies come from this. It can make the components more efficient once they're freed from the shackles of being locked in. Likewise, the crappy parts of the big conglomerate can't coast on having a guaranteed customer. This is the whole point of capitalism. Monopolies are the anti-thesis of capitalism.
I don't think it's fair to say the break-up was a failure even if in the near term they still coordinated. In the long term, the oil companies competed with each other. Even if Rockefeller became wealthier, it only adds to the original point: breaking up monopolies unlock value for shareholders and increases efficiency. I highly doubt anyone in the main stream schools of economics would call the Standard Oil breakup a failure. That Rockefeller wasn't punished is immaterial to the breakup itself. The point here isn't to punish Bezos or anyone else. It's about efficiency and fairness. In that sense, that goal was accomplished. No single oil company today wields the power that SO once did.
Also, those guys meeting up together at Rockefeller's house to coordinate would likely be illegal today and probably was back then too.
Did you read her proposal? There would be a structural separation from distribution and first party goods. Just like railroads couldn't own interests in the commodities they were transporting, Amazon couldn't operate a market place and also own private label brands.
So what about Walmart who does double Amazon in revenue AND has their own private label brands? They have so much retail power they are known to get manufacturers by the balls and make manufacturers accept the cost they want instead.
or Costco? $130B in revenue and I dont hear clamor for Costco to be split from Kirkland.
By this logic Apple shouldnt be allowed to have Apps in its App store, right? Or are they banned from selling first and third party phone cases in store?
CVS shouldnt be allowed its own generic drugs.
At what point does this become "companies arent allowed to make/sell their own products if they also resell other companies products."
And lets be serious: you want to take away Google's ability to choose the ranking of results? Thats their entire company's purpose. People go to google because they like the order the results come in. If google starts delivering bad results, that opens opportunity for other companies.
> Warren's team said that the proposal would also apply to Apple. "They would have to structurally separate -- choosing between, for example, running the App Store or offering their own apps,
Walmart isn't a platform (excluding Jet.com). They purchase goods (take on risk) prior to selling them.
Amazon is a marketplace meaning the seller takes on all of the risk and pays Amazon for the privilege. Amazon then uses the data that marketplace generates to undercut the sellers with their private labels.
That sucks because every company that actually cares enough about its customer experience eventually vertically integrates, and it results in a better experience.
For instance, Apple makes hardware, software, services and they all fit together perfectly. Tesla distributes cars in addition to making them, leading to a better buying experience.
Everything Amazon does is in-line with this principle as well.
Is the end game laws similar to what we have for alcoholic beverages and cars? Where distribution and manufacturing are artificially separated?
How would this be applied? I feel like nearly every grocery store chain in the USA has it's own brand competing with same 3rd party brands they carry. Whole Foods had "360", Walgreens has "Nice". It's been too long since I've been to a Safeway, a Lucky's, a Ralph's, etc but it became pretty clear that each one had it's own brand. And let's not forget Trader Joe's which is almost 90% all it's own brand.
Companies with an annual global revenue of $25 billion or more and that offer to the public an online marketplace, an exchange, or a platform for connecting third parties would be designated as "platform utilities." … These companies would be prohibited from owning both the platform utility and any participants on that platform.
Thus Safeway would be exempt from the regulation because (a) they do not offer an online marketplace and (b) they do not connect third parties (but instead act as an intermediary).
Similarly, it appears that only Amazon Marketplace, not the retail arm of Amazon, would be affected by this regulation.
Where is the demonstrated consumer harm that warrants monopoly treatment? Adding private labels increases the amount of selection consumers have.
You’d think we would hear more about it since basically every physical retailer owns their own brands that they sell in their own marketplaces already.
As Elizabeth Warren makes clear in her post, "demonstrated consumer harm" isn't the only justification for antitrust action. We can't demonstrate the innovation that would occur in a competitive marketplace, but we break up monopolies with the faith that it will. This was the prevailing view until the late 20th century. Hopefully we'll get back to it.
> ... legislation that requires large tech platforms to be designated as “Platform Utilities” and broken apart from any participant on that platform.
Companies with an annual global revenue of $25 billion or more and that offer to the public an online marketplace, an exchange, or a platform for connecting third parties would be designated as “platform utilities.”
These companies would be prohibited from owning both the platform utility and any participants on that platform. Platform utilities would be required to meet a standard of fair, reasonable, and nondiscriminatory dealing with users. Platform utilities would not be allowed to transfer or share data with third parties.
I'm not critical to the idea nor supportive - I'm just curious to learn more.