Big Tech’s Broken Record: Supply Chains Hearing Edition

May 10, 2024

Big Tech's Broken Record: Supply Chains Hearing Edition

By Rishab Bailey and Melinda St Louis

Big Tech lobbyists and their supporters have been taking every opportunity to attack the U.S. Trade Representative (USTR) for better aligning U.S. trade policy with domestic Big Tech accountability goals. In particular, tech lobbyists are melting down over the USTR's decision to shift away from certain extreme digital Trump-era trade provisions at the World Trade Organization's Joint Statement Initiative on E-Commerce(JSI).

Last week's public hearings on strategies to advance supply chain resilience in trade negotiations were no exception, and unsurprisingly, Big Tech representatives spouted the same tired talking points that have been effectively rebutted time and again.

The hearings were intended to help the USTR source information "on supply chain challenges across a range of sectors, and identify potential policy solutions." The hearing focused on how to make progress on 'friendshoring,' supply chain diversification, enhance domestic manufacturing capacities, limit trade in goods created through forced labor, and more.

But representatives from the Computer & Communications Industry Association, the Global Data Alliance / BSA Software Alliance, the Information Technology Industry Council, the Consumer Technology Association, and the Business Roundtable - industry associations that represent Apple, Amazon, Meta, and Google amongst other tech companies - took the opportunity to regurgitate the same misplaced talking points they have been repeating for months. And to no surprise, Big Tech is just as wrong now as they have been before.

Once again, they mischaracterized the Biden administration's position as though its intent was somehow to stop cross-border data flows altogether. The administration has repeatedly clarified that this is not the case, explaining that its goals are to ensure that Congress and the administration can put in place relevant public-interest regulation to protect people's privacy rights, promote competition in the tech sector, and address potential AI harms.

The Biden administration's recent Executive Orderto protect sensitive American data from being exploited by countries of concern, is an example of the type of regulation that could be stymied by the Trump-era digital trade provisions pushed by Big Tech companies. Thus, the industry lobbyists' claims that unrestricted cross-border data flows help diversify supply chains can be seen for what they are: red herrings.

Allowing governments to implement public-interest regulation over data flows does not equate to a restriction on all data flows. Indeed, there are only a few countries in the world that implement broad restrictions on data transfers, with most only applying them to select categories of particularly sensitive data, such as health or financial data.

Big Tech yet again rehashed a flawed argument that - by withdrawing support for these specific Trump-era proposals - the US would somehow be unable to influence the "rules of the road" on digital trade. In reality, any serious observer can see that the USTR has continued to engage in negotiations on digital trade issues, including at the WTO's JSI. In fact, by moving away from these controversial provisions that most of the participating countries refused to support, USTR helped to jumpstart the JSI negotiations in other areas.

Big Tech claimed that the Trump-era rules would enhance 'regulatory certainty' for businesses. This is code for protecting the status quo - where Big Tech continues to be unregulated, exposing consumers to various online harms. The tech industry unsurprisingly continues to complain about being asked to comply with nascent consumer and public safety regulations in the U.S. and elsewhere in the world. While they claim to speak for small businesses, it is only the biggest tech companies that benefit from a relatively unregulated digital ecosystem that allows them to strengthen and unfairly profit from their monopoly positions, as many small and medium companies have argued.

Further, claims such as how cybersecurity may be hurt by offshoring data are also questionable. The security of data is guaranteed by the presence of robust data protection and cybersecurity laws, as well technical expertise. In fact, in the absence of modern data protection regulations in the U.S. - reforms that Big Techhas also attemptedto derail- user data is likely much safer in jurisdictions such as the EU. Similarly, the claim that offshoring data would lead to a loss of jobs in the U.S. may be slightly more persuasive if tech companies weren't already exploiting workersin developingcountriesto whom AI training, data labeling, and other data-oriented jobs are outsourced (usually at pitifully low wages).

As we have seen over the last few months - including at hearings conducted by the Senate Financeand the House Ways and Means Committees- Big Tech and its supporters have yet to come to terms with the USTR's shift away from certain extreme digital trade provisions at the WTO. The claims spouted at the supply chain hearings were just another attempt by Big Tech to continue pressuring the Biden administration to go back on its decision, thereby insulating them from public-interest regulation that could force them to rethink their exploitative business models. If it wasn't already clear, the hearings once again demonstrated the steadfast commitment of Big Tech to putting their profits above the legitimate interests of the American public.

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