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While we’re generally big fans of the Biden Administration, Biden’s Department of Justice (DOJ) has made a big misstep by sending a letter endorsing proposed tech antitrust legislation in the House and Senate.

Four key reasons:

First, these bills are not ready for prime time. They need more interagency review, beyond the opinion of the DOJ’s acting assistant attorney general for legislative affairs. In particular, there are major cybersecurity concerns, and the Cybersecurity and Infrastructure Security Agency (CISA) and the rest of the Department of Homeland Security needs to weigh in.

Second, the Senate should have the chance to act first. The DOJ shouldn’t be encouraging the House to vote on a bill that has no chance of passing the Senate.

Third, these bills would make inflation worse at just the wrong time. At a time when Americans are oppressed by soaring prices, inflation in the digital sector is running at only a 1% pace. Forced break-ups will eliminate economies of scale and almost inevitably drive up prices.

Fourth, the digital sector, led by the big tech companies, is outperforming the rest of the economy on just about every dimension that consumers and workers care about.

• The tech/ecommerce sector has added 1 million jobs since the pandemic started, while the rest of the economy has lost 3 million jobs. Many of these new jobs are in political swing states.
• Biden identified the need for more investment in his State of the Union Speech. Many old-line companies—in particular, energy and auto companies– cut back on capital spending during 2020 and 2021, while enterprises in the tech, telecom and ecommerce sectors kept investing at the same or higher rates.
• The big tech companies are helping boost American competitiveness by spending on research in key areas like artificial intelligence and quantum computing.

Given all the real problems in the economy, PPI believes that it is remarkably counterproductive to go after the companies that are benefiting consumers and workers.