Tech Titans or Political Pinatas: How Global Antitrust Laws String Up, Beat Down, and Hold Back America’s Leading Innovators

America’s leading tech companies are increasingly under fire from antitrust laws that are being used to crush competition, according to a new report by the Pacific Research Institute, a free-market think tank based in California. Tech Titans or Political Piñatas: How Global Antitrust Laws Spring Up, Beat Down, and Hold Back America’s Leading Innovators, by PRI technology policy fellow Daniel R. Ballon, Ph.D., exposes how rival companies have abused antitrust laws to gain advantage over competitors. This practice has also been extended to foreign antitrust laws, where rival companies have teamed up with foreign governments to target American companies.

Most recently, China’s first antitrust law enacted on August 1 gives regulators unprecedented power to lock America’s innovators out of one of the world’s most dynamic markets. The laws allow foreign governments to prop up state-supported firms while punishing foreign competitors.

Under China’s new law, the Ministry of Commerce can block mergers, the Chinese State Administration for Industry and Commerce can extort foreign firms with exorbitant fines, and the National Development and Reform Commission can set prices.

Antitrust is a century old tool that gives governments the power to protect and promote a competitive marketplace. “These laws, however, have evolved so that governments now have virtually unlimited authority to manipulate dominant firms based on the complaints of competitors,” Dr. Ballon said. “These laws provide little benefit to consumers in the digital age, where monopolies are only fleeting illusions.” Low overhead costs and rapid innovation ensure that no market leader can hide from agile competitors or revolutionary new technologies, he added.

The report provides case studies of companies where such abuses have occurred: Microsoft, Intel, Apple, and Qualcomm. In addition, the report offers recommendations to help protect the future of technological innovation. Highlights include:

Enact legislation requiring that any foreign antitrust actions against a company based in the U.S. must receive the cooperation, or at least the permission, of American authorities.
Empower the U.S. trade representative to bring cases to the World Trade Organization against countries that unfairly use antitrust laws to protect domestic firms and interests.
Repeal the Hart-Scott-Rodino Improvements Act and the Robinson-Patman Act.
Close the loophole in the Smoot-Hawley Tarriff Act granting the USITC jurisdiction over disputes between American firms.
Prevent the manipulation of rapidly evolving industries by immunizing dominant firms from all forms of antitrust scrutiny until enduring dominance is demonstrated (10 to 20 years).

“The continued global expansion of vague, inconsistent, and protectionist antitrust policies threatens to deter entrepreneurs from investing in transformative technologies. True competition results when consumers, not governments, decide which products and services thrive in the marketplace,” Dr. Ballon said.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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