House Antitrust Bills Send ‘Terrible Message to Entrepreneurs’: Shapiro
The House Judiciary Committee's antitrust package targeting big tech, set to be marked up Wednesday, “is an existential threat to our competitiveness,” CTA President Gary Shapiro told the Media Institute Tuesday. “The bills would effectively prohibit acquisitions by our largest companies, leaving startups and their investors, who counted on selling their companies, out in the cold.” Industry groups said this week that the bipartisan legislation would upend centuries of U.S. antitrust law (see 2106220061).
The legislative package would prohibit “beloved services” like Amazon Prime, said Shapiro. It would require companies “to open their systems to competitors and potential wrongdoers,” he said. “None of this, none of it, connotes consumer welfare. In fact, it will frustrate the consumers and citizens and constituents of the members of Congress supporting it.”
By penalizing the most successful U.S. tech companies, “it sends a terrible message to all entrepreneurs” that “you’d better not grow too big or become too successful, or you too will be faced with onerous and crushing mandates and new theories of liability,” said Shapiro. “These bills are being rushed through without a hearing, without testimony. Why? Because it’s politically expedient. Even the bills’ sponsors do not agree on what the bills require or what companies they would impact.”
Such legislative treatment would be harsh payback for a tech industry and individual tech companies “that rescued us during the pandemic,” said Shapiro. “They saved our economy, our jobs, our health, our kids and our sanity.” Because of technology, and the use of AI to drive “rapid gene sequencing, we did a miracle,” he said. “We produced a vaccine to a deadly virus in less than a year. Never before done.”
Tech also is “disrupting older industries, and let’s be frank -- some of those disrupted industries are gleefully stirring the anti-tech fervor in Washington,” said Shapiro. The “cycle” of disruption “won’t stop,” as “innovators” like Clubhouse, Substack and TikTok “gain millions of followers and challenge established social media platforms," he said: “Clubhouse became a unicorn -- $1 billion in valuation earlier this year -- only nine months after its launch. Now that’s a dynamic marketplace.”
“Creative” market disruption enables consumers “to benefit from better, less expensive, more robust services,” said Shapiro. “It’s the reason why the U.S. continues to be the world’s hotbed of innovation.” No good can come when government “goes beyond legitimate regulatory guardrails and rushes to regulate in a harmful way, restricting innovation and often simultaneously chilling speech. Thus we see weird and dangerous new antitrust theories, protecting competitors, not competition, and not consumers.”
That’s a “malady” that’s unique to Washington, said Shapiro. Some politicians “relish the idea” of holding big tech companies in check, but “average Americans love what the tech companies can and will do,” he said. “Despite the nonstop efforts by D.C. politicians to demonize tech, Americans remain relentless tech optimists.”
Tech “enables free speech,” and “restricts government from quiet backroom deals” that protect “incumbent industries,” said Shapiro. “In almost every tech battle in my career, from ensuring the legality of the VCR to protecting video rentals to protecting the internet from those alleging it was an illegal copying device to fighting for market disruptors like Airbnb, Uber and Lyft, we won, as average Americans and consumers realized the benefits.”
Americans live in “a golden age of free speech,” said Shapiro. Yet the “new Washington sport is lambasting and threatening the free speech of tech platforms,” he said. “Let’s be real.” The platforms face “an impossible task to determine truthfulness in political speech. You ever try doing that in an election cycle?” Critics expect Facebook to behave like a “super State Department and Supreme Court, analyzing, adjudicating local and regional political claims,” he said.
The “reality” of “content moderation at scale” is that it’s “incredibly daunting,” said Shapiro. “Moderation decisions upset people, but they anger both sides of the political spectrum. That means they must be doing something right.” Tech agrees platforms “have a moral and a legal obligation to prevent users from inciting violence,” he said.
But every American “should be uncomfortable when a former president of the United States is barred from major social media platforms,” said Shapiro, saying later in his presentation that he’s no Donald Trump supporter. Shapiro cited that as an “extreme example of chilling political speech” that’s “disenfranchizing” millions of Trump’s followers: “What could be more harmful and divisive for a country than to shut out a passionate minority? Is the ban necessary to promote public safety or does it merely inflame and exacerbate our existing political divisions?” Facebook, which banned Trump at least until January 2023 (see 2106040066), didn’t comment.