A better way to break up big tech

AUSTIN, Texas — Among the techies who attended the annual South by Southwest Interactive conference the past few days, the hottest topic of conversation — besides the swarms of drunken idiots careening around Austin on rented electric scooters — was Sen. Elizabeth Warren’s ground-shaking proposal to break up large tech companies like Amazon, Google and Facebook.

In her proposal, which she released on the eve of the conference, Warren argued that these companies have abused their power and harmed competition in two big ways.

The first is by offering their own products on services they control: Amazon giving preferential treatment to its house brands, or Apple promoting its own apps inside the iOS App Store. Warren, D-Mass., a presidential candidate, argues that the companies should be required to do one or the other — sell their own goods or run a third-party marketplace — but not both.

“You can be an umpire or you can own teams,” she said. “But you can’t be an umpire and own one of the teams that’s in the game.”

Warren also argues that by acquiring potential competitors, as in Facebook’s purchases of Instagram and WhatsApp, large tech companies have made it harder for smaller startups to compete on fair terms. She proposes appointing regulators who would undo such mergers and break up the conglomerates.

Regulating big tech is quickly becoming a central theme of the 2020 presidential race. Sen. Amy Klobuchar, D-Minn., Sen. Bernie Sanders, I-Vt., and others have also talked about the need to rein in the tech giants. And Warren has demonstrated more technology literacy than most elected officials.

But many of the tech-industry insiders I spoke with in Austin, including some who agree with Warren that the big companies are too powerful, cautioned that some of the details in her proposal were...