Ex-intel officials claim antitrust could hurt U.S. in China tech race

Twelve former top U.S. national security officials are urging Congress to hit pause on a package of antitrust bills in order to consider how breaking up tech companies could harm the U.S. in its competition with China, according to a letter obtained by Axios.

The big picture: Former Defense Secretary Leon Panetta and former Director of National Intelligence Dan Coats are among those arguing that imposing severe restrictions solely on U.S. giants will pave the way for a tech landscape dominated by China — echoing a position voiced by the Big Tech companies themselves.

What they're saying: In its quest to "undermine U.S. influence" and become "the world's leading innovator," the Chinese government employs policies designed to "create and support 'national champion' technology companies," the former officials wrote in a letter to House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy.

• Antitrust legislation to break up U.S. tech giants — without targeting Chinese companies like Huawei, Tencent, Baidu and Alibaba — could impede innovation that is "critical to maintaining America’s technological edge," they argue.

• The former officials praise the U.S. Innovation and Competition Act — a sweeping, $200 billion China-focused package overwhelmingly passed by the Senate in June — but call on Congress to study the national security implications of the House antitrust proposals before moving forward.

• Since leaving public service, several of the letter's signatories have joined the boards of organizations that receive funding or do work for tech firms like Google and Amazon.

The other side: "These arguments are the same arguments that Facebook and Google have been making for a very long time in an effort to avoid regulation," Rep. David Cicilline (D-R.I.), the chair of House Judiciary's Antitrust Subcommittee, told Axios. "And I think actually that the evidence is just the opposite."

• Cicilline — who is seeking a House vote on the bills this fall — argues that competition drives innovation, and that the lack of competition in the digital marketplace has led to a "very dangerous" decline in innovation that poses its own national security threat.

• A spokesperson for Rep. Ken Buck (R-Colo.), the subcommittee's top Republican, told Axios: "Let’s be clear: Amazon, Apple, Facebook and Google are hurting U.S. competition by engaging in anti-competitive practices. Our bills will create competition."

Between the lines: The letter does not acknowledge China's own Big Tech crackdown, which has accelerated in recent months.

• The Financial Times reported this week, for example, that Chinese regulators are seeking to break up payments app Alipay — Beijing's latest salvo against Jack Ma's Ant Group, whose record-setting IPO was scuttled by Xi Jinping last year.

The letter was signed by:

• Robert Cardillo, former National Geospatial-Intelligence Agency director

• Dan Coats, former director of national intelligence

• Adm. James Foggo III, former U.S. Navy commander Europe-Africa

• Sue Gordon, former principal deputy director of national intelligence

• Rick Ledgett Jr., former NSA deputy director

• Michael Morell, former acting CIA director

• John Negroponte, former director of national intelligence and deputy secretary of state

• Leon Panetta, former defense secretary and CIA director

• Vice Adm. Jan Tighe, former director of naval intelligence and commander of the Tenth Fleet

• Frances Townsend, former White House homeland security adviser

• Dr. Michael Vickers, former undersecretary of defense for intelligence

• Adm. James "Sandy" Winnefeld Jr., former Joint Chiefs of Staff vice chairman

Full text of letter.

Full story: https://www.axios.com/china-antitrust-big-tech-national-security-d0fb2141-aefe-407c-97ef-8da09cb54b55.html