As lawmakers grill U.S. technology CEOs, they should ask not just about their near-monopoly power today, but also about staving off Chinese dominance tomorrow.
On July 27, Mark Zuckerberg, Sundar Pichai, Tim Cook, and Jeff Bezos will testify before the House Judiciary Committee. This will be among the final steps in the Committee’s antitrust investigation into America’s tech giants and the U.S. digital marketplace. The four CEOs are expected to answer questions about the relationship between their markets and existing regulations, as well as how their platform roles affect smaller competitors and consumers.
Such questions are valid. Regulations have not kept pace with evolving digital marketplaces. But the July 27 hearing – and the Judiciary Committee’s investigation writ large – risk overlooking the real threat to competition: The Chinese Communist Party.
American tech giants do not exist in a vacuum. Whether Congress acknowledges it or not, American companies are competing with the Chinese state and its state-backed corporate champions. And these Chinese players are competing to control a new global architecture. As we consider the state of American big tech, we should also ask what curtailing it means for the world: Do we want Facebook, Google, Apple, Amazon or do we want Beijing’s?
“Chinese standards will inevitably reach the world,” declared the Chinese Communist Party’s Global Times in April, “and that will not be stopped by geopolitical games.” Today, these Chinese standards – and networks and platforms – facilitate theft of American innovations, promotion of Beijing’s narrative and economic systems, and genocide of the Uighur minority in Xinjiang.
Information technology is creating a new global architecture. As Beijing sees it, a foundational information system – what the Chinese Academy of Sciences calls a ubiquitous network backbone – is taking shape. It connects the real and the virtual worlds. Smart trains, cars, TVs, and refrigerators link to this backbone. So do shopping and entertainment platforms, global logistics, payments, imagery, social media. This information architecture was emerging before COVID. It is developing more quickly now, as remote work, commerce, and communication define daily existence.
China’s global strategy hinges on establishing control of the ubiquitous information network, with it the “Internet of Everything.” And Beijing intends to use this control to acquire global dominance; both to collect full data on what is said, moved, and purchased, and to shape as much. Beijing propels its strategy by deploying select state champions, propped up by subsidies and intellectual property siphoned from foreign rivals.
The House Judiciary Committee worries that Amazon, motivated by profit, can adjust information on its platform to shape what is purchased at the expense of smaller competitors. But Beijing wants to build a global network with which it will shape what is said, moved, and purchased.
One way or another, the Internet of Things will be built, and on a global scale. If you take America’s tech giants out of the equation, Beijing will be the one to build it.
Imagine what happens when a nation-state claims Amazon’s power – but internationally, across domains, and with hegemonic ambitions. That country could shape international supply chains. It could shape international narratives so that the media tells a positive story about China – and targets it to receptive audiences. That country could control global data on land, air, and sea movement, of people and of things, military and commercial. It could feed that data to its industrial champions as they compete for global markets. It could influence insurance rates and credit ratings. It can obfuscate illicit activities to gain a competitive edge. As the former Director of China’s State Council’s Research Office put it in 2019, “The strategic contest among great powers is no longer about competitions for market scale and technological superiority. It is about competition for system design and rule-making.”
This, not just espionage, is the threat posed by Huawei and China’s 5G ambitions. It is also the threat posed by ByteDance and Beidou and AliPay, by China’s growing dominance in fintech, commercial drones, social media, sensor systems, next-generation transportation systems, and modern logistics platforms. China’s long-standing, national strategies are candid about its intentions: This calendar year, Beijing is expected to release its China Standards 2035 strategy, a program to extend the footholds claimed through the Made in China 2025 industrial plan into control over the networks, platforms, and standards that will govern the emerging world.
The U.S. is ill-prepared to respond. The contest for global networks plays to China’s strengths. It favors size, centralization, and efficiency of scale. In 2002, a scholar at Hunan University wrote that “where there are network effects, when a country has a larger user base, even though its technology is no better, even worse, than other countries, it can win the international competition for standards.” That framing recurs consistently in Chinese discourse.
The network contest also allows Beijing to subvert America’s traditional strengths: The U.S. has the strongest innovative capacity and the most influential private sector in the world. But China copies that innovation – Baidu’s resemblance to Google is no accident – and applies it, at scale, through government-guided companies, for strategic ends. U.S. fragmentation and openness give Beijing an angle in. They also stymy the communication and coordination necessary for an effective response.
What would such a response look like? It would recognize that a new global architecture is being formed. If that architecture is not defined by the U.S. private sector, it will be captured by an authoritarian adversary. An effective response would therefore marshal the enduring strengths of the U.S. private sector: innovative capacity, incumbency, and nimbleness that the centralized Chinese Communist Party cannot hope to rival. Through a system of patriotic shaping and in concert with trusted allies and partners, an effective U.S. response would encourage American companies to build a positive global architecture.
The need for such a response suggests a new line of questions for Mr. Zuckerberg, Pichai, Cook, and Bezos. Let us ask them what they are going to do about Beijing: How do they intend to protect U.S. innovation, fight authoritarian norms, and build a trustworthy ecosystem, while also permitting fair competition and expression?
Right now, American impulses risk tearing apart precisely the strengths that the U.S. needs in order to face down China’s threats. There is no doubt that Big Tech has its problems. But Big Brother, Beijing-style, is decidedly worse.