What Would Happen If Elizabeth Warren Broke Up Amazon, Google And Facebook?

Since announcing her 2020 presidential candidacy, Sen. Elizabeth Warren of Massachusetts has made headlines for her bold platforms and proposals, with her biggest blockbuster dropping on Friday, when she shocked Silicon Valley by unveiling plans to break up tech giants.

The companies Warren would specifically focus on are Facebook, Amazon, Apple and Google-parent Alphabet, who, along with Netflix, make up FAANG stocks. Warren explained on Sunday that "giant tech companies right now are eating up little, tiny businesses, start-ups – and competing unfairly. We've got to break these guys apart."

What could be the effects of such trust-busting plans?

Bank of America Merrill Lynch analyst Justin Post provided an investor note Monday about the possible effects of the breakups.

Post pointed out that the value of Alphabet could actually see a boost from a breakup and could increase the value of some associated companies, like Waymo and YouTube. Post said that Alphabet "has enough scale to capture vast advertiser interest" from the broad range of companies under Alphabet’s ownership.

Post said a spinoff for online retail giant Amazon "would be somewhat neutral for the stock."

However, he did point out that if any company could suffer from Warren's proposal, it would be Facebook. A breakup of the social media giant could mean the loss of Instagram and WhatsApp which, in turn, would instantly become advertising and usage competitors.

Post did not cite Apple despite Warren's intent on breaking up the tech giant.

Rep. Ro Khanna, a Democrat who represents Silicon Valley, appeared Sunday on MSNBC's "Kasie DC," and agreed with Warren about creating stronger antitrust laws but "it has to be a case-by-case basis."

Ed Black, president of the Computer & Communications Industry Association, a trade group that includes the big tech companies, told the Wall Street Journal that Warren's plan was an "unwarranted and extreme proposal."

In an opinion piece, Robert Reich, a former Secretary of Labor in the Clinton administration, endorsed the idea to "bust up the monopolies" citing how there was a need late in the 19th century "to bust up the railroad, oil and steel monopolies." New York Post columnist Maureen Callahan in October pushed for the breakup of Amazon, noting that the company "is shedding the need for human workers at a rapid clip."