Tech-funded research says antitrust laws threaten national security

(Bloomberg) — Bipartisan antitrust legislation targeting Amazon.com Inc., Apple Inc., Facebook Inc. and Google owned by Alphabet Inc. could harm U.S. competitiveness and give foreign adversaries access to sensitive information, according to a new report from a technology industry group.

White Paper z Computer and Communications Industry Associationwhich all four companies own, argues that a series of antitrust bills approved in June by the House Judiciary Committee would help foreign competitors, including Chinese and Russian companies, by imposing severe restrictions only on U.S. tech giants.

Many of the article’s arguments echo warnings from technology groups and lawmakers who opposed the measures during the June hearing.

Due in part to their size and ability to innovate, U.S. technology companies are valuable partners to the U.S. government and intelligence community in the fight against global cyber threats, according to Dan Coats, a former Republican senator and director of national intelligence who now works at a law firm. King & Spalding and helped write the report.

“A lot of people are talking about the pros and cons of economic impact and innovation, which is valid, but they’re also paying attention to national security,” Coats said in an interview Friday. He urged lawmakers to consult with the House and Senate intelligence committees and federal agencies before voting on antitrust legislation, which he said could have unintended consequences.

The House Judiciary Committee has approved a series of six bipartisan antitrust bills, four of which target Amazon, Apple, Facebook and Google. It is unclear when or if these four bills will come up for a vote in the House. Senators from the antitrust subcommittee said they plan to introduce similar measures.

H.R. 3816 – Would prevent companies from preferring their own products over competitors. For example, Google couldn’t prioritize Google Maps, and Apple couldn’t give special treatment to Apple Music.
Sponsors: David Cicilline (D-RI), Lance Gooden (R-TX)

H.R. 3825 – Would prohibit companies from operating in multiple industries. For example, Amazon would have to separate its online retail sales from its logistics division.
Sponsors: Pramila Jayapal (D-WA), Lance Gooden (R-TX)

H.R. 3826 – Would restrict mergers and acquisitions for covered companies.
Sponsors: Hakeem Jeffries (D-NY), Ken Buck (R-CO)

HR 3849 – Would require interoperability so that users can transfer data such as contacts and photos between platforms.
Sponsors: Mary Gay Scanlon (D-PA), Burgess Owens (R-UT)

A spokesman for Rep. Ken Buck, the top Republican on the House antitrust subcommittee, said Apple and Google have already “let the fox into the proverbial hen house” by allowing China-related apps like TikTok and Alibaba in their app stores. Spokesman Nick Givas also mentioned steps taken by some tech companies to appease the Chinese Communist Party.

“Let’s be clear: Amazon, Apple, Facebook and Google harm U.S. competition by engaging in anticompetitive practices,” Givas said. “Our bills will create competition and protect consumers’ privacy rights.”

Arthur Sidney, vice president of the Computer and Communications Industry Association, said the committee should have spent more time understanding the national security implications before voting on the bills. He said the House antitrust subcommittee investigation that preceded the bill’s passage focused only on four U.S. companies and did not look at the conduct of foreign competitors.

“It’s not even an antitrust violation, it’s government-imposed industrial policy,” Sidney said in a telephone interview Thursday. “Because the process was so rushed, there are a host of unintended consequences that are important to consumers, society and national security.”

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While the express purpose of some laws is to limit the size and reach of these companies, the CCIA article argues that their scale helps them combat disinformation and aids law enforcement. The report cites the company’s efforts to remove foreign influence campaigns from China, Russia and Iran.

The article did not discuss platforms’ ongoing efforts to identify and remove false or nefarious content, including false claims about democratic elections and the coronavirus pandemic.

The report also expressed concern that the interoperability provisions in the laws, requiring equal access to user data and software, could threaten intellectual property and consumer security in the hands of some foreign companies. The article says this poses a cybersecurity risk “if key elements of the digital architecture underpinning the global economy become subject to compromise and espionage.”

Legislation that would force companies to divest certain business lines or prohibit them from acquiring competitors would open the door for global competitors to acquire these U.S.-developed assets and innovations, according to the CCIA report. The study shows that, freed from the restrictions imposed by the laws, foreign rivals would have a chance to overtake and displace Facebook, Google, Amazon and Apple.

Sidney said it’s exactly the same opposite the goal of another sweeping bill passed by the Senate in June to invest in American innovation and industry to counter technological advances in China.

“The United States should have friends, at least in the U.S.,” Sidney said, noting that the country’s “technology ecosystem” allows companies “to innovate, to be at the forefront and important in technology, and I think we should be proud of that and support that. “