Warren’s plan to fight big tech directly threatens one of Amazon’s most successful businesses (AMZN)

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Sen. Elizabeth Warren announced on Friday a new plan to use existing and new anti-trust measures to break up large tech firms.
As part of her proposal, Warren said she would use competition laws to keep marketplace operators from also selling directly to customers.
Amazon‘s marketplace is one of the most successful parts of its online retail strategy, accounting for more than half of sales on its website.
Warren has made similar comments before.

Elizabeth Warren is gearing up to fight big tech.

The Massachusetts senator and 2020 Democratic presidential hopeful announced on Friday a plan to use new and existing anti-trust measures to break up large tech firms, reverse mergers, and decouple platforms. She explicitly named Google, Facebook, and Amazon in an open letter published on Medium titled "Here’s how we can break up Big Tech."

Warren outlined a plan to use new and existing laws to achieve these goals. The proposal includes passing legislation that would outlaw companies from competing on the platforms that they manage. Companies with more than $25 billion in global annual revenue and "that offer to the public an online marketplace, an exchange, or a platform for connecting third parties" would be called "platform utilities" under Warren’s proposal.

"These companies would be prohibited from owning both the platform utility and any participants on that platform," Warren writes.

"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."

Warren explicitly named Amazon and its marketplace platform, saying that Amazon can use the data it gathers from selling other companies’ products to create its own private-label products, ultimately running smaller companies out of business.

She writes that in this proposal, "Amazon Marketplace and Basics … would be split apart."

Amazon did not respond to Business Insider’s request for comment on Warren’s proposal.

Amazon’s marketplace business has been outpacing Amazon’s direct sales for years. The sector now accounts for more than half of Amazon’s total sales on its website.

The online retailer isn’t the only one that operates a marketplace while directly selling goods. Walmart also has a similar model.

And, this isn’t the first time Warren has talked about splitting up third-party marketplace platforms from companies that sell directly to customers.

Speaking with The New York Times’ Andrew Ross Sorkin in September, Warren criticized Amazon for the fact that it is both a marketplace — essentially, a platform for other sellers — and a direct retailer itself.

Warren said that, ultimately, Amazon should not be in both businesses.

"You got to pick one business or the other, baby," Warren said. "You want to be a competitor, be a competitor. That’s great. You want to be the platform provider that is a different function. If you’re getting a huge competitive advantage from being a platform provider because of all this information you keep scraping off, then we no longer have competition going on."

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Source: Business Insider – dgreen@businessinsider.com (Dennis Green)