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Sen. Elizabeth Warren recently wrote that as president, she would “make big, structural changes to the tech sector to promote more competition” by breaking up American tech companies. Warren’s proposal notes that she wants to regulate Amazon and Google as “platform utilities.”
The concept by Warren to regulate tech companies goes beyond net neutrality proposals. It would have the government interfering in and taking control of the business operations of America’s crown jewel companies. It didn’t work in Venezuela, and it won’t work here. Her proposal even goes beyond the fuzzy European Union antitrust law, as it uses antitrust as regulation and burdens leading companies with unpredictable responsibilities.
The U.S. economy is strong because we are home to scores of companies that have greatly improved the lives of millions of people, whether it’s free, immediate access to information or providing greater economic opportunities. Our companies and our innovation is the envy of other nations.
This didn’t happen by magic: Our nation took calculated risks and passed thoughtful laws that have allowed innovation to flourish. Our laws encourage new businesses and don’t overregulate. The technology industry is the linchpin of the U.S. economy. The industry is responsible for more than 18 million U.S. jobs and represents 12 percent of U.S. GDP, according to an upcoming Consumer Technology Association economic impact study.
The misconception by policymakers that monopolies exist in today’s tech sector is dumbfounding – competition there is fierce. And three indicators challenge Warren’s assumption: our record levels of R&D investment, the thriving U.S. startup scene and the fact that Americans love their technology services – as well as view the tech industry more favorably than they do politicians. By hobbling these companies, we endanger the American economic miracle.
We caution any policymaker – especially one running for president looking to score cheap political points – to resist following the EU and others in unfairly targeting U.S. tech companies.
Europe isn’t exactly the beacon of innovation that we should follow. According to our research, International Innovation Scorecard, Europe has produced only 28 unicorns – companies valued at $1 billion – in a decade, while Americans have produced five times that amount.
And let’s not forget the lessons of the past.
Microsoft and IBM each floundered as our own government confounded their leadership with vague antitrust theories. In retrospect, the government was wrong as the technologies they created leapfrogged these so-called monopolists. While each company eventually recovered, the lesson we must remember is that the marketplace replaces bad players, especially in the internet space where financial barriers to entry are lower.
Today, our government has a shared opportunity to work with the tech industry to protect our nation, safeguard liberty and ensure our children’s economic future.
But Warren’s rhetoric doesn’t seem interested in building our future, especially for her home state. Her misguided proposal threatens 535,320 tech jobs that generate $73 million in GDP. Suggesting to break up tech companies is a losing proposition for her state residents, innovation, our economy and for users who would be deprived of services they rely on and enjoy.
Top-down rules restricting flexibility or creating new barriers to entrepreneurship and innovation will only bolster businesses in other nations. A definite winner here would be Chinese President Xi who is pouring billions into the race to catch our tech champions. He is probably overjoyed to hear that our political leaders are proposing a massive act of economic self-sabotage.
We need U.S. policymakers to promote, not attack American innovation and ingenuity. That means sticking to a framework of fair, free and open markets and working with U.S. tech companies to ensure consumers and competition are protected. Any proposal rooting against the American tech industry is not a winning presidential strategy.
Gary Shapiro is president and CEO of the Consumer Technology Association, the U.S. trade association representing more than 2,200 consumer technology companies, and a New York Times best-selling author. His views are his own.
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