Dear D.C.: Stop Following Mao's 'Little Red Book' on Antitrust

Opposition to China’s increasing belligerence might just be the only issue of bipartisan agreement left in Washington. Both Donald Trump and Joe Biden campaigned on being tough on China during the last election. Biden won and took that commitment with him to the White House. Senators and Congressmen from left, right and center all seem to agree that Chinese authoritarianism is wrong and that America must set an example of freedom to counter China’s rise.

So why are American politicians adopting tactics that would be straight out of today’s version of Chairman Mao’s “Little Red Book” — the Bible of the Chinese Communist Party?

Senators Amy Klobuchar and Chuck Grassley, a Democrat and a Republican, have combined forces to introduce legislation advanced by the Senate Judiciary Committee last week that would stop tech companies from marketing their own tools on their platforms. Klobuchar and Grassley call this “abusing their gatekeeper power by favoring their own products or services, disadvantaging rivals, or discriminating among businesses that use their platforms in a manner that would materially harm competition on the platform.”

This is the latest salvo in the war against Google, Amazon and other so-called “Big Tech” companies being waged by Democrats and Republicans in the name of “antitrust.” But what left-wing progressives and right-wing populists miss in their regulatory frenzy is that antitrust laws have not been used intentionally to destroy success, as they are being deployed now. Their goal for decades has been to ensure competition in the marketplace.

That’s what makes Klobuchar and Grassley’s legislation so, in a word, weird. It intends to punish tech companies for doing what other American corporations do all the time: diversifying their offerings by promoting their own branded products. Nobody complains when Target or Walmart offers shoppers products from their own store brands. When a search for a foreign word on Google automatically directs a user to Google Translate, the principle is the same. Nobody is forced to use Google Translate, and can easily navigate to any other translator of their choice, just as a Walmart shopper can bypass the store brand towels and buy whatever brand they want.

Companies offering store brands is healthy for competition — and just because tech companies do it doesn’t make it a sinister attempt at “dominance.” Indeed, our perception of “dominance” in markets is fleeting. The left once made Wal-Mart its archvillain; today, Amazon and Google are their too-successful boogiemen. Tomorrow, you can be sure there will be some new company whose dominance appears inevitable to our perpetually-alarmed bureaucratic class. Yet, the American consumer is more powerful than ever to unsubscribe, log off, and shop elsewhere. It is the consumer, with their ability to make choices and put their dollars behind them, who is truly dominant.

Meanwhile, in authoritarian China, the Communist Party is busy punishing its country’s most successful companies in the name of antitrust. Unsurprisingly, China has recently announced it is looking to further bolster its antitrust bureaucracy in order to limit the influence of companies on society. The CCP is cracking down on companies both because they view corporations as potential threats to their political power and because they're afraid that economic freedom will lead to a more open, tolerant society. That’s why, for example, they're cracking down on companies that depict homosexuality in shows or games. 

To be sure, these are not the motivations of the American politicians wielding the antitrust hammer against Big Tech’s nails. But the similarity in tactics, and likely outcomes, should give anyone pause. A better plan than crippling American companies at a time when our economy is still struggling to recover would be to radically change the equation: stop the division and focus on multiplication. End this obsession with breaking up a few companies and instead create environments to empower many more. Twenty-five more Amazons would mean even faster last-mile delivery and more selling avenues for tens or hundreds of thousands of small businesses. Twenty-five more Googles would mean sorting knowledge faster.

There’s a role for government to play in this, too. But instead of hampering companies with regulations, government should enthusiastically embrace strategic public-private sector collaborations on cutting-edge innovation, encouraging American companies to push into new frontiers like advanced manufacturing, automated vehicle infrastructure, artificial intelligence, and clean energy innovation.

China is trying to show the world that their authoritarian system is more effective than American freedom - that their way of doing things is the future. We’re not going to beat them by adopting their tactics. Only by unleashing American innovation — rather than tying it up with red tape — can we leave the armies of Chinese bureaucrats in the dust.

Bret Jacobson is co-founder of Red Edge, a leading digital advocacy agency for companies and nonprofits.