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The European Commission’s proposed Digital Markets Act (DMA), currently under discussion in the European Parliament, poses a direct threat to the competitive position of large U.S. tech companies by imposing a wide range of prohibitions and obligations on them. Andreas Schwab, the European Parliament’s Rapporteur on the proposal, made clear that is the point when he said: “Let’s focus on the biggest problems, on the biggest bottlenecks. So, let’s go down the line—one, two, three, four, five—and maybe six with [China]’s Alibaba… But let’s not start with number seven to include a European gatekeeper to please Biden.”
It was in this context that a day after the launch of the recent EU-U.S. Joint Technology Competition Policy Dialogue, Secretary of Commerce Gina Raimondo said the Biden administration is concerned about the extent to which the DMA harms U.S. tech companies at the benefit of rivals, especially Chinese tech rivals, a concern ITIF shares. Secretary Raimondo noted that “we have serious concerns that these proposals will disproportionately impact U.S.-based tech firms and their ability to adequately serve EU customers and uphold security and privacy standards.”
Consequently, Secretary Raimondo’s courageous and wise speech must be applauded—not only because it voices a genuine concern for the harm the DMA will do to U.S. tech companies, U.S. workers, and the overall U.S. economy, but also because she grasps the considerable competitive gains that the DMA will grant Chinese tech rivals.
But rather than applauding, Neo-Brandeisians attacked Secretary Raimondo. Leading the charge, the American Economic Liberties Project even had the temerity to impugn Secretary Raimondo’s motives when they wrote: “We have serious concerns about Secretary Raimondo’s judgment… For too long federal policymakers have worked in C-suite executives at the expense of small businesses, innovative entrepreneurs, workers, and consumers. Secretary Raimondo should not be continuing that tradition.” Similarly, Sen. Elizabeth Warren (D-MA) tweeted that Raimondo was “wrong” and “should stop defending these monopolists from scrutiny and contradicting [Biden]’s policy.”
In their quest to radically rework U.S. competitiveness policy to knee-cap large corporations, Neo-Brandeisians dismiss any concerns about competitiveness. Lose your job because the corporation you were working for was broken up and went out of business to Chinese competitors? Don’t worry, you can be an influencer on TikTok, they imply, as they try to cow into silence Biden administration officials who are doing their job.
Ever since Commerce was established in 1903, its role has been to support businesses which, in turn, support jobs, consumers, and national prosperity. It is a key role of a secretary of Commerce to speak up for U.S. superstar firms that generate tens of billions of dollars of research and development annually to produce economically beneficial innovations and that remain the most admired firms by consumers. Secretary Raimondo is right in wanting to ensure that fair rules apply to U.S. tech companies, as to any other U.S. company.
Neo-Brandeisians disparage legitimate concerns for U.S. competitiveness. Instead, relying on dubious theories and faulty research, they advocate for a policy techlash that would effectively undermine it by inflicting harm on big U.S. tech firms without helping small businesses or consumers. And faced with resistance to their agenda from Raimondo, they defend the European Union’s regulatory proposals as models.
Secretary Raimondo’s speech calling out the considerable unintended consequences of the DMA was necessary and long overdue. The Biden administration should push back against domestic efforts to mimic the European Commission’s DMA because they would likewise harm U.S. competitiveness.