Election-Year Attacks on Big Tech Will Undercut Peace and Prosperity
It’s election season. Politicians at both the federal and state levels are looking for ways of bolstering their reelection prospects. One way of doing this is to stage public spectacles, the modern version of ancient Rome’s gladiatorial games, designed to gain support for politicians from average voters. The most recent example of this strategy in action has been a campaign of attacks on so-called Big Tech: companies such as Facebook, Amazon, Apple and Google.
There have been antitrust investigations and even calls to break up these tech giants. Whether it is lawsuits by state attorneys general or hearings before congressional committees, the goal is to demonize these companies primarily for their success. The trouble is that in seeking to score near-term political points, these politicians are not only maligning great American companies but threatening the nation’s economic health and national security.
On Wednesday, July 28, the subcommittee on Antitrust, Commercial, and Administrative Law of the House Committee of the Judiciary held a hearing titled “Online Platforms and Market Power, Part 6: Examining the Dominance of Amazon, Apple, Facebook, and Google.” The tone for the hearing was set by the subcommittee chairman, Representative David Cicilline, who characterized the witnesses, each the president or chief operating officer of one of these tech companies, as "emperors of the online economy."
Calls to tax, regulate, and even break up Big Tech companies are part of a large backlash against the impact of advanced information technologies in what has been termed a “techlash.” This is a reaction to the U.S. economy’s and society’s evolution away from an industrial age model that emphasized the production of things to one based on the acquisition and exploitation of knowledge. The technological shift has been mirrored by changes in the way individuals, groups, companies, economic sectors, militaries, and even governments behave and are organized. While such a tectonic shift in economic activity means that some companies disappear and some jobs are lost, history demonstrates that these changes generally improve overall economic performance, lead to significant job creation, and enhance people’s lives.
Scale means something different in a world driven by IT than it did in the industrial age. Metcalf’s Law dictates that the value of a network is proportional to the square of the number of nodes on the network. This means that the more users join a network or make use of a service, the more value it has for everyone. The reason for this is access. What Big Tech companies provide is not just goods and services but access. This is access to information, software tools, sellers, consumers, friends and family. Scale and access are closely connected. Without scale, all users of IT platforms are inevitably harmed. For example, Apple created a market that now allows owners of that company’s technology to access some 1.5 million apps, creating thousands of thriving software businesses and benefiting hundreds of millions of users.
The U.S. military sees increasing the scale of its networks and improving access by all its personnel to information critical to modern warfare. The Department of Defense wants to reduce the number of different networks and software programs it employs in order to become more efficient, improve cybersecurity, and take action more rapidly. Pentagon programs such as the Joint Enterprise Defense Infrastructure and the Defense Enterprise Office Solutions are intended to connect millions of uniform and civilian Pentagon workers, military platforms and even individual weapons systems, allowing them to share data and make better decisions. Scale and access to networks, software and information matters in the creation of an advanced, integrated military. The U.S. military benefits from the networks, products, services and data provided by Big Tech, including commercial items.
Access has been particularly important to improving personal and collective security during the current pandemic. As physical interactions were restricted, access online to information and products helped keep this country functioning. Big Tech also helped sustain U.S. businesses. As Google CEO Sundar Pichai pointed out in his prepared remarks on Wednesday, "Nearly one-third of small business owners say that without digital tools they would have had to close all or part of their business during COVID.”
Imposing antitrust penalties on U.S. technology companies will do more than just harm U.S. businesses and individuals. It will also advantage their foreign competitors, largely Chinese IT companies such as Alibaba, Baidu, ByteDance, and Huawei. These companies are seeking to increase their scale and their access to consumers at the expense of American and other foreign competitors. Given that Chinese companies are largely under the sway of the government in Beijing, U.S. national security, as well as economic well-being would be harmed should they become dominant globally.
Amazon, Facebook, Twitter and Google are quintessential American economic, cultural and personal success stories. They were founded and became successful in that unique environment that is the U.S. commercial economy. The reasons for the success of these high-tech companies, and many thousands more of less substantial size, were well articulated by Amazon’s Jeff Bezos in his prepared statement to the subcommittee:
“It’s not a coincidence that Amazon was born in this country. More than any other place on Earth, new companies can start, grow, and thrive here in the U.S. Our country embraces resourcefulness and self-reliance, and it embraces builders who start from scratch. We nurture entrepreneurs and start-ups with stable rule of law, the finest university system in the world, the freedom of democracy, and a deeply accepted culture of risk-taking.”
Reducing scale and limiting access by breaking up companies such as Google, Facebook and Amazon or imposing limits on their legitimate and lawful activities would inevitably cause great harm to this country and its citizens. In an era of intensifying political-military competition with rising powers such as Russia and China, it also could negatively impact national security and even place the lives of U.S. warriors at risk.
Dan Gouré, Ph.D., is a vice president at the public-policy research think tank Lexington Institute. Gouré has a background in the public sector and U.S. federal government, most recently serving as a member of the 2001 Department of Defense Transition Team. You can follow him on Twitter at @dgoure and the Lexington Institute @LexNextDC. Read his full bio here.