[CTC] Tai says America’s tech giants have too much data power

[Arthur Stamoulis]

POLITICO: Tai says America’s tech giants have too much data power
BY DOUG PALMER, JOSH SISCO | 01/31/2024 12:48 PM EST 
America’s giant tech companies have too much control over data that increasingly shapes the contours of everyday life, U.S. Trade Representative Katherine Tai said Wednesday, justifying a recent decision that has alienated much of the U.S. business community and drawn fire from many members of Congress.

“We have a massive problem with concentration in the technology field around those people who are collecting the data, have access to the data,” Tai said at an antitrust conference in Brussels <https://www.bruxconference2024.com/event/f79d717d-15c4-485a-a60b-4c718e9490b0/websitePage:eb09fb92-5af0-4944-83d6-cac5cfb7c364?source=email> put on by the economist Cristina Caffarra. “[This] has become an enormous issue that we have to grapple with in trade and an area where the trade disciplines, the trade representative and the antitrust enforcers have been thrown into each other's roles.”

Tai’s decision last fall to abandon certain long-standing positions on digital trade in negotiations at the World Trade Organization is the most vivid example of how U.S. trade and antitrust policy are intersecting in the Biden administration, as first outlined by Tai in a speech she gave last summer in Washington <https://subscriber.politicopro.com/newsletter/2023/06/tai-aligns-u-s-trade-and-competition-policy-00102363?source=email>.

Taking on Big Tech: The move has drawn cheers from progressives Democrats <https://schakowsky.house.gov/media/press-releases/schakowsky-warren-lead-10-lawmakers-commending-biden-administration-countering?source=email> such as Sen. Elizabeth Warren <https://directory.politicopro.com/member/140963?source=email> (D-Mass.) and a number of groups on the left.

But other lawmakers, such as Senate Finance Chair Ron Wyden <https://directory.politicopro.com/member/51247?source=email> (D-Ore.) and ranking member Mike Crapo <https://directory.politicopro.com/member/51173?source=email> (R-Idaho), have criticized Tai’s decision  <https://www.crapo.senate.gov/media/newsreleases/32-bipartisan-senators-call-on-white-house-to-reverse-course-on-digital-trade-and-stand-up-to-china-support-american-workers-and-human-rights?source=email>to withdraw the long-standing negotiating proposals, which were aimed at promoting the free flow of data used by businesses across borders, prohibiting requirements for companies to store data they collect locally and barring countries from requiring companies to transfer software source codes.

In her speech, Tai argued that U.S. digital trade policy started in the early 2000s with the idea that facilitating data flows would make it easier for companies to sell goods across borders.

“But data itself today has become the commodity,” Tai said. “The data is the thing that has value and the data has an incredible power — and who has the data and who gets to decide where the data goes and how it flows has become an issue, not between stakeholders sets, but between industries and the governments, between the private sector and those who are charged with carrying out and serving the public interest.”

‘Trickle-down’ fallacy: In that regard, the trade interests of America’s biggest tech companies are not necessarily compatible with the trade interests of the United States as a whole, Tai said.

“What we're trying to do in trade … is to break ourselves out of the assumption that what is good for the biggest corporate stakeholders in our system equals what is good for America and Americans,” Tai said.

“I think for a long time we've pursued this assumption that, well, these are iconic American companies, they’re brand names that we're very proud of, therefore anything that is good for them will be good for us, that benefiting the companies will create that trickle-down benefit to the company's workers and the communities where those workers live. And we've seen over time, that just isn't happening. It just isn't happening,” she said.

Leaning into that theme, Tai said the trade policies practiced by most recent administrations depended too much on the idea that promoting economic efficiency was good for the United States because consumers would benefit from lower prices and increased choice.

But “every consumer is also a worker,” Tai said. “If we're only pursuing policies to benefit people as consumers, and those policies are actually impoverishing those people as workers, the entire system doesn't work.”

Taking on China: Tai also said China, with its huge manufacturing prowess, has amassed too much economic power, providing another example where trade and competition policy are intersecting.

“We have a huge problem of bigness around the world in one particular country, and that's the Chinese PRC economic system that operates so very differently from ours,” she said.

That point was underscored by Heather Boushey, a member of President Joe Biden’s Council of Economic Advisers, who spoke prior to Tai at the conference and warned about the risks of depending too much on single sources for critical goods.

“The United States faces new challenges to its economic standing in the world, including unfair competitive pressures from foreign monopolies and firms that are state-owned or state-sponsored,” Boushey said. “We need to be thinking about the international order from a competition lens, from an antitrust lens and make sure that we are supporting that resiliency of supply chains."

However, critics such as Wyden and Crapo have argued that Tai’s digital trade move will benefit the “digital protectionism” practiced by China at the expense of the United States.


Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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