GOP Hostility to Big Tech Could Curb Innovation
On September 22, Bloomberg reported that a draft executive order was circulated in the White House that would instruct the Federal Trade Commission (FTC) and the Department of Justice (DOJ) to investigate online platforms, such as Google and Facebook, for alleged antitrust abuses and biased content. This might sound like a good thing at first, but bringing concerns about political bias into antitrust enforcement would be a departure from the independence agencies currently maintain in investigations, and move the U.S. toward an anti-innovative environment. The draft order appears in the midst of increasing hostility between the president and Silicon Valley, which weakens the appeal of the United States as a home for innovation.
Prominent Republicans, too, are beginning to share Trump’s dislike of big tech. On August 30, Senator Orrin Hatch (R-UT) asked the FTC to look into competition abuses by Google, and Attorney General Jeff Sessions met with state attorneys general on September 25 about the “stifling of the free exchange of ideas” by tech platforms. The closed-door meeting centered around the political bias of these platforms, rather than any legitimate economic harm to customers. The recently drafted executive order would fall in line with these recent Republican moves to attack the Silicon Valley firms they dislike.
Even before the direct attacks on tech firms, the Trump administration’s anti-immigrant sensibilities had already created an environment that harms innovation. Silicon Valley’s high-skilled labor shortage has grown over fears of immigration restriction, leading to a drop in foreign hiring. Canada, seeing an opportunity, has taken advantage by lowering its own visa requirements for high-skilled workers, pulling away potential talent. The president’s latest moves would only make this make this problem worse.
We need only look to the European Union (EU) to find an example of what happens when innovation is frightened away by needless political intervention. In July, after Google bundled its own apps with the Android Operating System, the European Commission (EC) fined Google €4.3 billion ($5 billion) for alleged abuse of handset manufacturers. This came after a July 2017 case in which the EC ruled that Google owed €2.42 billion ($2.7 billion) for prioritizing Google Shopping in its search results. In that case, Foundem, a small price comparison search engine, claimed it was at a disadvantage because Google prioritized Google Shopping search results ahead of other prices. The courts came down hard on Google without ever finding out whether its actions were even a problem for consumers.
The vagueness of EC competition standards has allowed for cases like these to be brought to court, as companies can be fined or even broken up with an exceedingly low burden of proof. While America is home to some of the largest companies in the world, Europe can thank its hostility toward innovation for its dismal lack of comparably sized businesses. America would do well to take note.
Making antitrust more political would have geopolitical ramifications beyond its harm to businesses, as a result of a rising China. Trump has been a consistent critic of China’s expanding influence — yet he continues to weaken America’s most innovative firms, gifting Chinese firms the opportunity to gain influence in global markets. The “Fourth Industrial Revolution” is delivering plenty of new technologies that are global in scale, and America and China are currently competing to be dominant in their implementation. But an executive order that targets domestic technology firms would weaken America’s advantage in the race.
The risks that come with a decline in American technological competitiveness are not merely economic. No matter what technologies will continue to develop somewhere. It’s better for Americans — and arguably the world — if they’re built in the U.S., assuring advancing tech carries with it the liberal values that American innovation embodies. The rise of artificial intelligence can reflect consumer demand and a free market, or it can reflect the demands of totalitarian states like China — where dictators are using advanced surveillance technology to monitor and influence the behavior of citizens.
Ultimately, by distracting Google, Facebook, and Amazon with unnecessary antitrust investigations, the U.S. is pulling them away from innovating and expanding American ideals into the global tech field. In the end, this only empowers their Chinese counterparts Baidu, Tencent, and Alibaba — companies with the full support of the Chinese Communist Party — to expand their global influence.
Historically, Americans have been proud of building some of the world’s biggest household names and using them to spread American values through global economic success. Turning against big tech today would jeopardize the economic potential and international influence the U.S. has on the world stage. Trump’s moves against Silicon Valley are short-sighted and conflict fundamentally with the American values he claims to champion. While nations around the world are desperate to foster the next global tech business phenomenon, the Trump administration is working hard to tear down those America has built already.
Ryan Khurana is Executive Director of the Institute for Advancing Prosperity and a Tech Policy Fellow for Young Voices.