Throughout China’s quest to become the global leader in technology, the one aspect that’s been lacking in comparison to the countries whose IP they steal is a lack of innovation.
Enter Joe Biden’s FTC – which may have just become China’s unlikely ally in their quest to become #1.
As former Trump administration advisor Brian Cavanaugh writes in The Hill;
Under Chairwoman Lina Khan, the FTC has embarked on a multi-continent crusade against American tech giants, all in the name of antitrust policy. Most concerning, the FTC announced in March that it would send its own agency officials to aid Europe in implementing and enforcing the European Union’s Digital Markets Act (DMA). When challenged in an April congressional hearing, Khan defended her position as simply “good government.”
This 2022 law from the EU is aimed at curbing Big Tech dominance and creating opportunities for European tech companies to compete. It designates a class of tech companies as tech “gatekeepers,” and subjects these companies to additional rules from which other tech firms are exempted. The EU’s goal is to give its own companies an advantage over their larger American counterparts, But in reality, it will only undermine innovation while increasing dependency on technology from China.
Kavanaugh notes that the FTC has committed to enforcing a European law requiring gatekeepers to share certain data with rival tech companies, which will significantly hinder their ability to use their proprietary data for other services. If companies fail to do this, the EU will fine them.
The compliance costs alone are astounding, and could be as high as $50 billion according to one recent study on the new compliance and operational costs on tech gatekeepers. The costs, Kavanaugh aptly points out, will be passed on to consumers one way or another, while American tech companies designated as gatekeepers will most likely need to create new services to comply with the EU rules, or completely pull their offerings out of the EU digital markets, to the detriment of US and European consumers.
Here’s where it benefits China…
Money, honey!