Senators, Beware of Klobuchar’s Antitrust Boomerang Bill It’s Not Good or What it Seems

It might seem a risk-free gesture that would only damage remarkably unpopular companies with the left and right. But this bill would do deep damage to consumers and national security

By Robert H. Bork, Jr.

Senate Majority Leader Chuck Schumer recently told donors there will be no vote on Sen. Amy Klobuchar’s American Innovation and Choice Online Act, her signature Big Tech regulation bill. But Klobuchar is refusing to let Schumer off the hook, tartly reminding the majority leader that his “word” is at stake.

I believe Klobuchar will get her vote. Why? Because of Republican support, starting with Sen. Chuck Grassley, who is also publicly challenging Schumer to schedule a vote. The real question is why Republicans support this progressive legislation.

Perhaps Grassley, the seven-term Iowa senator, sees Klobuchar’s bill as a way to widen his appeal. His colleagues would be well-advised not to follow him. If enacted into law, this progressive proposal will inflict hideous penalties American voters and consumers will feel almost immediately.

It is easy to see why politicians are tempted to vote for this bill, which would outlaw Big Tech companies from preferencing their products and mandate interoperability with other companies. It might seem a risk-free gesture that would only damage remarkably unpopular companies with the left and right. But this bill would do deep damage to consumers and national security.

First, this bill targets America’s most highly valued companies – Amazon, Apple, Meta/Facebook, Google, and possibly Microsoft – by transforming core business units into public utilities. It would force them to reveal their algorithms and open their platforms to competitors. At a time when tech stocks are plunging, the forced devaluation of Big Tech would evaporate trillions of dollars in equity value held in millions of retirement accounts.

Second, this “pro-competition” bill would almost certainly make inflation worse. Jessica Melugin of the Competitive Enterprise Institute asks why consumers need Congress to protect us “from items like Amazon’s lower-priced batteries being featured higher up in their search results than Duracell’s.” Meanwhile, consumers would lose access to popular services like Amazon Prime, AmazonBasics, and Google Maps.

Third, and worst of all, this law would create a national security and privacy nightmare. It would mandate that cloud computing companies, such as Amazon’s AWS, Google Cloud, and Microsoft Azure to give international companies free access to their hardware, software, and operating systems. Responding to criticism that this “interoperability” measure would expose personal, corporate, and governmental data to the Chinese Communist Party and other hostile actors, Sen. Klobuchar amended her bill with a vague exclusion of companies that pose “clear national security risks” and those with links to China. 

But it beggars belief to assume that our data, once in the global wild, would not find its way to China’s intelligence agencies. FBI Director Christopher Wray recently appeared with his MI-5 counterpart in London to warn of China’s “elaborate shell games” in which it deceives markets about Chinese control and infiltration of seemingly Western companies.

Consider what such forced sharing would mean. Google Cloud for Government serves the New York City Cyber Command. Microsoft Azure is the favored cloud storage provider for Canada. AWS stores data for the U.S. Department of Homeland Security, the U.S. Department of Defense, including U.S. Navy command centers, 80 percent of German DAX companies, and many other businesses and banks around the world.

Give a shell company or an unethical competitor the underlying code of cloud storage companies, and Congress will have given to China (and Russia, Iran, and North Korea) access to some of the most sensitive information of Western governments and corporations. And no less worrisome, the voluminous information social media companies collect about American consumers’ habits, travels, and associations would be in possession of hostile foreign actors as well.

Fourth and finally, this is a boomerang bill that would make worse everything that people hate about social media. Liberals want to remove “disinformation” and foreign psyops from the American dialogue. Melugin cites a recent paperfrom the Stanford Vienna Transatlantic Technology Law Forum that raises the possibility that interoperability and non-discriminatory provisions combine to make a ripe target for nefarious actors from, for example, Russia or North Korea.

Conservatives who hope to rein in Big Tech’s propensity to censor conservative speech should also prepare to be hit by the boomerang bill. The Klobuchar bill would enforce its vague mandates with civil penalties equal to 15 percent of a company’s revenues. A few such fines would constitute a corporate death penalty, even for tech giants. Big Tech executives, knowing that progressive regulators like Federal Trade Commission Chair Lina Khan could target them for civil prosecution for some ill-defined infraction at any time, would be more woke than ever.

A recent poll by the Trafalgar Group showed that 38 percent of voters say that inflation is their top concern. Zero percent say that antitrust is their top concern. If senators follow the lead of Klobuchar and Grassley, antitrust will rise to the top.

But not in a good way.

H/T HERE:

Robert H. Bork, Jr., is the president of the Antitrust Education Project.

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