Op-ed: Censorship and higher taxes won’t create more Apples, Amazons, Facebooks and Googles – CNBC

Facebook CEO Mark Zuckerberg testifies before the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law on "Online Platforms and Market Power" in the Rayburn House office Building on Capitol Hill in Washington, DC on July 29, 2020.

Mandel Ngan | AFP | Getty Images

The House Judiciary Committee held an antitrust hearing on Wednesday with the CEOs of four of the largest U.S. technology companies Amazon, Apple, Facebook, and Google to determine whether they have grown too large (i.e., are "too successful"), and therefore, should be broken up.

Democrats on the Committee suggested that these companies' success threatens the free market and even democracy itself. Numerous Republicans raised concerns about their alleged political bias as well as their size.

Meanwhile, in China, the government is taking an opposite course. Instead of attacking its "national champions," China is showering them with government subsidies and discriminating against "would-be" competitors to great effect.

Ten years ago, nearly all of the top technology companies and start-ups in the world were American. Now, China has nine of the top 20 technology companies and four of the top 10 start-ups. And this trend appears likely to continue.

China recently passed the United States in the number of global patent applications and is on track to eclipse U.S. research and development spending in the next two years, according to the Organisation for Economic Cooperation and Development.

As policymakers on the Right and Left increasingly proclaim the importance of out-innovating China in critical technologies, their comments during yesterday's hearing raise an important question which companies will they actually let play that role?

Ten years ago, nearly all of the top technology companies and start-ups in the world were American. Now, China has nine of the top 20 technology companies and four of the top 10 start-ups. And this trend appears likely to continue.

Amazon, Apple, Facebook, and Google are not the only important U.S. technology companies, but they spend a disproportionate amount on research and development in key areas like artificial intelligence, quantum computing, and robotics. They are also leaders on privacy and security technology, an area where China poses a particular threat, and they provide communication alternatives to less secure Chinese competitors. Mere search engines and social networks they are not.

Moreover, all four companies are uniquely American. They were built from the ground up by hard-working middle-class entrepreneurs, they revolutionized their industries, and they provide platforms to expand American influence and ideals like free speech around the world.

So rather than tear down our most innovative and most American of companies, let's build them up and others like them to stay ahead of China. How to begin?

First, let's stop attacking success to score political points. Policymakers should always question potential monopolistic behavior and make sure that a diversity of opinions are allowed to thrive online, but much of Big Tech's recent scrutiny appears populist in nature either intended to bolster "anti-corporate" credentials or to admonish the political views of their CEOs and employees.

The consequences of this "loose talk" is real it threatens American jobs at these companies, discourages other would-be risk-takers from setting out on new ventures, and provides cover for other countries to target U.S. business. After all, if U.S. policymakers are attacking Big Tech, why shouldn't their counterparts in China and Europe do the same? Instead of needlessly hurting our most innovative companies, let's champion their ingenuity and encourage others to replicate it.

Second, let's use the size of these companies and the unique skill sets of their workers to the government's advantage. Let's harness their cross-cutting strengths through public-private partnerships and joint R&D programs in critical technologies so the United States (and the U.S. military) remains the global leader. When policymakers consider their options for a modern U.S. industrial policy, working with and further strengthening these American champions is exactly what they should be doing.

Third, let's tread carefully when it comes to circumscribing the activities of these and other U.S. companies abroad. There are areas where our companies should not be permitted to engage, such as helping China improve its military capability. But one of the best ways for America to stay ahead of its global competition is for our companies to sell more in markets like China so they can spend more on innovation in the United States.

Fourth, let's forcefully back these companies against unfair practices abroad, whether it be unacceptable pressure from China to censor their activities or opportunistic targeting from France for tax revenue. Such pressure is very difficult for companies to combat alone, and they shouldn't be criticized for trying. Rather, the U.S. government should stand by their side and help them to compete fairly in these crucial markets, not encourage them to disengage.

Finally, as we continue to push back against the unfair practices of others, let's not emulate them ourselves. Censorship and higher taxes are not the way to create more Apples, Amazons, Facebooks, and Googles. And using anti-trust tools for political purposes a trick right out of the Chinese playbook will certainly not help win the defining global competition of our time.

Clete Willems is a partner at Akin Gump Strauss Hauer & Feld, the former Deputy Director of the National Economic Council (2018-2019), and proudly represents innovative U.S. tech companies.

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Op-ed: Censorship and higher taxes won't create more Apples, Amazons, Facebooks and Googles - CNBC