A New Analysis of the Annual U.S. Trade Barriers Report Finds Industry Misappropriating Trade Claims to Attack Other Nations’ Competition Policies, Including Some Pending Here.
Washington, D.C. – Big Tech interests have opened a new front in their attack against anti-monopoly policies worldwide by harnessing U.S. trade enforcement mechanisms to claim “discriminatory” treatment and urging trade penalties against countries adopting competition policies that may have a larger impact on dominant digital firms due to their size not their nationality.
In a new report, “Digital Trade” Doublespeak: Big Tech’s Hijack of Trade Lingo to Attack Anti-Monopoly and Competition Policies,” Economic Liberties’ Rethink Trade program analyzed dozens of submissions to the U.S. government that reveal a pattern of Big Tech interests trying to use trade policy to undermine countries’ anti-monopoly initiatives. Among those targeted are policies that also are pending adoption by the U.S. Congress to end app store operators’ duopoly abuses and address the power imbalance between media outlets and the mega-platforms that currently determine what kind of content ends up reaching the public.
“Big Tech interests hope to hide behind the trade world’s impenetrable terminology and closed-door processes but their latest ploy to evade efforts worldwide to end their abuses against consumers, workers, and smaller businesses won’t work,” said Lori Wallach, director of the Rethink Trade program at American Economic Liberties Project. “No one thinks it’s discrimination against American firms rather than countering monopolistic abuse when countries stop Apple and Google app store manipulations or make Facebook and Google share ad revenue with those writing the content they use.”
Rethink Trade reviewed dozens of industry National Trade Estimate (NTE) submissions. The NTE is an annual review of what ostensibly are other countries’ illegal trade barriers that the U.S. seeks to eliminate. It is issued by the Office of the United States Trade Representative (USTR). For years, the NTE has been used to attack as trade barriers other countries’ public interest policies that various industries dislike. Now, Big Tech has gotten into the game with attacks especially aimed at four cutting-edge anti-monopoly policies promoting fair competition that countries around the world are considering adopting, including the United States:
- South Korea’s App Stores Law that, like S. 2730/H5017 The Open App Markets Act pending a Senate vote soon, requires app stores to allow diverse payment systems (not only their own) and to not forbid app developers from selling on other platforms;
- Australia’s News Media Bargaining Code, a law similar to S.673/H1735 The Journalism Competition and Preservation Act that remedies Big Tech platforms’ monopolization of ad revenue and decimation of local journalism by creating the conditions for digital platforms to pay for the news they distribute;
- EU’s Digital Markets Act and Digital Services Act, the European Union’s crackdown against abusive behavior by dominant digital firms and establishment of consumer rights online, which shares many elements of S.2992/H3816 The American Innovation and Choice Online Act; and
- Germany’s GWB Digitization Act, a competition law revamp that proactively prevents anticompetitive actions by the biggest digital players.
“Big Tech’s claims of discrimination are nothing more than propaganda, and this report proves it” said Sarah Miller, Executive Director of the American Economic Liberties Project. “U.S. policymakers should reject Big Tech’s lies and work to accelerate world-wide efforts to protect workers, small businesses, independent news, and democracy by breaking and regulating Big Tech’s power.”
The way in which digital firms and their trade associations have tried to weaponize the NTE reporting process to attack pro-competition policies and label them as “discriminatory” or “barriers to digital trade” provides a preview of what they could do if Big Tech-rigged “digital trade” rules are expanded in bilateral, regional, and multilateral trade agreements.
The main findings of the investigation include:
- Industry associations attacked the four cutting-edge competition policies in 30 instances using the NTE reporting process.
- The policies that received more attacks were the EU’s Digital Markets Act and Digital Services Act with 11 comments, followed by Australia’s News Media Bargaining Code with 10 comments, Korea’s App Stores Law with five comments, and Germany’s GWB Digitization Act with four comments.
- The Computer & Communications Industry Association and the now-defunct Internet Association were the groups that most often used trade lingo to attack competition policies adopted by other nations. These associations both include Amazon, Google, Microsoft, and other Big Tech companies among their membership. Other organizations that routinely used their NTE submissions to challenge the analyzed policies using trade “non-discrimination” language are the Information Technology Industry Council, the U.S. Council for International Business, the Coalition of Services Industries, the National Foreign Trade Council, and the App Association.
- In October 2020, the Information Technology Industry Council (ITIC) urged the U.S. government to weigh in against the Korean policy, claiming the “legislative intent” of the amendment was “to target US firms, while favoring their Korean competitors,” and also argued that the policy would be a violation of market access and investment commitments under the Korea-U.S. Free Trade Agreement (KORUS). The 2021 NTE report, largely drafted before the current USTR took office, echoed Apple and Google’s allegations, stating that the legislation “appears to specifically target U.S. providers and threatens a standard U.S. business model” despite the fact that identical legislation had been introduced domestically.
- Several industry associations tried to block the adoption of the Australia’s News Media Bargaining Code, legislation similar to the Journalism Competition and Preservation Act now making its way through the U.S. Congress. In 2020, the now-shuttered Internet Association claimed that “The internet industry has strong concerns that the Code violates Australia’s trade obligations and unfairly discriminates against U.S. companies.” Big Tech had success in recruiting U.S. government officials in their quest against the code, as in January 2021, USTR filed a submission before the Australian parliament asking it to “suspend any plans to finalize this legislative proposal.”
- Regarding the EU’s Digital Markets Act and Digital Services Act, the U.S. Council for International Business claimed that that: “These unilateral regulations appear designed to discriminate against U.S. companies and to take aim at a slice of the $517 billion U.S. digital export market;” the Internet Association said: “The DMA includes an array of extraordinary prohibitions that will apply exclusively to a small group of U.S. platforms;” and the Coalition of Services Industries stated clearly the disproportionate impact argument: “The scope of the law [DMA] could impact U.S. companies disproportionately.” U.S. officials’ public criticism of the DMA has been leveraged to try to undermine a similar legislative proposal making its way through the U.S. Congress. For instance, the U.S. Chamber of Commerce argues that “the White House needs to read its own talking points [regarding the DMA], before it takes a final position on the legislation [the American Innovation and Choice Online Act]. Providing support for similarly misguided domestic bills, the administration could transform the world’s most innovative economy into one that reeks of stagnation.”
Rethink Trade is a program of the American Economic Liberties Project.
The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.