Posted on 02/12/2022 5:00:42 AM PST by Kaslin
The Senate Judiciary Committee made an odd move out of the gate this year, passing an enormously consequential antitrust bill aimed at a handful of the biggest U.S. tech companies in spite of bipartisan agreement that the bill isn’t ready for primetime. Not only will this bill fail to help consumers by “reining in Big Tech,” but it could also hurt them by detracting from U.S. global competitiveness.
Concerns that the legislation, the American Innovation and Choice Online Act (AICOA), S. 2992, might threaten U.S. global tech leadership came from as ideologically diverse a crop of lawmakers as Senators Coons (D-DE), Feinstein (D-CA.), Cornyn (R-TX), Tillis (R-NC), and Lee (R-UT). Feinstein warned “I’m concerned that this is going to be very dangerous legislation; it may end up giving a competitive advantage to other large, global businesses that narrowly escape being regulated by the bill.”
AICOA is merely one of a salvo of antitrust reform proposals specifically structured to encompass only the largest U.S. tech companies — Apple, Google, Facebook, Amazon, and Microsoft — with the explicit goal of restricting their actions in the competitive marketplace. By making it illegal for these companies to treat their own products preferentially on their own platforms, to limit access to those platforms by competitors, and to withhold data gathered therein, supporters claim this bill would create a “fairer” competitive environment for up-and-coming rivals in the digital economy.
What the bill would actually accomplish would be to break a lot of the sophisticated integrations that made these companies’ products desirable to consumers in the first place. Ironically, this would likely harm many of the smaller third-party sellers, app developers, and advertisers who have been able to use the Big Tech platforms for their own gain. Without a doubt, AICOA would harm the companies it is enforced against, both in terms of the revenue lost from not being able to preference their own products, and the cost of the litigation the bill would unleash.
Although economic evidence is thin at best that such a crackdown is either necessary or desirable, its supporters justify whatever collateral damage may ensue by citing concerns that the companies have simply become too big and powerful. Yet there is in fact vigorous competition in the tech industry not only among the largest platforms themselves, but from both foreign and domestic competitors. The fate of such formerly giant tech firms as Yahoo, MySpace, and AOL serve to remind today’s top firms to keep innovating or else be overtaken.
Crucially, the U.S. relies far more heavily upon the private sector than the government to invest in research and development, and the exact tech companies being targeted by these proposals in Congress are among the most prolific investors in R&D as a percent of their revenue. Tens of millions of dollars spent fending off antitrust litigation, in addition to however much revenue lost adapting to everything the new legislation bans, means less money these companies are able to dedicate towards cutting-edge research in artificial intelligence, autonomous vehicles, drones, quantum computing, AR/VR tech, and more.
Meanwhile, China is on pace to catch up with the U.S. in R&D funding, while Chinese companies like Tencent and Alibaba have ballooned into becoming among the largest tech companies by market share. This has caused even some prominent defense and intelligence officials to caution against radical shifts in competition policy, noting that regulations that kneecap U.S. tech companies stand to benefit China, to the detriment of our global leadership in tech innovation and of our national security.
U.S. dominance in advanced technology hasn’t been a coincidence, but rather a byproduct of pro-innovation economic policies that allowed the creation of the most successful companies by value in modern history. Attempting to govern competition in these markets according to a European model that values competition for its own sake over innovation and consumer welfare invites the sort of relative stagnation that has affected other more heavily regulated industries.
Even those who believe that the Big Tech companies need more scrutiny and regulation would do well to step back and consider the likely consequences of the bills currently being touted as a remedy to their concerns. Whatever ephemeral benefit is supposed to accrue from anti-consumer legislation like AICOA will be little consolation if it allows the prosperity that comes with leadership in the digital economy to move overseas.
This is simply the lobbyists for Big Tech pushing back on needed legislation to stop their over-reach into trying to govern our political affairs. I have been seeing their adds appear everywhere.
The entire tone of these adds grates on the ear like a sleezy street-corner watch salesman.
Screw those tech companies. U.S. antitrust laws would prohibit a major freight shipper from owning a railroad and giving its own trains preferred shipping rates. The same rationale should preclude a tech company from owning both a network platform and a commercial application that operates on it.
A crop of money grubbing crony senators including three of our prominent rinos. They are not ideologically diverse. They have not ideology at all.
A crop of money grubbing crony senators including three of our prominent rinos. They are not ideologically diverse. They have not ideology at all.
That piece of crap Lee has his slimey fingers in every tech giveaway. Mr. H1B should be hanged for treason.
Send him back to Kobol.
Yes, screw them indeed. Each has become an enemy of freedom loving people.
The European Union will set the rules unless Congress comes up with better rules.
The EU and China will act to favor their companies.
A global financially balanced trading framework needs to be set up.
The key rule being financial balance required.
Exactly. This has nothing to do with innovation and everything to do with political influence. My only objection is that antitrust is a much weaker weapon than taxation. Antitrust generates long running court cases. Taxes bring overly mighty companies straight to heel.
They all zuck.
Perhaps a 100% surtax on corporate income above $10 billion a year. A 21% tax rate would go to 42%.
The corporations will reorganize themselves, and in a sensible manner.
Not targeted enough. I generally oppose taxation because I oppose big government. I just want to use it as a weapon.
I think a better tax would be a tax on advertising. That would rope in the big televion networks and newspapers as well. It could be graduated based on the number of gross impressions, which is how most advertising is priced anyway. That would hit the giants hard while not affecting the smaller competitors much.
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