Antitrust 02/18/2021

Debunking The Campaign Against American Tech

Trace Mitchell
Trace Mitchell Policy Counsel

While American tech businesses are helping us stay sane, connected, and productive during this pandemic, they are also under a deluge of attacks from virtually all sides. From left-wing progressives who were already skeptical of large businesses to right-wing populists with newfound hostility toward “Big Tech,” digital platforms are under scrutiny like never before. 

We’re seeing radical proposals being considered on important issues like Section 230 and antitrust that could very well place the future of America’s tech sector at stake. 

Unfortunately, much of this discussion is riddled with misrepresentation. 

Consider a recent opinion placed in the New York Times by Big Tech critic Maureen Tkacik. Tkacik argued that Jeff Bezos was an elitist who designed a deliberately harmful retail experiment. With this point, we respectfully disagree.

Bezos not only opened the door for hundreds of small businesses to access customers globally, but also enabled the dreams of hundreds of young people just like him. Combined with lowering prices for consumers and increasing average wages for workers, Bezos is ensuring his American dream is an American dream for us all.

Amazon’s diverse portfolio is exactly why Bezos and Amazon have been able to create clickable convenience for consumers.

In 1997 Amazon was just an online bookstore whose business began to grow. In 2003, Amazon started to become highly profitable, profitable enough to redirect investment to launch Amazon Web Services (AWS) in 2006. And by reinvesting the profits from both its retail business and web services, Amazon has managed to continue to innovate and enable further growth, lower prices, and better delivery and logistics.

Unfortunately, some critics like Tkacik argue that Amazon weathered losses in its retail division and was forced to subsidize them with “enormous profits” from AWS. Claims like this mislead.  Amazon’s online model used tried-and-true retail practices to deliver Americans convenience and savings while earning a profit years before AWS ever even came into the picture. 

And this success has led to an explosion of online competitors— not the monopolized market controlling what “congressional investigators said was most likely 50 percent or more of all American online retail sales” cited from the House Judiciary Report by critics like Tkacik. 

In fact, this particular statistic is easy to debunk. No retailer has ever spurred so much competition, including from retail giants Walmart, Target, and BestBuy. Using a widely cited market definition, Amazon is estimated to have less than 40 percent of the online retail market. 

And that’s only continuing to grow. American e-commerce sales grew by over 30 percent in 2020. This can be credited to brick-and-mortar retailers like Kroger and Walmart expanding their online offerings, grocery delivery services, and pharmacy-at-home programs. With brick-and-mortar continuing to invest heavily in their online capabilities, Amazon’s share is surely going to decrease— especially if Best Buy’s explosive online sales growth of 240% and Kroger’s of 127% is anything to go by.

Sadly, these claims against Amazon are a sign of a greater effort to drive the American public against successful American tech. And regardless of whether the claims are misleading, the movement attempts to push the Overton Window in their favor by priming us into thinking that an entire sector of the economy is in need of aggressive, sweeping regulation. Worse, this movement forgets American consumers and the outsized benefits American tech provides them.

Take, this American Economic Liberties Project (AELP) report outlining its vision for “how to prevent the next social media-driven attack on democracy – and avoid a big tech censorship regime.” Claiming consumer harm, the report paradoxically denounces the spread of misinformation and conspiracy theories while simultaneously wanting to remove websites’ ability to moderate and remove such content.

And in doing so, this could set an incredibly dangerous precedent. In scaring the public into thinking websites like Facebook and Google make their money selling your data to third parties, critics are enabling unwarranted fear of these companies who both have strict policies against selling user information. In fact, selling data would undermine the relationship between social media and its users, something that would ruin the businesses and their business models while harming consumers to boot.

While anti-tech movements have been around as long as technology itself, there is a new kind of tension surrounding American tech that is building at an alarming pace. Criticism of America’s tech sector should be based on factual evidence and consumer preferences.

If we cave to misleading claims and subjective desires, we are likely to build a regulatory castle on a foundation of sand that will erode American leadership and innovation in the sector. And we’ll lose clickable convenience for consumers with it.

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