By Doug Kelly, CEO of American Edge Project
While China and the United States are engaged in a high stakes contest for global technology leadership, America’s tech industry is coming under renewed attacks – not just from Beijing, but from European policymakers and bureaucrats in our own country. These dangerous actions at home and abroad undermine America’s ability to innovate and compete against China, and threaten to jeopardize our national security, our economic prosperity, and our values.
Europe’s Attack On America’s Tech Industry
Earlier this month, the European Union (EU) introduced stringent regulations on top U.S. tech firms via the Digital Markets Act (DMA). Five of the six “gatekeeper” companies recognized by the EU are U.S.-based. Astonishingly, the EU labeled almost no Chinese or EU tech companies as gatekeepers.
These gatekeeper designations subject companies to rigorous EU rules that don’t bind our rivals. Compliance could cost between $22 billion to $50 billion, potentially pushing firms toward China-based providers. The DMA also compels American firms to reveal proprietary data, with severe penalties for non-compliance, including massive fines and potentially breaking up the company.
New Congressional Attacks On America’s Tech Industry
A new Congressional coalition is advocating for the adoption of Europe’s DMA regulations in America. In a letter to gatekeeper companies, U.S. House members from Georgia, New York, Massachusetts, Washington State, and Vermont heaped praised on the EU’s Digital Markets Act, and then demanded that these U.S. tech companies voluntarily implement these European rules for their American operations.
This is a damaging demand by lawmakers. A DMA-USA version would mean that almost every American digital service, from app stores to cloud services, would face European-style regulation, negatively impacting nearly every U.S. consumer and small business. Additionally, for most tech companies listed as gatekeepers, their U.S. operations generate a substantially larger share of their overall revenue, meaning any EU-like fines or penalties would further subtract from research and development (R&D) efforts to keep ahead of China.
U.S. Government Agency Efforts Against America’s Innovators
Both the U.S. Federal Trade Commission (FTC) and the Department of Justice (DOJ) have taken aggressive stances against American tech. They’ve unveiled new merger and acquisition guidelines that would undermine the heart of America’s innovation ecosystem. And they use taxpayer dollars sending staff to coordinate with the EU to implement the DMA against U.S. companies.
And just yesterday, the FTC filed an antitrust lawsuit against Amazon, arguing that the company’s Prime and Fulfillment services are anticompetitive. Experts say this will be a lengthy and expensive legal battle aimed at potentially breaking up key parts of the company.
Anti-Tech Actions Are Out Of Step With Voters
Despite these stringent regulatory proposals and lawsuits, recent polls suggest policymakers are out of step with voter sentiments. A recent survey by the American Edge Project discovered that 80 percent of U.S. and EU voters believe in a united stance against tech threats from nations like China and Russia. A significant majority oppose excessive regulations that could weaken their tech sectors in global competition.
The bottom line: It’s hard enough for U.S. tech companies to compete against China, which actively steals U.S. technology and generously supports “national champion” companies. But when our own government and supposed allies pile on with additional obstacles and regulatory burdens, it not only undercuts innovation but jeopardizes the critical technological edge that has kept America at the forefront. If we truly want to remain the global tech leader, it’s imperative we recognize the challenges both external and internal, and rally behind our homegrown innovators, rather than unwittingly aid our competitors.