Sens. Elizabeth Warren and Amy Klobuchar's audacious proposals to regulate Big Tech have set off alarm bells in Silicon Valley and threaten to drive a wedge between Democrats and the Bay Area business leaders who have long been generous party supporters.

March 11, 2019 | Austin


Good morning. The best pork chop in Texas is at Odd Duck.


• Want to join the Market? Sign up here.



Democrats turn on the Valley


Moving the Market: Sen. Elizabeth Warren and Sen. Amy Klobuchar's audacious proposals to regulate Big Tech have set off alarm bells in Silicon Valley and threaten to drive a wedge between Democrats and the Bay Area business leaders who have long been generous party supporters.


The Big Picture: The Democrats' eagerness to beat up on Big Tech, if embraced by the party at large, could undo the longstanding friendship between liberals and Silicon Valley and leave many of America's most powerful business leaders without a party to support in 2020.


Sen. Warren's Proposal:


• The Massachusetts Senator's plan would break up Amazon, Apple, Facebook and Google by reversing their major acquisitions — including Facebook's acquisition of Instagram and WhatsApp, Amazon's acquisition of Whole Foods and Google's acquisition of Waze.


• It would also block companies from participating in the marketplaces they provide — meaning Amazon could not sell its own goods via Amazon Prime, and Apple could not distribute its own apps in the App Store.


• The tech giants would also be prohibited from sharing user data with third parties, a rule that would threaten the very business model of advertising-reliant companies like Facebook and Google.


Sen. Klobuchar's Proposal:


• The Minnesota Senator's plan, which she floated this weekend at SXSW, would impose a tax on tech companies that exploit user data. “When they sell our data to someone else, maybe they’re going to have to tell us so we can put some kind of a tax on it," she said.


Silicon Valley Reax:


• Several Silicon Valley sources tell me they believe the Democrats are shamelessly capitalizing on public anxiety over Big Tech while ignoring the fact that there's no legitimate antitrust case for such severe regulations.


• "Big isn’t illegal," one of the sources said. "For antitrust enforcement, there needs to be actual harm and anticompetitive behavior."


• Some also believe that the lawmakers' campaigns against Big Tech are out of step with the vast majority of Americans who draw value from the tech platforms, including @elizabethwarren (3,174,000 Facebook followers) and @amyklobuchar (323,396 Facebook followers).


What's Next: The Warren proposal specifically has launched a new litmus test for Democratic presidential hopefuls in regard to regulation, with rival candidates set to be measured by whether or not they embrace or oppose her plan to break up Big Tech.


• That Warren is setting the parameters for the debate around tech regulation is yet another reminder of how the progressive candidates are driving the policy discussion in the Democratic primary.


Bonus .... Big in the Valley: This column from TechDirt's Mike Masnick: "Senator Warren's plan to curb the power of big tech, while addressing valid concerns, feels like a grandstanding populism without enough substance behind it."


Jim Bennett/Getty

Howard Schultz hits socialism


The Texas Swing: Howard Schultz is looking to flip the script on concerns that his third-party bid would spoil Democrats' shot at the White House by arguing that Bernie Sanders or Elizabeth Warren would re-elect President Trump if either of them were the nominee.


• Speaking to me on stage at SXSW, Schultz said Sanders, Warren and others were proposing a move toward socialism that was "inconsistent with the values and the heritage and the tradition of the country."


• "If Donald Trump runs against one of those types of candidates, it's my belief that Donald Trump will be re-elected — that the vast majority of Americans are not going to embrace socialism."


• Schultz did not specify all Democratic candidates that fell under his definition of "socialism," but did at one point drop Sen. Kamala Harris' name alongside Sanders and Warren.


The Big Picture: Schultz is trying to recast the more progressive Democrats as the true spoilers who threaten to re-elect Trump, while also tethering the entire Democratic field to the far left by suggesting that Sanders, Warren et al are dragging the entire party farther to the left.


• "What you're going to see in the primary is that they're going to go left of each other," Schultz told me. "I don't know how much farther left they can go. But they're going to go left of each other."


Bonus ... Schultz also sought to counter concerns about his viability (or lack thereof) with an appeal to entrepreneurs: "How many entrepreneurs are in the room today and people told you your idea, your dream could not come true?" he asked to applause. "I am with you."


Flashback ... Byers Market, Feb. 12: "Schultz was once told that consumers wouldn't spend more than 50 cents on a cup of coffee. So he doesn't put a lot of stock in conventional wisdom."


Watch the full interview here.

For the record... Shortly after our interview, The Daily Beast published a report headlined "Howard Schultz Bombs at SXSW," which claimed that he "struggled to generate any enthusiasm whatsoever in his pitch to SXSW."


• That report provided a grossly inaccurate portrayal of Schultz's remarks and the audience's response, which was largely favorable and included several rounds of applause.


