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Date: 2022-01-24 19:25:07
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Silicon Valley is the envy of world. We boast an innovative tech sector that drives the American economy, a workforce that’s second to none and a culture that inspires a creative, “think outside of the box” mentality – an environment that spurs anyone with a clever idea to think-up solutions to problems that don’t yet exist.
When the Chamber learned about a package of federal antitrust legislation – five bills in the House and U.S. Senate that target a few tech companies – we had to engage. The legislation, among other things, would break up integrated online services, prohibit some platforms from promoting their products on their own sites and limit or stop mergers of a certain size.
California’s tech industry supports more than 1.8 million jobs and accounts for more than a quarter of America’s nearly $2 trillion innovation economy. We know because many of these companies are headquartered here. We have friends and family who work at these companies or in the local businesses that support them.
It’s the small and medium size businesses that would be vulnerable to this burdensome legislation. As written, local restaurants could no longer appear on Google maps or in business reviews because those features would be considered as unfairly competing with rival services.
If the direct impact of this legislation weren’t enough, California consumers would also suffer. Antitrust policy traditionally focuses on consumer protection. Today, small businesses and families can access free, integrated features like email, maps and video streaming on a single platform.
The legislation pending before Congress would shift antitrust’s focus away from consumer protection and toward “business competition.” It would break-up these integrated services and disperse them across the internet. Companies offering bundled services would lose the benefits of them. Families would face higher costs for services that are currently low-cost or free.
California innovation would also suffer unless this legislation is defeated. Start-up companies – commonplace in our region but rare in much of the United States – would find it more challenging to reach a profitable exit. Obtaining venture capital would be considerably more difficult. This legislation would result in fewer startups, depressed startup investment and disincentivized new company formation, job creation and innovation.
Even more troubling, the package of antitrust bills targets U.S. companies (all of whom have a presence in California) but not foreign competitors.
Congress must create an environment that makes sure American companies remain globally competitive. These bills naively assume that large companies harm competition. What they either choose to ignore or don’t understand is that when it comes to tech, smaller companies rely on larger companies for the platforms and services that allow entrepreneurs to build products and markets.
Our region is fortunate to have members of Congress with a significant understanding of what makes the tech industry unique. Collectively and individually, representatives like Ro Khanna, Zoe Lofgren, Anna Eshoo and others have stood up for tech and the many good-paying jobs and economic bounty it creates for our region, state and nation.
Business organizations across California have engaged and urged Congress to reject these bills. We “get it” that this legislation would strip American companies of their ability to deliver integrated consumer products and services, ban mutually-beneficial startup acquisitions, and take steps toward breaking up our leading innovators.
At the Sunnyvale Chamber of Commerce, we are storytellers, driven by our belief that business and community are inextricably linked. If this package of federal legislation were a story, it has a horrible plot line. We can give it a happy ending. California’s Congressional delegation has the opportunity to correct it.
The package of antitrust legislation is bad for business competitiveness, bad for Sunnyvale businesses and, ultimately, the wrong solution for America’s economic recovery. It deserves to be defeated.
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Dawn Maher is the CEO of the Sunnyvale Chamber of Commerce. www.svcoc.org