At SXSW Democrats Put Big Tech in the Hot Seat
AUSTIN — On the first weekend of one of the country’s biggest tech conferences, Democrats running for president walked onto the stage of the Moody Theater and talked about how to cut that industry down to size. Sen. Elizabeth Warren (D-Mass.), who had just rolled out a plan to break up the largest tech companies, set the tone for everyone.
“We want to keep the marketplace competitive, not let a giant who has an incredible information advantage have a manipulative advantage,” Warren said at a Saturday afternoon Q&A at South by Southwest (SXSW). “When someone gets market dominance, they then start to destroy competition in the very world that gave them birth.” Her talk was the only one by a presidential candidate that filled its venue. (Sens. Kamala Harris and Bernie Sanders, who have drawn the largest crowds of the Democratic field, did not attend this year.)
SXSW was not an obvious place for Warren's argument to work. The conference, a place where start-ups such as Twitter and Uber broke through to mass audiences, is among other things a celebration of unfettered markets. Four years ago, Sen. Rand Paul (R-Ky.) made a buzzy trip to Austin, stopping into panels and tech incubators. Libertarian-minded Republicans wanted to set innovators free, he argued, while Democrats wanted to lock them in chains.
But this year's conference, coming after weeks of debate about capitalism, socialism and the Democratic Party, became a place for Democrats to talk about all the rules capitalism was missing. Ignoring the jargon, they talked about the inevitable clash with big tech and the role for government regulation. Sen. Amy Klobuchar (D-Minn.), who has pitched herself as a moderate who could win back skeptical conservatives, found herself talking about the need for more antitrust law. Asked by tech journalist Kara Swisher whether “Facebook and Google should be allowed to buy anything big right now,” Klobuchar did not say yes.
“We've got to look carefully at all of these deals,” she said. Then, she talked up her own legislation to crack down on monopolies, “to supercharge the agencies” and apply rules normally reserved for companies that charge consumers to companies that sell to advertisers after collecting data. Rather than differing with Warren, Klobuchar wanted to do “stuff Elizabeth is trying to get at in a different way.”
No Democrat proposed an idea quite as big as Warren's. She would define companies that run marketplaces of their own and are valued at more than $25 billion as “platform utilities,” with new restraints. If implemented, tech giants that have absorbed smaller companies and used them to advertise and sell their own products would have to be broken apart. While announcing the plan in New York, she congratulated the city for the collapse of a deal to bring Amazon jobs to Queens with a tax incentive package.
When asked about this, the eight other candidates who traveled to Austin this weekend tended to agree with Warren, at least on the basics.
“Is that worth considering? Sure,” said Julián Castro of Warren's antitrust plan. “I agree that we have to be much stronger in terms of antitrust enforcement. I believe that we need to ask a lot more of people at the top in this country, and of wealthy corporations. I don't understand how Amazon made $11 billion in profit last year, paid no federal taxes, and at the same time, New York was about to offer them a $3 billion package to locate their second headquarters.” (Amazon founder and chief executive Jeffrey P. Bezos owns The Washington Post.)
Castro has positioned himself on the left of the Democratic field. But former Colorado governor John Hickenlooper, who has embraced his depiction as a centrist, also said it was time to think about cracking down on monopolies and mergers.
“There was a period 40 or 50 years ago when large companies would try to merge together, and there was a strong feeling that the public was better served by having more competitors,” Hickenlooper said in an interview. “Right now it seems like we say, well, if we get down to two of these other two or three competitors, that's a competitive system. That's probably nonsense. What are the benefits to society when you have mergers of really large companies like these? Not just tech companies, but banks? It's in what we call 'value capture.' It's the companies saying: Well, we don't need two HR teams, we'll lay these people off.”
Before he arrived at the conference, Hickenlooper had been the unwilling participant in an argument with Howard Schultz, who's considering a presidential run as an independent. The former Starbucks chief executive, perturbed by Hickenlooper's answer to a question about whether he would call himself a “capitalist,” tweeted that “if even a successful businessman and entrepreneur like Governor Hickenlooper can't openly support capitalism in the Democratic primary, it's clear this is Senator Sanders' party now.”
But Schultz, who took questions at a Saturday morning session at the conference, struggled to define what he was arguing against. Asked to define “socialism,” he invoked the crisis in Venezuela; then, after some boos, he said capitalism was a force for good that needed to be rethought a little.
“We want our free enterprise to be sustainable,” Schultz said. “Is it perfect? No. Does it need to be refined? Yes. Do businesses have a moral obligation, in addition to making money? Yes.”
Across the conference, the only full-bore critique of capitalism came from Rep. Alexandria Ocasio-Cortez (D-N.Y.), who said capitalism as practiced in 2019 meant that “any human and environmental cost was written off in the quest for profit. "
“That ideology is not sustainable, and cannot be redeemed,” she said.
But among the Democrats running for president — even Schultz, who argued that he has been rendered politically homeless — there's neither a call for capitalism to be dismantled nor one for it to be kept as is. Over the weekend, while they hashed this out, most of SXSW’s attendees were in other rooms.
But the debate is coming to them eventually.
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