How Antitrust Law Threatens US Competitiveness and National Security
Today, American companies are the envy of the world because they have the freedom to invest, innovate, evolve and compete – and American antitrust laws have long been the foundation for success. American economy, leading to world-class innovation, products and services. .
The strength of US antitrust law has long been its simplicity. The law applies to all companies and is designed to eradicate anti-competitive behavior in order to induce market forces to generate better economic results and innovation. The alleged anti-competitive conduct is assessed to determine if consumers are harmed or if there are offsetting benefits to the conduct in question that, taken as a whole, provide net value to the consumer.
So what’s the problem?
All of that would change if the pending antitrust legislation becomes law. These proposals specifically target large US companies, while doing little to actually protect consumers. The current legislation would oblige the companies concerned to provide their competitors with equal access to their platform; ask them to share user data with other companies; prevent them from making certain new acquisitions or investments; and could even split them into smaller companies, which means less money for cutting-edge research and development and less American technology leadership.
Legislation will manage rather than promote competitive outcomes in the marketplace. But the impact goes beyond reshaping our national economy, it will also serve to undermine our global competitiveness and national security.
Why is this important?
Today, the global balance of power will be determined by who leads the development of future technologies such as artificial intelligence, quantum computing, semiconductors and the next generation of 5G telecommunications technologies. America’s advantageous position depends on the success of the private sector in ensuring not only our economic vitality, but also in securing the technological advantage necessary to protect our national security.
In a new report, the US Chamber of Commerce outlines how proposed changes to US antitrust law would change the global landscape given evolving industrial policy in China and Europe.
In China, technology policy is specifically designed to ensure their companies every possible advantage in their quest for global dominance. Chinese tech giants operate in a protected domestic environment, free from foreign competition, and they are encouraged to expand aggressively into overseas markets.
In Europe, policymakers are pursuing the path of “technological sovereignty” through a series of industrial policies, including the Digital Markets Act, the AI Act and the Data Act. He further set out to energize European tech companies while limiting the success of US competitors by building a “European” cloud with his Gaia-X project and enacting a proposed subsidy regime.
Efforts in China and Europe directly or indirectly cripple American companies, while boosting national champions. Yet some members of Congress blindly support antitrust changes that would serve to further open the way for foreign rivals to overtake major US companies.
If this legislation were to become law, it would not only require captured companies to support their domestic competitors, but it would also require them to provide privileged access to foreign competitors. All of this will not be lost on the rest of the world, as the United States will effectively greenlight a wave of additional legislative and regulatory measures in countries around the world, adding to the list of constraints we will have imposed to our own leading companies.
Our opinion :
The United States is poised to continue leading the world in technological innovation. For decades we have proven that when American businesses are allowed to innovate, grow, and compete openly in a free market, they have an advantage over those operating under state control. However, we stand to lose everything we have gained if we turn antitrust into a form of economic regulation that targets major US tech companies and effectively forces them to help their foreign competitors.
The United States Chamber of Commerce supports vigorous enforcement of antitrust laws. No company should be immune to antitrust scrutiny, but America cannot afford to rewrite US antitrust laws to attack its own strongest assets. This is the definition of self-destructive.
What other experts say:
Last year, professors from the Fuqua School of Business at Duke University find that US antitrust laws would discourage US companies from investing in strategically vital technologies and instead pave the way for foreign rivals to overtake them.
In one recent letter in Congress, 12 former US national security officials have expressed serious concerns about the legislative proposals, saying: overseas, and potentially putting sensitive US data and intellectual property in the hands of Beijing.
What can Congress do to promote America’s long-term global competitiveness?
Congress should reject these legislative proposals and consider adopting the following strategies that would allow America to remain a world leader:
Operate according to the fundamental principle of “do no harm”. Congress should avoid licensing foreign jurisdictions that target the hard-won comparative advantage of US companies.
Market capitalization should not be a legislative or regulatory trigger for targeting companies.
Adopt narrowly tailored responses to well-documented concerns of the digital economy through targeted regulation, without changing antitrust laws that target particular companies.
Address the rapidly accelerating market distortions that result from non-market policies, including excessive concentrations under state ownership and influence. Congress should bolster the U.S. government’s toolkit in combating non-market economy practices globally.
Institute regular briefings from the U.S. national security community on China’s approach to antitrust, data, standards, and impactful technology development and acquisition policies on US competitiveness, innovation and national security.