JAMISON: Sens. Klobuchar and Grassley show why Congress should not pass Big Tech legislation

By Mark Jamison

America’s founders held a belief that is rare in political leaders these days — namely that they should not be trusted with power. That is a mark of greatness, as King George III of England noted: Upon being told at the end of America’s Revolutionary War that the victorious and immensely popular Gen. George Washington was going to step down rather than seek to rule the country, the king said, “If he does that, he will be the greatest man in the world.”

Our founders’ self-awareness and humility remain rare traits in today’s political class and those adjacent to it. For example, many in Congress and the Joe Biden administration appear to honestly believe they possess such depth and breadth of knowledge that they can redesign — and in doing so improve — an industry, namely tech, that has risen to unprecedented levels of achievement by improving the effectiveness of every other industry and societal institution.

The latest demonstration of this overconfidence is the American Innovation and Choice Online Act, introduced by Sens. Amy Klobuchar (D-MN) and Chuck Grassley (R-IA), plus a few cosponsors. It targets selected Big Tech companies and seeks to redefine their products and business models and to transfer to rivals Big Tech assets that the companies have built. For example, it would require Big Tech platforms to:

  • Give some of their brand value over to rivals by prohibiting Big Tech platforms from promoting their products or services over rivals’;
  • Donate software features they have created to rivals and limit future innovations by requiring interoperability with other businesses’ products or services;
  • Weaken the cybersecurity of Big Tech products by allowing others greater access to their software and hardware;
  • Give rivals preferred product placement without requiring that rivals also have other business relationships with Big Tech firms; and
  • Hold back Big Tech firms’ own innovations by prohibiting them from using private knowledge that they gain in providing their platform services.

The sponsors make the usual claims that they are reining in Big Tech and promoting open markets, fairness, choice, and innovation. But many knowledgeable people disagree. As researchers at the International Center for Law and Economics explain, the bill would suppress innovation, turn valuable platforms into “dumb pipes” that consumers consistently reject, and invite further politicization of antitrust. The bill’s underpinnings are also based on fallacies: The authors are wrong on the intensity of competition in tech markets and in their belief that the US should be more like Europe, whose laws and policies discourage the development of successful tech companies. Experts at the Information Technology and Innovation Foundation also note that the bill unfairly restricts a select handful of companies from improving what they do for consumers, while exempting “big rivals, many of which are foreign, from the same restrictions.”

Writing more generally about congressional attacks on Big Tech, my AEI colleague Shane Tews points out that folks in Congress have a “cognitive dissonance [that] reflects a dangerous trend of lawmakers saying one thing and doing another when it comes to digital platforms.” Congress is spending billions of dollars in tech research while at the same time pushing “proposals that would devastate American tech companies,” as Tews states.

The significant differences of opinion between lawmakers and many tech experts, the micromanagement in the Klobuchar-Grassley bill and other proposed legislation, and the contradictions in these lawmakers’ statements and proposals demonstrate that lawmakers are not in a position to pass productive antitrust legislation. They should take a more realistic view of the limits of their knowledge and abilities. Such a viewpoint would likely lead to legislation that:

  • States that the purpose of antitrust is to benefit consumers by protecting market processes, effectively codifying the consumer welfare standard;
  • Ensures antitrust agencies have adequate resources for economic and technical analyses; and
  • Targets barriers to competition.

The last bullet is particularly important for the tech industry. Traditional antitrust analysis studies historical market performance to find abuses of market power. The tech industry changes too fast for such analyses to be relevant for decisions about the future. A more productive approach would be to identify sources of market power and address them, perhaps even before any market power emerges.

Current lawmakers’ submission to a number of logical fallacies, such as hasty generalization, and cognitive biases, such as “what you see is all there is,” is understandable in that it is quite human. But our founders were able to overcome such fallacies and biases in developing a legal system intended to restrict the power of government. Our current lawmakers would do well to follow in that tradition.

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