Sometimes well-intended regulations, such as antitrust agendas, can go too far to the detriment of U.S. companies and the American marketplace.
The current FTC campaign to break up certain American-owned tech firms will likely only benefit Chinese-owned companies like Huawei, Tencent, Baidu, and Alibaba. That’s not good for U.S. competitiveness.
On their face, antitrust laws can ensure fair competition among businesses operating in the United States.
Dating back as far as 1890, our U.S. Congress worked to restrict concentrations of power that might reduce economic competition in the United States with the Sherman Act. 1914 brought us the Clayton Antitrust Act and the Federal Trade Commission (FTC) Act, further laying the foundation for antitrust legislation.
To be clear, regulation has a proper place to ensure thriving fair competition in the American marketplace. To that end, the DOJ, FTC, and state attorneys general are investigating and suing problem actors like Facebook, Google, and Twitter that continue to bully, censor, use, and abuse the American people. But if we regulate American-owned companies in ways Chinese-owned companies are not subject to, American companies, American competitiveness, and ultimately American consumers stand to lose out.
Unfortunately, however, that’s exactly what’s happening today.
The FTC recently rejected the consumer welfare standard, which has served as a longtime governing commitment to only regulate business conduct that harms consumers. As a result, it’s no longer just going after the Google and Twitters of the world for stifling Americans’ free speech in the public square; it’s also trying to stop harmless companies that it doesn’t like for ideological reasons from going about their business.
For example, the FTC is trying to stop Microsoft from acquiring Activision Blizzard, which would allow the company to better compete with problem companies like Sony.
Although the Microsoft-Activision deal would help, not harm consumers, the FTC is now able to challenge it anyway since the commission has done away with the consumer welfare standard. The FTC’s blocking of this deal benefits no one more than communist China. Its company Tencent will only get stronger should the FTC not allow Microsoft this chance to become more competitive with Sony, which Tencent frequently collaborates with within the marketplace.
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Former Director of National Intelligence Dan Coats and former Defense Secretary Leon Panetta have sent letters to Reps. Kevin McCarthy and Nancy Pelosi warning of China’s quest to “undermine U.S. influence” and to replace the United States as “the world’s leading innovator.”
The last thing we need right now is legislation or regulatory action that allows the Chinese government to further support their national tech champions, which are under heavy influence and control from the Chinese government.
A December 10, 2020, Wall Street Journal article detailed, “China’s most powerful leader in a generation wants even greater state control in the world’s second-largest economy, with private firms of all sizes expected to fall in line.” This state control even funnels down to small businesses with little or nothing to do with national security. 50-year-old Li Jun, who owns a fish-farming business located in China’s Jiangsu province, says, “For us small businesses, we have no choice but to follow the party. Even so, we’re not benefiting at all from government policies.” And yet, while China continues to do everything it can to shore up its tech and economic base, we must prevent the country from running circles around us by destroying whatever domestic tech dominance we have left.
Again, regulation against American tech companies like Google, Facebook, and Twitter should be welcomed where it is needed. Our U.S. Constitution says we are to “regulate Commerce with foreign Nations, and among the several States” in Article I, Section 8, Paragraph 3.
That said, targeting our homegrown U.S. tech giants with over-bearing regulation while giving predatory industry-leading Chinese companies a pass could significantly curb innovation that is “critical to maintaining America’s technological edge,” Dan Coats and Leon Panetta argue.
If any regulatory effort involving America’s largest technology companies risks compromising our economic security or national security, we should reconsider such policies.
The late and former presidential candidate Ross Perot used to say, “Measure twice and cut once.” Let’s double-check what we propose to regulate through careful and strategic planning. If we don’t, we may end up causing unintended harm to our nation’s security, innovation, and prosperity, which may be costly to repair – or worse yet – irreversible.
About Roger Simmermaker
Roger Simmermaker has written multiple books on buying American and trade policy since 1996, and has been a frequent guest on Fox News, Fox Business Network, CNN, and MSNBC. Roger has also been quoted or featured in The Wall Street Journal, USA Today, BusinessWeek, and The New York Times, among many other publications. His new book ” UNCONSTITUTIONAL: Our Founding Fathers Rejected FREE TRADE And So Should We,” was printed in January 2020.
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