• For those looking to understand how Schultz actually fared, I would encourage you to watch the whole interview. But even this two-minute excerpt should dispel the notion that Schultz "bombed."

Rally the Market


Talk of Austin: Rep. Alexandria Ocasio-Cortez outdrew all the presidential candidates who came to Austin over the weekend — which serves as an important reminder about the new rules of engagement.


If you're enjoying the newsletter, share it with friends.


Diego Donamaria/Getty

Jeff Zucker unloads on Fox


Big in Midtown: CNN President Jeff Zucker, who has long criticized Fox News for its unabashed support of President Trump, is taking an even more aggressive stance toward both parties now that the Justice Department has relented on its effort to block the AT&T-Time Warner merger.


• Speaking at SXSW, Zucker called Fox News a “propaganda outlet” and issued an unforgiving attack on its journalists: "They chose to work at Fox and they don’t get to hide behind the fact that they’re excellent journalists or anchors. The fact is they work at a place that has done tremendous damage to this country."


• Zucker also accused Trump of trying to block the AT&T-Time Warner deal due to his dissatisfaction with CNN: "Do I think there was political motivation in trying to block the deal? I do. Do I believe it came from the highest parts of government? I do. ... Clearly there was a political agenda at work and I don't think it takes being a genius to figure out where that comes from."


• In a reference to Fox News' influence over Trump, Zucker said: “I think the question should be, is Fox state-run TV or is the White House state-run government by Fox TV?”


The Big Picture: Zucker's criticisms will bolster his network's standing with critics of Fox and Trump alike, but they threaten to undermine CNN's claim to being an impartial arbiter of news.


Bonus: John Oliver ripped AT&T last night on HBO.

Market Links


President Trump eyes social media monitoring (NYT)


Jack Dorsey wants to change how we use Twitter (Recode)


Jonah Peretti aims BuzzFeed toward sustainability (CNN)


Kevin Feige nets historic $455m from 'Captain Marvel' (THR)


Scott Stuber brings David Kosse to Netflix (Deadline)


Matt Winkelmeyer/Getty

Noah Oppenheim unveils 'Now'


New Streams: NBC News President Noah Oppenheim unveiled his network's plans to launch a free, ad-supported streaming service in May that will carry 8 hours of daily programming and be available to everyone, regardless of whether or not they have a cable subscription.


Oppenheim at SXSW:


• "It will [include] live updates at the top of every hour, and when breaking news mandates, we’ll go up live as well."


• "We will be doing original work that will be specific for the streaming service, [while also] drawing from the reporting that takes place across all the other NBC News properties [and] other corners of NBCUniversal, E News, sports, you name it."


The Big Picture, via Variety's Brian Steinberg: "NBC will be the latest to enter an increasingly crowded field. ... The rush to broadband comes ... as multiple swaths of news aficionados are getting their news video online."


• "Approximately 93% of adults get at least some news via mobile or desktop, according to... Pew Research Center."


Dave Pedley/Getty

Katzenberg & Whitman's bet


Talk of Tinseltown: Jeffrey Katzenberg and Meg Whitman's vision for Quibi, which they laid out during an interview with me at SXSW, and again here, is of a premium service that bridges the gap between television and mobile but is fundamentally rooted in the idea of an OTT service rather than a mobile-native platform like Snapchat.


The Big Picture: Katzenberg and Whitman are betting on the idea that they can repurpose the premium television experience to suit mobile habits, and that consumers who today pass their idle time with user-generated social content will tomorrow hunger for studio-generated content.


In our interview, Katzenberg and Whitman laid out an ambitious content release schedule for Quibi and unveiled four new shows — including a docu-series about Evan Spiegel that has been widely interpreted as Katzenberg's shot across the bow of the Snap founder.


What's New:


• Katzenberg and Whitman plan to release a new Quibi series every Monday.


• The reality slate will include a music competition show hosted by Scooter Braun and a reality series from Jennifer Lopez’s production company.


• The scripted slate will include a prequel to Telemundo’s "El Señor de los Cielos" and a docu-series called "Frat Boy Genius" about Spiegel.


• The news slate will feature a daily BBC news update, a "best of late night" round up, and a summary of the day's music news and sports news.


What's Next: Quibi launches in April 2020. I've expressed my doubts; Katzenberg believes I'm too skeptical ... though he phrased it somewhat differently.


Bonus: Katzenberg also told me that Steven Spielberg never said anything about blocking Netflix from Oscars contention, and blamed a reporter for twisting a rumor.

What Next: Forget Quibi, forget Snap. Are you on TikTok?


• See you tomorrow.


Follow Dylan Byers

Get the NBC News Mobile App


This email was sent to: 

This is an automated email. Do not reply directly to this email.