Big Tech antitrust probe must not hinder innovation

The day of reckoning for Big Tech is upon us.

Technology companies swung and missed at repeated opportunities over the past decade to work with the federal government on regulations to ensure consumer privacy and fair competition. They had a chance to address the issues and they failed.

So we move to the next, inevitable step: the federal government’s announcement last week that it will conduct an antitrust investigation of Facebook, Google, Apple and Amazon. Now the stakes are much higher. The industry’s past foot-dragging means that it now faces a real threat that the feds could act unilaterally — and stifle innovation in the process.

It’s a serious risk. Raise your hand if you think the folks at the Department of Justice and the Federal Trade Commission understand what drives the innovation economy. That’s what we thought. Yet these are the people who will be drawing up the rules the tech industry will play by in the years ahead.

Let’s hope they don’t forget that innovation is at the heart of our economic growth. Our ability to remain a world power requires that we maintain a technological edge over China and our other global competitors.

That won’t be easy. The Chinese government is investing $300 billion in an effort to dominate the fields of green energy, green vehicles, robotics, medicine and artificial intelligence. Its goal is to overcome the United States’ technological advantage by 2025. Any serious disruption in the way the U.S. tech industry operates could have costly, unintended consequences on our ability to maintain our advantage.

Whatever the federal government does, it must maintain incentives for U.S. tech firms to keep spending on research and development, which is one of their primary tools to evolve and prepare for the future.

Tech leads U.S. companies in research and development spending. Amazon ($14.1 billion), Google ($10.15 billion), Apple ($7.65 billion) and Facebook ($4.76 billion) were among the top 10 investors in R&D in 2018. They are using those billions as a strategic weapon to win what could accurately be described as the World War of Artificial Intelligence.

Time is of the essence. The digital landscape of 2030 is likely to be fundamentally different than it is today. After all, consider how fast it’s changed in the past dozen years. As recently as 2007, Myspace dominated the social networking landscape, receiving more than 70% of all visits to social networks. Facebook, which was only three years old, was a distant second.

That same year, IBM created Watson, its artificial intelligence system. Apple released the iphone, Airbnb was founded, and Twitter had just gone global. Google had yet to release its Android system and Amazon was still finding its way on the cloud computing scene.

Those companies launched a wave of innovation that helped the United States emerge from the 2008 financial crisis and create what has been the longest bull market in history. Unfortunately, Big Tech’s dominance over those years has led to abuses that deserve greater federal regulation.

As a result, the Department of Justice and Federal Trade Commission now need to rein in Amazon, Apple, Facebook and Google. But, in the process, the feds must take extreme caution not to stifle innovation.