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Elizabeth Warren revealed her plan to break up Apple if she becomes president

CNBC International 2019-03-11 18:21:50
Bill Clark | CQ Roll Call | Getty Images Sen. Elizabeth Warren, D-Mass.

Presidential hopeful Sen. Elizabeth Warren wants to break up Apple by separating its control of the App Store from its ability to sell its own apps on its marketplace, the Democratic senator from Massachusetts told The Verge editor Nilay Patel in an interview Saturday.

Warren's Medium post announcing her plans to "break up Big Tech" does not mention Apple by name, but instead calls out Amazon, Google and Facebook. But her campaign confirmed to CNBC Friday that Apple is included in the mission, which states that companies with an annual global revenue of at least $25 billion cannot own both a "platform utility," defined as a company that offers "an online marketplace, an exchange, or a platform for connecting third parties," as well as own the participants on that platform. In Google's case, for example, this means they cannot own both its ad exchange and business on that exchange.

Warren elaborated on what this break up would look like for Apple in her interview with The Verge, saying, there was "no special reason" the company was left out of her Medium post.

"Apple, you've got to break it apart from their App Store. It's got to be one or the other," Warren told The Verge. "Either they run the platform or they play in the store. They don't get to do both at the same time."

In the interview, Warren compared the dominance of tech companies to railroad companies which also faced antitrust scrutiny over a century ago.

"Back when the railroads were dominant, and you had to get steel or wheat onto the railroad, there was a period of time when the railroads figured out that they could make money not only by selling tickets on the railroad, but also by buying the steel company and then cutting the price of transporting steel for their own company and raising the price of transporting steel for any competitors. And that's how the giant grows," Warren said.

She said in both cases, the companies benefit from market dominance rather than winning against competition based on providing a superior product or service. In the case of the App Store, she said it's unfair for a company that collects data about users based on owning a platform to also have the ability to sell its own items on that platform.

Apple and Warren's campaign did not immediately return CNBC's requests for comment.

Read the full interview at The Verge.

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