ICYMI: In Keynote Speech, Warren Urges Stronger Antitrust Enforcement to Break Up Big Tech Companies

Hello, RemedyFest! I’m glad to have the chance to talk with you about the next frontiers in competition policy. But to understand where we can go, we need to think about where we’ve come from and understand the momentum we’ve built.

Let’s go back eight years—to 2016. At that point, antitrust enforcement was basically dead. Instead of vibrant, competitive markets, giants dominated. In the preceding two decades, consolidation had increased in more than 75 percent of American industries. Banks. Airlines. Retail sales. Construction. Agriculture. Health insurance. Hog processing. Corporate concentration dominated pretty much every area of American life. The big guys weren’t advancing innovation, helping workers, or benefitting consumers, but they sure as heck were more profitable.

That state of affairs was okay with CEOs and Wall Street movers and shakers who made money off consolidation, and no one else paid much attention. But a handful of us—some in this room—said ENOUGH. We believed we could bring the competition movement back to life. We picked a fight, and that fight mattered. We pushed and pushed and pushed some more. And eventually green shoots started popping up in all kinds of places. Congressional Investigations. Proposed legislation. Calling out corporate greed and connecting the dots between concentration and price gouging.

We got this going, you kept it going, and now we have a movement.

Once he was elected President, Joe Biden had the space to make antitrust a priority. He issued an

Executive Order to kick off pro-competition actions in more than dozen federal agencies. And he hired the right team. Personnel is policy! Lina Khan and Jonathan Kanter shifted the paradigm on antitrust. They brought blockbuster cases, including DOJ’s lawsuit against Google and the FTC’s case against Amazon.

Those changes have echoed around the world. Australia and Canada adopted legislation to stop Facebook’s exploitation of local journalists. The European Union adopted the Digital Markets Act and the Digital Services Act. And the UK’s competition authority challenged numerous tech mergers, like Microsoft’s bid to acquire Activision. The results of this movement are starting to show up. Between 2021 and 2023, transactions valued over $5 billion fell by 60 percent. The Fifth Circuit agreed with the FTC on the need to unwind harmful vertical mergers. Judges are openly considering whether to break up some of the biggest tech giants. Sixty-seven percent of Americans now believe it’s a bad thing for a single company to dominate a market and 69 percent support antitrust laws.

That’s a lot of change in a short time. And here’s the best part: We’re just getting started. We’ve passed the tender green shoots. Now we’re entering a new phase where antitrust enforcers start winning, and industry giants are spending even more money on lobbyists, lawyers, and PR flaks to try to regain control.

There’s plenty of howling in nearly every industry, but Big Tech is running a play borrowed from the financial industry. In the wake of the 2008 financial crisis, I talked about how the titans of the financial sector built a “complexity machine” to dodge oversight.

First, Wall Street sold the public “very complex” financial instruments they said only Wall Streeters could understand, and they used that complexity to hide the risks and make money hand over first. Once they blew up the economy and got bailed out, and Congress tried to put meaningful rules in place, the Wall Streeters fought us every inch of way, claiming the markets were too complex to regulate and changes should be put off indefinitely.

Now Big Tech is cranking up the same complexity machine.

Google’s former CEO Eric Schmidt asked Congress for billions in taxpayer dollars for AI — then turned around and said, “there’s no way a non-industry person can understand what is possible” and “there’s no one in the government who can get it right.” Translation: it’s too complex for you dummies to understand and too complex for government to regulate. OpenAI’s CEO Sam Altman agreed, comparing the risk of AI to “pandemics and nuclear war,” then claiming efforts to address those risks are “over-regulating.” Too complex to understand, and too complex to regulate. Back in 2010, I pointed out that for the big banks “complexity works for them, and it works against those who end up paying.”

But unlike in the 2010 bank crisis, we already have many effective tools in the toolbox. Sure, there are places that need updating, but the antitrust laws of the 19th and 20th centuries gave us the basic weapons to fight concentration. We should pick them up and use them right now.

This is RemedyFest, so let’s talk remedies! I see four very shiny tools we can use to promote competition in the tech world:

First, break up the giants.

Second, block vertical integration.

Third, end merger conditions.

Fourth, require interoperability and data portability.

So let’s start with the big tool: break up monopolies. The polite term is structural separation – that is, separating a monopoly into multiple lines of business. We’ve done it in the past, and the results have been more competition, fewer conflicts of interest, less concentration of power, and markets that are truly open to innovation. And notice how sharp that tool is: Our antitrust laws explicitly allow enforcers to unwind a harmful merger even years after the fact as a remedy or unlawful behavior.

We’ve been breaking up monopolies for more than a century. In 1906, Congress broke apart businesses that ran railroads and sold products carried on railroads, so no business got a comparative advantage when shipping its goods (think about the analogy to Amazon today). In the 20th century, the FCC adopted structural separation rules in the television and telecom industries. In 1968, DOJ made IBM unbundle hardware and software. And it worked– we saw skyrocketing sales for American software firms. The same kind of thing happened when DOJ broke up AT&T’s monopoly.

