Warren's plan to break up Google and Facebook would benefit small business

Warren's plan to break up Google and Facebook would benefit small business
© Getty Images

Imagine giving all of your precious online advertising money (as well as critical information about your business) to one company, which then has full authority to spend that money as it pleases using its own, proprietary, mysterious algorithm. Imagine too that the company makes no promises about whether or not you'll get any return for what was spent. Imagine further that you are competing with other, much larger brands for this advertising space and that it's all under control of that one company. Imagine that you literally have no other options. 

You don't have to imagine this. It's reality. It's Google and it’s Facebook, and if you're a small business owner trying to attract new customers online, this is the impossible task you face. Every day.

Both companies have created amazing technologies that have literally changed humankind for the better. But there’s been a big cost: Our loss of privacy and competition. While drawing hundreds of millions of consumers to many of its free services, the two tech giants have also accumulated a monstrous amount of data — and power.

ADVERTISEMENT

As I’ve previously written, Google now owns – according to some industry experts – close to 90 percent of online search through its many platforms. That not only includes its search engine, but also YouTube, Gmail, Chrome, office apps, storage, web-hosting and hundreds of millions of smartphones and tablets running its Android operating system on more than 76 percent of mobile devices around the world. Facebook has already demonstrated that it can slant the kind of news, videos, ads and information its billions of daily users receive.

Getting found online has become a critical strategy for any business trying to sell its products or build a brand. Unfortunately, the trillions of dollars of worldwide revenues that come from being found online are under the watchful eyes and control of Google’s and Facebook’s search and advertising illuminati, and no one knows how it all really works.

But it’s the only game in town, so we’re forced to play. And if you want to play in this game, you’ve got to pay. And because there's no competition, Google and Facebook’s ability to charge whatever they want – let alone track those mysterious "clicks" and "views" that quickly eats up advertising budgets – goes unchecked. Who knows if those numbers are right? Who knows where your ads are showing? Who knows if they’re even showing at all?

All of that is well and fine for big brands, which have enormous budgets that will certainly catch the attention of the Google/Facebook gods. But it puts the millions of small businesses in this country at a huge disadvantage.

Enter Elizabeth WarrenElizabeth Ann WarrenFive takeaways from the Democratic debate As Buttigieg rises, Biden is still the target Leading Democrats largely pull punches at debate MORE. The current front-runner for the Democratic presidential nomination wants to break up these tech giants. Good for her.

ADVERTISEMENT

Warren wants to turn these companies into utilities, which would effectively require – due to anti-trust concerns – a breakup. Google's parent company, Alphabet, for example, would likely have to spin off some of its 200 prized holdings, including YouTube, GMail and Chrome, to avoid this conflict. Warren also wants to regulate acquisitions that seek to control markets like when Google gobbled up traffic system app Waze and made it disappear inside of Maps (which controls 67 percent of the navigation market), or when it bought home and office automation technology maker Nest to help automate homes and offices, and gather data and drive traffic and sell ads.

"As these companies have grown larger and more powerful, they have used their resources and control over the way we use the Internet to squash small businesses and innovation, and substitute their own financial interests for the broader interests of the American people," Warren said in a statement. "To restore the balance of power in our democracy, to promote competition, and to ensure that the next generation of technology innovation is as vibrant as the last, it's time to break up our biggest tech companies."

I don’t know if Warren is a socialist or not. And when it comes to this issue, I don’t care. I’m a long-time free-market capitalist. Google, in particular, is killing competition, and Warren’s plan to break it up would have a few very significant effects on countless small businesses like mine.

For example, it would enable more search engines like Bing, Yahoo and many others to expand their reach and thereby give me and other small business owners better (and more fairly priced) options for our advertising budgets. Different search engines will likely be more attractive to different demographic groups. Having a more affordable, competitive and focused set of search tools to choose from would absolutely get us more bang for the advertising bucks.

Video is another elusive tool for many small businesses like mine. We would like to produce more. But who’s going to find them amongst all the noisy influencers and brands that are out-maneuvering us? Anything that could chip away at YouTube's more than 73 percent share over the video market would help my videos find the right audience at a more affordable price.

Or perhaps giving more startups the ability to create competing (and better) applications for mobile messaging, mapping, internet browsing (Chrome owns 70 percent of this market), email (Gmail controls a "paltry" 27 percent of the email market) and collaboration will result in more great products, more opportunities and more options for both these entrepreneurs and their small business customers.

Warren's plan would do this, and as a small business owner, I love it.

Gene Marks is founder of The Marks Group, a small-business consulting firm. He frequently appears on CNBC, Fox Business and MSNBC.