Washington’s Flawed Big Tech Breakup Proposals

Lawmakers took a step towards breaking up big tech today, introducing a package of bills that would, among other things, prevent online platforms from using their scale to go into other businesses. (For a more involved explanation, see stories here, here and here). Coming on a near-summer slow-news Friday, this was bound to generate lots of headlines about supposedly far-reaching proposals. But even if you agree big tech needs to be restrained, these proposals aren’t the answer.

The prime example of a company that would be affected by the proposals is Amazon, which wouldn’t be able to sell its own “private label” versions of goods that compete with goods sold by outside merchants on Amazon. Lots of retailers sell private label versions of products of course (I’m a fan of Costco’s Kirkland coffee, for instance). But this proposal only applies to companies with a market capitalization of more than $600 billion, a way of limiting the impact to big tech.