We breathed a collective sigh of relief when the door slammed shut last year on efforts to pass the American Innovation and Choice Online Act (AICOA) in the 117th Congress. But those funding the advocacy for those bills simply shifted their efforts to what they hoped would be a more receptive audience: U.S. trade negotiators. Unfortunately, while all of this is aimed at Big Tech, small businesses in the app economy would be hit hardest.
The antitrust advocates have had some success, as the United States Trade Representative (USTR) has suspended digital trade talks as part of the Indo-Pacific Economic Framework (IPEF). Then, in a shocking move, USTR unilaterally withdrew from negotiations around digital trade priorities at the World Trade Organization (WTO), apparently without consulting with Congress or other federal agencies. Notably, the strongly worded statements opposing USTR’s unconsidered abandonment of digital trade priorities came from both Republican and Democratic leadership of the committees with jurisdiction over trade.
The pressure campaign leading to these decisions claims to seek policy changes to make Big Tech More accountable. This is especially ironic because it is pursuing a mechanism to achieve its goals by placing the future of American tech-driven industries in the hands of governments, like China, that are still at the negotiating table and that are decidedly not accountable to Americans. Free from the constraints the United States has routinely imposed on other countries not to undermine our most productive industries, the Federal Trade Commission (FTC) could pursue its agenda more easily.
Unleashing antitrust maximalists on digital markets through domestic policy changes and lawsuits would clearly be a disaster for small businesses competing in those markets. The online marketplace model—where platform owners actively curate and manage digital storefronts—has helped democratize entrepreneurship in the digital economy with cost-effective trust-building and distribution of software. But attempts to degrade the value of these marketplaces via walking away from digital trade discussions is an especially harmful way of going about it. It is clear that the current FTC, for example, wants to illegalize some of the most beneficial aspects of online marketplaces for the smallest companies that leverage them through antitrust actions. But the icing on this cake is that USTR’s withdrawal would also remove the basic digital trade protections smaller companies rely on more heavily than larger counterparts, like the United States’ previously unwavering opposition to data localization and source code escrow requirements. This is why we led a multi-organization small business letter to the President asking him to reconsider USTR’s decision. It’s why we will continue to fight these efforts on this latest front opened up by those with an antitrust agenda.