This Is What Fred Wilson Has To Say About Elizabeth Warren

By Rishma Banerjee

Senator Elizabeth Warren, a Democrat running in the 2020 presidential primaries, announced that, if she is elected, her administration will break up tech giants such as Amazon, Facebook, Google and others by designating them as public utilities, in an effort to promote competitive markets and protect consumer privacy.

She said,

“…Venture capitalists are now hesitant to fund new startups to compete with these big tech companies because it’s so easy for the big companies to either snap up growing competitors or drive them out of business.”

Warren uses the federal government’s lawsuit against Microsoft in the 1990s as an example. She believes that it helped clear the path for the creation of internet companies like Google at that time.

She wishes to bring about structural change by designating companies, which offer to the public an online marketplace, an exchange, or a platform for connecting third parties, as “platform utilities”. These companies must earn $25 billion or more in annual global revenue and 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.

In case of smaller companies (those with annual global revenue of between $90 million and $25 billion), Warren said, “their platform utilities would be required to meet the same standard of fair, reasonable, and nondiscriminatory dealing with users, but would not be required to structurally separate from any participant on the platform.”

Warren wishes to give state attorneys general and private parties the right to sue a platform for conduct that violates those requirements and the government could fine a company 5 per cent of their annual revenue for violating the terms of the new legislation.

Amazon Marketplace, Google’s ad exchange, and Google Search would be platform utilities under this law.

Fred Wilson, one of the most prominent Venture Capitalist in Silicon Valley, when asked about Warren’s statement said,

“We are on the cusp of a new architecture, based on a user’s control of their own data, and monetized via protocol tokens, that will unseat all of these monopolies in time. the massive increase in ICO-based fundraising, largely outside of the US, is the counterweight to this.”

However, Wilson made it a point to mention the presence of Google, Facebook, Amazon, Apple “kill zones.” “Stay out of that zone”, he said, “and you’ll be fine.”

A number of blockchain projects are working on providing open alternatives to the tech giants with the Initial Coin Offering (ICO) model providing a business method for user-controlled data.

On the other hand, Warren seemed to be sceptical of ICOs.

“None of the roughly $4 billion so far raised through ICOs had registered properly with the SEC,” she said.

Her call for regulation is a big moment for the tech industry; it should also serve as a wake-up call for these companies to do more than just pay lip service to the problems their dominance is causing in the marketplace.