Antitrust regulations would harm small businesses.

Out of the frying pan, into the fire. That old refrain describes America’s economy after COVID and during our current wave of inflation. But as companies and entrepreneurs struggle, some politicians are pushing for antitrust laws that would undermine American business competitiveness and security.

The antitrust bills being considered in Congress would, among other things, prohibit select US platforms from promoting their products on their own sites, break up integrated digital tools, require open-door interfaces, and prohibit mergers of a certain size.  

The legislation targets large tech companies, but local businesses, consumers and entrepreneurs will all feel the negative effects of the bills.  Currently, small operations can use large online marketplaces to build a base of customers, grow their sales, and deliver goods around the state, country or globe.  Additionally, large online marketplaces use economies of scale to provide consumers greater product selection, rapid delivery and lower cost shipping. However, the proposed antitrust laws will curtail or prohibit these features on the most-used marketplaces, reducing sellers’ market access, limiting consumer choice, and making delivery more expensive. 

In addition to raising costs, the antitrust bills will fragment business operations. Small businesses often consolidate their online information under a single platform to make it easier for them to interact with consumers. This may include apps or websites that integrate no-cost features, including maps, photos, calendaring, video, reviews and others. The proposed laws will break up and scatter these resources, making it more difficult for businesses to serve their customers. 

It’s also important to recognize that antitrust legislation will make it more difficult for small businesses and startups to succeed. One of the bills would prohibit covered entities from making acquisitions of a certain size. Barring acquisitions of companies by select acquirers would close the door for many small companies to grow. Startups often look to mergers with large companies as a viable, often only, strategy to expand and become profitable. Without this opportunity, many potential entrepreneurs will decline to launch new ventures, and instead remain entrenched at incumbent companies. The result? Fewer new companies, lower levels of job creation and a loss of innovation.  

America’s Innovation Economy is the strongest in the world, worth approximately $2 trillion. It’s important to remember that our tech ecosystem includes more than just the largest companies. Scrappy startups defy the odds and create bold new visions. Universities contribute to America’s research and development, and community colleges help diversify our workforce. Our technology leadership depends on these diverse actors, and we need to ensure that they have the opportunity to continue contributing to our success.

Unfortunately, the rushed antitrust bills will undermine America’s economy and tech leadership. The proposed laws only target US companies and exempt foreign competitors from similar rules and restrictions. Further, the bills would require that American companies make certain datasets and interfaces publicly-accessible, potentially exposing sensitive consumer data and opening the door to increased cybersecurity and misinformation/disinformation risks. Several former high ranking national security officials, from Republican and Democratic administrations, have repeatedly warned about these security risks and their geopolitical consequences.