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

Key Points
  • In her quest to "break up Big Tech," Sen. Elizabeth Warren says Apple should not be able to run the App Store and sell its own apps on it.
  • Warren unveiled her plan to break up big tech companies in a Medium post published Friday but did not call out Apple by name.
  • In an interview with The Verge, Warren outlined how Apple would be included in the plan to separate online marketplaces from the businesses that sell on them.
Sen. Elizabeth Warren, D-Mass.
Bill Clark | CQ Roll Call | Getty Images

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.

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

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In her interview Saturday with The Verge editor Nilay Patel, Warren elaborated on what this breakup would look like for Apple. She said 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."

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.

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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.

Other presidential candidates have brought tech companies into the spotlight, although Warren's plan is the most pointed action plan so far focused on breaking up these businesses. Sen. Amy Klobuchar, D-Minn., has discussed legislation to protect consumer data in light of concerns about information shared between Facebook and third-parties. Sen. Bernie Sanders, a Vermont independent running as a Democrat, has urged Amazon to boost workers' wages and benefits.

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

Read the full interview at The Verge.

-CNBC's Tucker Higgins and Jacob Pramuk contributed to this report.

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