Technology

Big Tech allies point to China, Russia threat in push to squash antitrust bill

Big Tech’s numerous allies in Washington are repeating a similar message as they lobby lawmakers to abandon antitrust legislation: The U.S. needs tech giants at full strength to counter China, Russia and other threats to national security.  

The last-ditch effort comes as the Senate gears up to consider the American Innovation and Choice Online Act, a bipartisan bill that would prevent dominant digital platforms from favoring their own services and empower antitrust enforcers to scrutinize the largest tech firms. 

Despite making it out of the Senate Judiciary Committee by a bipartisan 16-6 vote, the legislation targeting America’s largest tech companies faces an uphill battle. 

Many lawmakers who gave the legislation a thumbs-up on the panel cautioned that they would be unlikely to vote “yes” on the floor unless major changes are made. 

A handful of those lawmakers specifically expressed concern that stopping tech giants from self-preferencing could unintentionally advantage America’s adversaries. 

Russian aggression in Ukraine has only reinforced those industry talking points among lawmakers who are fearful of impending cyber conflicts with Russia and China, according to tech allies. 

“When you’re talking about a geopolitical conflict, all of a sudden the terms of the debate change, both for the Democrats and the Republicans. There’s an ongoing shift as people grapple with the magnitude of the global tensions,” said Michael Mandel, chief economist at the Amazon- and Meta-backed Progressive Policy Institute, which opposes the antitrust bill. “You don’t want to be in a position of disassembling your strongest tech companies at the same time you’re fighting a tech war.” 

The argument that antitrust enforcement weakens national security is by no means new. AT&T deployed a similar defense of its power in the 1980s. 

But tech giants’ hawkish stance on China is a more recent development. Industry lobbyists and tech-backed advocacy groups on both the right and left have inundated lawmakers with calls, emails, op-eds and political ads warning that the antitrust proposal will give Beijing the upper hand in the technological arms race.  

The shift from portraying themselves as national champions to a hedge against the Chinese Communist Party has come despite many major tech companies’ big presence in China. 

Apple has shifted much of its production to China over the last decade and has established itself as a domestic seller. Meta’s Mark Zuckerberg courted China for years before decrying the Chinese internet model. Google was working to build a censored search engine that could operate in China as recently as 2017. Amazon was chastised by lawmakers last year over a contract with a Chinese company that claimed it could track Uyghurs in real time. 

But their current argument began shortly after the House Judiciary Committee published its wide-ranging report on digital marketplace competition and posits that weakening American tech companies would cut into U.S. technology leadership. 

The U.S. Chamber of Commerce, which seats Meta and Microsoft executives on its board, argued in a report published last week that legislative proposals under consideration would require affected companies to compete against Chinese government-backed companies such as Huawei and TikTok’s parent company ByteDance “with one hand tied behind their backs.” 

The Computer and Communications Industry Association, which represents the big four tech companies, argues that the bill would require U.S. tech giants to share data with foreign competitors and weaken their research and development capabilities while leaving Chinese tech firms untouched. 

“Given the current geopolitical environment, now more than ever policymakers need to be aware of the risks of undermining the U.S. competitive advantage in technology products and services,” said Matt Schruers, the tech group’s president.  

Most tech giants ramped up their lobbying presence amid the antitrust fight. Amazon and Meta each shelled out more than $20 million on federal lobbying last year, dwarfing the spending of all other companies, according to research group OpenSecrets.  

But those figures only scratch the surface of tech giants’ influence.  

Meta has disclosed funding more than 100 Washington-centric organizations, including a host of liberal and conservative lobbying groups and influential think tanks such as the American Enterprise Institute and the Brookings Institution.  

Amazon backs dozens of groups ranging from nonpartisan groups like the National Security Institute to the liberal Chamber of Progress and the right-wing Taxpayers Protection Alliance, which is running ads warning that the tech bill will “help China win in the end.” 

While Apple and Google are less active in backing Washington groups, their CEOs personally met with senators in recent months to lobby against antitrust bills. 

“With direct financial ties to the Chinese Communist Party, many Chinese companies present threats to America’s national security,” read a recent ad from the Meta-backed American Edge Project nonprofit. “But some Washington politicians are pushing for new laws that will empower Chinese companies at the expense of America’s tech innovators.”

In September, a dozen former high-ranking national security officials, including former Defense Secretary Leon Panetta and former Director of National Intelligence Dan Coats, penned a letter to lawmakers warning that antitrust proposals would empower China to become the global leader in technological innovation.

The ex-officials echoed industry groups, calling on lawmakers to study the national security impacts of regulating Big Tech before moving forward with the bill. All of those officials sported ties to tech giants in one way or another, Politico reported.

According to two K Street lobbyists with big tech clients, the industry is carrying out a tried-and-true strategy: stalling the bill in an attempt to wait out the clock until the midterm elections, which could usher in a divided and likely dysfunctional government.  

Lobbyists noted that the nomination process for Supreme Court Justice Stephen Breyer’s replacement will sap up a chunk of the Senate’s remaining schedule. Resolving the various issues that lawmakers have with the bill will also take time. 

Sens. Thom Tillis (R-N.C.) and Ted Cruz (R-Texas) both floated several amendments, although the Texas lawmaker ultimately voted to advance the bill through the committee.

Some Democrats also appeared less than convinced despite reporting the bill favorably. Both members of California’s Senate delegation, Dianne Feinstein (D) and Alex Padilla (D), raised concerns about targeting companies based in their state.  

Sen. Chris Coons (D-Del.), a top Biden ally, expressed concerns last month about “potentially unintended consequences on the competitiveness globally of our digital democracy principles on the world stage.”  

Proponents of the legislation have pushed back on the national security argument in reports and letters to congressional leadership, countering that monopolies are actually hamstringing innovation more than breaking them up would. 

“You have five companies, Google, Facebook, Amazon, Apple and Microsoft, sitting on trillions of dollars of assets and massive amounts of talent,” said Matt Stoller, director of research at the American Economic Liberties Project, contrasting that with the early software industry.  

“We are running this monopoly-heavy, top-heavy industrial strategy based on consolidating wealth and power, which doesn’t make any sense because now you only have five companies doing any innovation instead of hundreds or thousands.” 

–Updated 3 p.m.

Tags Alex Padilla Amazon Apple China Chris Coons Dan Coats Dianne Feinstein Facebook Google Mark Zuckerberg Microsoft Russia Stephen Breyer Ted Cruz Thom Tillis

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