U.S. policymakers increasingly realize the dangers of China’s tech ambitions. In recent months, the United States led several allies in condemning Chinese cyber aggression, and U.S. officials have attributed dozens of cyberattacks, including the Microsoft Exchange hack that affected tens of thousands of computers globally this spring, to actors associated with Chinese security services.
The Senate passed the U.S. Innovation and Competition Act in June, seeking to ensure that the United States can maintain its global technological edge while also addressing improper Chinese cyber and tech activity.
Unfortunately, the House Judiciary Committee approved a package of legislation this summer that could inadvertently undo some of this progress and, instead, benefit China’s technology aspirations. These bills, intended to address concerns with the alleged market power of large U.S. technology firms, would impose restrictions on a handful of U.S. tech leaders and could even require them to spin off many of their integrated offerings. The success, size and practices of these companies warrant scrutiny, yet Congress must also make sure that any legislation to address legitimate concerns does not damage U.S. competitive and national security interests.
While the House bills assume that big equals bad, the fact is that size matters when it comes to our national security. Large integrated tech firms play a vital role in protecting our nation from a variety of threats. These firms have access to data and other resources that smaller firms simply cannot match and that foreign competitors cannot be counted on to provide.
U.S. intelligence and law enforcement agencies rely on partnerships with leading tech companies to address threats such as foreign terrorist activity, cyberattacks and influence operations. In particular, large U.S. tech firms have led the way in implementing cybersecurity solutions to detect and thwart foreign cyberattacks, both on their core operations and in the broader ecosystems that they manage. And U.S. tech firms are among the global leaders in research and development, providing a critical counterweight to Chinese R&D efforts.
Yet the House Judiciary bills could limit American companies’ ability to continue to engage in the key advancements that have helped fuel U.S. technology leadership and helped keep us safe. For instance, the bills include provisions that would require leading U.S. tech companies to grant competitors “access and interoperability” to operating systems, hardware and software features. This could entitle foreign companies, including those beholden to our adversaries, to seek access to source code associated with U.S. platforms, as well as access to U.S. users’ data and behavioral insights via those platforms.
Other provisions in the bills are aimed at diminishing the key economies of scale that are critical to technology advances by limiting these companies’ ability to offer integrated operations and to acquire new technologies. And all of these bills apply only to a small group of leading U.S. companies, while imposing no similar restrictions on foreign competitors.
Chinese firms such as Baidu, Alibaba and Tencent would be among the primary beneficiaries of these restrictions, potentially resulting in the displacement of U.S.-led technology ecosystems — including cloud services, app stores, search engines and the Internet of Things — by foreign competitors closely affiliated with their governments.
House leaders have suggested action could occur this fall, so it is critical that the debate over this legislation move beyond pure competition issues and consider the national security effects. The House Intelligence, Armed Services, Foreign Affairs and Homeland Security committees have spent significant time analyzing the threat posed by China. They should closely examine the full impact of these bills before further action.
As technology’s role grows in the global race for economic and military supremacy, China is determined to do what it must to surpass the United States. A vibrant U.S. technology industry is one of our strongest assets in this competition, and Congress should continue to seek to strengthen this advantage, not limit it.