A Better Way to Break Up Big Tech

The cloud-computing market may not seem like an obvious antitrust target. It is highly competitive, and years of price wars between the giants have driven the costs of these services down. Doesn’t giving young start-ups the ability to rent world-class infrastructure make it easier, not harder, for them to compete?

Yes, it does. But the concentration of critical infrastructure among so few companies — each of which also operates enormous consumer-internet businesses of its own — gives those companies enormous power, and invites anti-competitive abuse.

For example, let’s imagine that Jeff Bezos, Amazon’s chief executive, decided to sabotage Netflix, which runs on Amazon Web Services, Amazon’s cloud-computing unit, in order to help his company’s streaming video service. He could theoretically tell the Amazon Web Services team to slow Netflix’s traffic, or analyze its usage patterns to determine which Netflix shows Amazon’s streaming-video team should copy.

To be clear, Mr. Bezos is extremely unlikely to do that, given that it would be a scandalous violation of Amazon’s privacy policies and would cost the company a lucrative customer. But the reality that companies with dominant internet services also provide the infrastructure that powers much of the consumer internet is a clear example of the kind of market consolidation Ms. Warren is trying to address.

An effective breakup proposal could require companies like Amazon, Google and Microsoft to spin their cloud-computing divisions off into stand-alone businesses, in a manner similar to the one Ms. Warren proposed for breaking up e-commerce marketplaces. To adapt her baseball analogy, tech companies would either play on the team or own the stadium, but not both.

Get rid of the “app tax.” Another easy, specific fix would be to stop Apple and Google, the makers of the two dominant mobile operating systems, from taking unfair advantage of mobile app developers.

At the moment, any company that wants to sell in-app purchases or subscriptions through an iOS app must pay what software developers derisively call the “Apple tax”: a fee of 15 to 30 percent that Apple skims off the top of in-app purchases and subscriptions bought by users. (Google’s mobile app store charges similar fees.)

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