Congress: Let Big Tech Help Small Business

Written by: Jake Ward

Amidst the worst economic crisis since the Great Depression — when leaders should be boosting our economy and helping small businesses — a congressional subcommittee chair is instead playing politics and small businesses will pay the price.

In an extraordinary rebuke of American innovators and our global technology leadership, Rhode Island Rep. David Cicilline (D) just released a report on “Big Tech” that recommends Congress punish success by forcibly dismantling America’s leading technology companies. More importantly, he ignores the invaluable partnership between those tech leaders and millions of American small businesses.

Research and common sense tell us that smart use of digital tools and online marketplaces drives small business success. In the best of times, businesses that use affordable, scalable small business tools grow faster and have higher revenue and profits. In a pandemic, access to these tools may be the difference between staying in or bankruptcy.

According to Digitally Driven, a survey of more than 7,000 small businesses, tools that enable e-commerce, digital marketing, more efficient operations and working from home give American small businesses a fighting chance during the COVID recession.

They form a Digital Safety Net, as businesses that embrace them anticipate four times better revenue than those that don’t. Additional research documents that online marketplaces provided more than $145 billion in value in 2018 and likely twice that during the COVID pandemic.

By rejecting the data, Cicilline’s report is wrong from its thesis to the conclusion. Government concerns of tech-industry monopolies and market dominance are always built on quicksand.

Remember Yahoo, AOL and MySpace? Zoom was virtually unknown in February but now is synonymous with video conferencing as Kleenex is with tissues. To assert that there is no competition in technology is to ignore recent history.

At the heart of Cicilline’s recommendations is a “single-line of business rule” for digital platforms and marketplaces. This “Glass-Steagall for the Internet” proposal may be clever branding, but really it is a bad analogy built on faulty mythology twisted into bad public policy.

The legend was that banks’ bad investments using consumer deposits caused the Great Depression, and the Glass-Steagall Act of 1933 was intended to prevent banks from gambling with consumer deposits again. But today’s digital economy is not causing a Depression or the COVID recession. Digital platforms are delivering billions of dollars of value to consumers and small businesses and justifiably have been embraced as a result.

Another absurd proposal would ban digital marketplaces from showing any preference for their own products. But grocery and department stores have been selling their own brands alongside third-party products for decades. Will Congress also require store-brand cereal to be on supermarkets’ top shelves so consumers are less likely to find it?

The Cicilline proposal is a square peg in the modern economy’s round hole, and the resulting chaos will create inefficiencies and force higher prices for online ads, marketplaces, business collaboration tools, and many more services that today work brilliantly for millions of small businesses.

Despite the obvious evidence of tech industry competition and value, including digital platforms’ fierce competition for small business advertising, marketing, and software dollars, Rep. Cicilline is not convinced.

Or perhaps he is simply too busy headlining fundraisers as a modern-day trust-buster to pay attention to the substantive details and data. Is it any wonder that he is releasing the report while the media is occupied with the pandemic, Supreme Court and election?

Regulations are not inherently bad, and antitrust law is essential to protecting consumers. But the wrong regulations for the wrong reasons at the wrong time will have unintended consequences.

Forcibly breaking apart digital platforms will eliminate the gains that many small businesses have enjoyed for nearly a decade. The competition debate cannot just be about the “big” in Big Tech, as these platforms’ size and scale are precisely what enables them to provide small businesses with high-quality tools and services at affordable prices.

The debate about Big Tech must include Main Street and the millions of small businesses that are the backbone of our economy and will drive our economic recovery.


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