Crushing Tech Innovation Will Weaken U.S. Competitiveness With China

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About the authors: Bill Evanina is founder and CEO of the Evanina Group and serves on the Advisory Board of the National Security Institute at George Mason University’s Antonin Scalia Law School. He previously served as the director of the National Counterintelligence and Security Center and chief of the Central Intelligence Agency’s Counterespionage Group, assistant special agent in charge of the FBI’s Washington Field Office, and as an FBI agent. Jamil N. Jaffer is the founder and executive director of GMU’s National Security Institute. He previously served as a senior executive at a publicly traded cybersecurity company and in national security roles including as the former chief counsel and senior advisor to the Senate Foreign Relations Committee, senior counsel to the House Intelligence Committee, counsel to the assistant attorney general for national security, and associate counsel to President George W. Bush.

In the D.C. swamp, it is fashionable today to bash the so-called big tech companies. Whether one is an unreconstructed liberal or a hardcore right-winger, it is an article of faith for many that new laws or regulations that go after America’s largest technology companies are the right thing to do. The motives vary. Conservatives are often worried—sometimes for good reason—that certain social or mainstream media companies might actively seek to suppress or quiet conservative voices. On the liberal side, there are a range of legitimate concerns with technology companies, including the displacement of traditional labor in the new gig economy. There are those who believe that big tech is not doing enough to combat misinformation, disinformation, and conspiracy theories, while others see efforts to combat such threats as cover for the suppression of free speech and the rise of Big Brother.

Yet rather than tackling these concerns directly by going after the specific behaviors or actions that trouble ordinary Americans, politicians in Washington have chosen instead to vilify some of our most successful companies and to go after them economically. Congress could easily take up the question of whether technology platforms ought to be liable for the content they host or whether certain workers in interstate commerce deserve more robust protections. Instead our leaders have chosen to take a page from our allies in Europe. Specifically, efforts currently on the move in Congress seek to target a small subset of American companies—including some of the most innovative technology leaders globally—for special treatment. 

This selective attack on American companies is deeply unwise. First, these bills seek to take a baseball bat to our most successful, productive, and innovative industry—technology—at a time when we are in the heat of a massive global competition for economic and political primacy with China. Destroying the economic, jobs, and R&D engine that is big tech because of political concerns that could easily be addressed in other ways would be a bad idea in the best of times. Doing so while we watch the Chinese government pour resources into their technology industry—and as we face potential economic challenges—is unconscionable. 

Moreover, picking and choosing individual companies to be treated differently than others under our antitrust laws is inconsistent with the heart of our economic system, which seeks to reward innovation and success, not penalize them. Our antitrust laws—based at their core on promoting consumer welfare—have long been agnostic on the specific companies they address, looking not to the size of corporate revenue or profits nor alleged bad behavior in areas outside the economic domain, but rather to whether they use their market power to unfairly exclude others or harm competition. 

This tradition is responsible for creating the most successful and innovative economy in modern human history. Instead of maintaining it, a bipartisan coterie of members of Congress today seeks to take out their frustration with tech companies by forcing them to do all manner of unusual things, like allowing competitors deep access to their hardware and software, requiring them to bypass traditional security controls in the name of interoperability and providing “open access.” And while the devil is in the details, suffice it to say that requiring American technology companies to open up their highly valuable systems and processes to all manner of foreign competitors, apps, and developers, is nightmarish—if not wholly irresponsible—from a national security perspective. And it remains a huge problem regardless of whether these types of security gaps are created by legal requirements imposed on corporate servers, social media platforms, consumer devices, app stores, or in the cloud. This concern is only amplified given what we know about the Chinese Communist Party’s successful efforts to steal intellectual property (estimated to cost up to $600 billion per year, according to a blue ribbon commission and the U.S. Trade Representative), not to mention the efforts by China and other adversaries to obtain sustained access to American critical infrastructure and government systems for nefarious purposes. 

The European Union popularized this regulation-driven approach in modern times. It is a recipe for economic disaster. It is no surprise that the rate of technology innovation in Europe doesn’t hold a candle to the United States. Nor is it a surprise that the world’s most successful technology companies—large and small alike—as well as the leading venture capital firms and private equity funds that back and scale innovative ventures are housed not in Europe but here in America. This is principally because the U.S. has historically taken a much more business-friendly approach to technology development than the Europeans. We ought not take a step backward and head in the same direction as our friends on the other side of the Atlantic.

This is not to suggest that American companies—including the big tech players—don’t behave badly at times (they do), nor that efforts shouldn’t be taken to rein them in when they do (we should). Rather, the key point here is that delivering an economic death blow—essentially knee-capping America’s best assets in the competition with China—principally for political reasons is not the right answer either. To the contrary, the government must incentivize the kind of behavior we want to see out of the companies and create opportunities for them to scale their operations up internationally as we push forward on the effort to out-innovate and out-compete the Chinese. We are already playing on an unfair playing field with China, let us not hand them easy wins to the detriment of our economic dominance and prosperity. 

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