Opinion: How can we protect American tech from ‘anti-innovation legislation’?
Our innovative companies boost America’s economy and national security. Why would we want to harm them with restrictive laws?
As Utah hosted tech leaders from around the world at its annual Silicon Slopes Summit last week, this gathering served both as a testament to the state’s vibrant tech ecosystem and as a reminder to protect and promote this vital industry. By ensuring that the United States maintains sensible pro-innovation policies, Sens. Mike Lee and Mitt Romney have played a critical role in preserving America’s technological edge.
America’s innovation is critical to our economy, national security and global competitiveness. The U.S. has become the global tech leader because of our drive to create and harness new technologies to tackle our most significant challenges and because our regulatory framework and capital markets encourage the development of those new technologies. In the same way, intense competition stimulates new ideas and provides consumers with innovative products and services.
Despite all the new technology and innovation over the past few decades, Congress is considering anti-innovation legislation that would interfere with innovation, slow economic growth, hurt American consumers and hamstring startups.
Rightly dubbed anti-innovation legislation, these bills target a handful of U.S. tech companies — companies that have brought to market some of the most innovative technologies of our generation — simply because of their size. A recent paper by a leading antitrust expert, Koren Wong-Ervin, outlines how these proposals shift away from a standard that protects consumers and competition to one that gives regulators much more control over the economy based on subjective standards. Wong-Ervin rightly concludes that our existing antitrust laws are fully capable of addressing any genuine competitive problems.
These proposals would also lead to higher prices. As the paper explains, “Even more troubling, in a time of already growing inflation, the proposed standards would protect inefficient companies from market forces — a development that could lead to higher prices for consumers.” Another report found these plans would harm consumers and threaten economic growth at a cost of $319 billion by restricting business methods and the availability of free products and services. According to recent research by Dartmouth economist John T. Scott, these bills would amount to a “regulatory tax” on small businesses of 5.2% of their sales, or an average of $1,712 per small business seller per month. Small businesses need these tools to succeed — they were a lifeline during the pandemic.
No wonder that, with the cost of living, inflation and gas prices going through the roof, voters rank anti-innovation legislation as a low priority and believe it will harm our economy and national security.
Perhaps most importantly, these bills would constrain the ability of the United States to counter the growing national security threat of China. Americans and our allies across the Atlantic are rightly concerned about Chinese and Russian technology gains and how they threaten our collective security. A new survey by the American Edge Project finds that voters on both sides of the Atlantic see China and Russia as economic and security threats that could place our technological edge at serious risk.
Utahns understand that these excessive tech regulations would lead to higher prices and fewer choices for consumers, deter spirited and vigorous competition, and create different rules for American companies while imposing no restrictions on most foreign companies. That’s why three of Utah’s chambers of commerce signed a letter opposing these bills.
Federal antitrust laws are in place to protect the competitive process and consumers, not to dictate market outcomes. These anti-innovation bills could jeopardize spirited competition while slowing innovation and diminishing the opportunities available to consumers, small businesses and entrepreneurs. In these already difficult times, Congress ought to trust the existing antitrust laws, which have protected consumers for decades, and focus instead on managing inflation, strengthening our economy and protecting our national security.
Asheesh Agarwal is an adviser to the American Edge Project and is a former U.S. Department of Justice and Federal Trade Commission official.