It’s time once again to bring out the big guns and break up the giants. To restore competition in existing digital markets and to foster emerging markets like AI, Amazon’s e-commerce platform should be separated from its product lines. Google should be broken into its search business and its browsing services. Each of the major cloud services—Google, Microsoft, and Amazon—should not be allowed to use their enormous size to dominate a whole new field, and that means blocking them from operating large language models. Each of these moves would create valuable competition.

So first, break up the giants. Second, keep them from forming, and that includes blocking vertical integration.

Our antitrust laws don’t distinguish between vertical mergers (one company buying another in its supply chain) and horizontal mergers (one company acquiring another at the same level of production). One of the core features of the right-wing takeover of antitrust law was to make up a distinction between horizontal and vertical mergers, essentially claiming that vertical mergers are somehow “good monopolies” that help consumers.

First, I’ve read all the antitrust laws, and I still haven’t seen the phrase “good monopolies.” I also haven’t seen any distinction between horizontal and vertical mergers. So let me say to antitrust defense lawyers and their fellow traveler judges and economists: stop making stuff up. Follow the law Congress wrote.

Vertical integration nearly always enables significant anticompetitive behavior, like self referencing. Think of Amazon pushing Amazon-branded products to the top of its search results or Google placing its own comparison-shopping tools above others. By favoring their own products, big players lock in customers and lock out competitors at multiple points in the tech stack—and that makes it a whole lot harder for new companies to enter the market.

AI will make the vertical integration problem a thousand-fold worse. For example, three tech giants – Microsoft, Google, and Amazon – control the vast majority of cloud infrastructure. That means they control the foundation on which virtually every innovator will build generative AI models and AI applications.

The giants have every incentive to lock customers into their own cloud systems, and then preference their own products at every step in that chain. And speaking of chains, remember the supply chain crisis we faced a few years ago, when the pandemic shut factories down? Vertical integration is not just about consumer prices. Vertical integration poses a real risk to our entire economy, our health, and our security

First, break up the giants. Second, stop concentration through vertical integration. Third, stop accepting mergers, vertical or horizontal, based on weak corporate promises.

When a company buys up a competitor and wants to avoid antitrust objections, it will sometimes make promises to treat workers well or treat the competitors that are left fairly, or it will offer to sell off a teeny slice of its business. These merger remedies are lipstick on a pig designed to let bad deals go through—and for years the FTC and DOJ have just gone along.

How bad is it? Just look at Microsoft’s acquisition of the videogame maker Activision. Microsoft

hyped the idea that the deal should go through because it had struck a great pro-worker agreement. Less than three months after the deal was struck, Microsoft laid off nearly two thousand Activision workers.

Or look at Hertz’s merger with Dollar Thrifty, or Safeway with Albertsons. Companies sold some assets to make a deal work. But the spinoffs were designed to fail. Once they declared bankruptcy, the giants just bought them back—some merger remedy.

Merger remedies are useless. If a merger deal can’t go through without a merger remedy, then the deal shouldn’t go through. Period.

OK, break up the giants. Stop bad vertical mergers. Stop bad merger remedies. Now the final one—and a personal favorite: embrace interoperability.

You all know interoperability—it’s why you can use your phone to call me, even if you and I don’t use the same phone company. It’s why you can use your Gmail account to email your grandmother who has an Outlook account. And it’s why you can use a non-Microsoft browser like Chrome on a Microsoft operating system – well, that interoperability is thanks to a DOJ lawsuit.

And for all you developers in the room—this remedy is what will let you bring competition to tech markets.

You guys already get it, but for everyone else, let me explain: interoperability and its cousin, data portability, form one of the Big Four antitrust remedies because without them, Big Tech firms can continue to build walls around their products so they can offer worse products and keep users from going to competitors. Today, you can’t run an Android app on an Apple phone or take your followers with you when you leave Twitter. Those are policy choices, not technical impossibilities.

Interoperability makes it easy for consumers to switch between products and let consumers choose the best, not just the biggest options.

In other words, it’s a remedy, like the others, that promotes competition. Developers, please keep building tools and third-party apps to let systems communicate—you are a critical part of this antitrust remedy.

There they are: four remedies that will bring more competition to our markets. The giants will fight us, but we have the tools to beat them back—if we use them.

Let me finish with a thank-you and a plea: We brought antitrust enforcement back to life together. We can stand here today to celebrate successes because of you. But to develop truly robust markets, we need to keep the pressure up. Please. Keep organizing. Keep using your technical skills to show how these remedies are workable. Keep paying attention to how antitrust enforcement is funded and what judges are doing. Keep speaking up in agency processes and in the halls of power. Don’t let up.

It's all about competition versus concentration. This is a fight for a stronger economy, stronger communities, and a stronger democracy—and it’s an honor to fight alongside you. Thank you.

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