We don’t often see eye-to-eye with Elizabeth Warren, but we agree that it would be a bad thing if Amazon were the only retailer left in the country. We also agree that there’s reason to fear the power that Facebook and Google wield, or could wield someday.
We’re still not on board at the moment with Warren’s idea that the federal government ought to break up the big tech companies. But, if we can half-agree on the problems, then we can certainly find some solutions on which we all agree.
Here’s our compromise proposal: Before we resort to breaking up big tech, how about we just stop propping up big tech? Before cracking down on Amazon, Facebook, and Google, let’s kill the public policies that rig the game in the favor of Amazon, Facebook, and Google.
For example, a House committee last week passed a bill to set minimum wage at $15 an hour. Amazon, which recently agreed to pay its workers $15 an hour, is lobbying for this law in order to break its competitors who lack Amazon’s volume and cannot operate on its tight margins. If you worry that Amazon is becoming too powerful, stop outlawing its smaller competitors by supporting the wage law that will outlaw its competitors’ business model.
In fact, all regulations and taxes that add to the cost of operating a brick-and-mortar store help Amazon by shutting down mom and pop businesses or preventing them from starting. Warren ought to examine the federal regulations that cripple Main Street, and try to alleviate that burden wherever possible, before resorting to the extremely invasive but occasionally necessary measure of breaking up a lawfully built company.
If Amazon really is the bad guy, then why are so many in Congress eager to pass a federal Internet sales tax bill and net neutrality regulations that it favors? Net neutrality is a major lobbying priority for all three of Warren’s boogeymen — Amazon, Facebook, and Google — because it freezes in place a business model that favors these giants. Passage of such a law does not seem like a great way to challenge their market dominance.
Internet sales taxes are similar. Amazon already collects these taxes. That’s why it is lobbying for a federal law to require all online retailers to collect them. Again, this is a measure designed to break Amazon’s competition in the area of fulfillment. If a local bookstore gets out-of-state orders over the Internet, it would now be required to calculate, collect, and remit state taxes that until now were the sole responsibility of the out-of-state buyer. It is beyond the ability of most small businesses to calculate, collect, and remit taxes for thousands of different state and local jurisdictions nationwide. But Amazon can do it, and so this law enhances its advantage in the market. If Warren is really serious about battling Amazon’s dominance, she can do it by opposing this bill.
Finally, of course there are the rafts of corporate welfare state and local politicians offer the likes of Amazon. Does Warren have any pull with Gov. Andrew Cuomo, Mayor Bill de Blasio, or the Virginia Democrats who prostrated themselves before Amazon, offering billions in handouts and special targeted tax breaks?
If Warren is serious, and if she really wants to curb the e-commerce giant’s power, she should start by attacking the tax and regulatory subsidies the company is using to slant the playing field against its competitors.
