Technology regulations through a national security lens

NDIA Policy Points: Technology Regulation Through a National Security Lens

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There has been much discussion in Washington, D.C. about the need for regulation and antitrust enforcement of large technology companies.

This is proposed through the Competition and Antitrust Law Enforcement Amendment Act of 2021, which aims to reduce the likelihood of monopolies, reduce mergers, reduce competition, reduce the concentration of political power and improve the quality of product development.

The bill states that “when dominant sellers exercise market power, they harm buyers by overcharging, reducing product or service quality, limiting choice, and stifling innovation.” This is not a new story for the defense industrial base, as many observers recall various abandoned procurements in the wake of actions initiated by the Federal Trade Commission.

For a long time, the government has been a major influencer in the industrial base, which makes sense as it is the largest customer. But how does this translate to the tech industry? For example, Google and Amazon are also government contractors and globally, like traditional defense contractors, they are competing against foreign adversaries like China.

The difference between traditional defense companies and technology is that the latter affects almost every other industry. Tech and cyber can be both a development tool and a weapon in the world of national security. But what are the implications of controlling big tech companies for US national security?

In the year In the summer of 2021, National Defense Industrial Association leadership commented on the Federal Trade Commission’s actions on vertical mergers and acquisitions in the defense industry. “Disappointing vertical mergers and acquisitions not only stifle the creative engine of American growth, but also threaten our national security,” he suggested.

When it comes to the technical and defense sectors, small enterprises – or unicorns – generally have the goal of being acquired by other companies. Sometimes the acquisition is unbalanced, but ultimately it leads to natural innovation and technological advances. Scale is needed for natural innovation and growth, and is especially important when there is no research and development funding. In addition, many defense contracting companies use advanced cyber technology in their military systems production and operational capabilities.

In the 2021 Interim National Security Strategy, the White House sets out issues related to the United States’ national interest. It has been made clear that Russia and China are the biggest threats to US national security that require more attention in terms of technology and capabilities such as cyber security.

The biggest threat to the United States right now is China and its massive technological and development activities around the world. One example is China’s Belt and Road Initiative. In the year This plan, announced by the Chinese government in 2013, is an economic and political strategic effort in various sectors and almost all regions of the world.

The issue of China’s global influence is such a concern that US government agencies have used students and academics to better understand its role in various regions. Recently, the State Department appointed both graduate and undergraduate students with regional and linguistic expertise to conduct open-source research on China’s various initiatives across the Middle East and North Africa.

According to this study, China’s major activities in Saudi Arabia, such as the development of transportation infrastructure, have been confirmed as the second largest area of ​​cooperation between China and Saudi Arabia involving military technologies. The third largest sector of cooperation involved transport vehicles. This information comes from open source research on Chinese developments in both English and Arabic in the Middle East and North Africa.

By imposing regulations on US tech companies, the government is limiting their ability to compete strategically with large Chinese tech companies in various regions and sectors. In particular, this affects significant areas of US national security. Middle Eastern countries such as Saudi Arabia have announced Vision 2030, which seeks to diversify and digitize advanced technologies in their economies in order to become less dependent on oil.

In July, President Joe Biden visited the kingdom of Saudi Arabia in part to discuss inflation and the role of oil in every sector. Regulating big technology through antitrust is a competitive point and weapon against China, and is neither consistent with an interim national security strategy nor conducive to innovation. Furthermore, it is worth repeating that the role of technology in all sectors has an impact beyond imagination.

The proposed legislation, which aims to regulate big technology through antitrust, will hinder the ability to be efficient in external relations and to prevent and mitigate adversary threats. It will also affect the defense industry base and the way civilians interact with these capabilities.

These facts should be taken into account when designing control strategies that have a significant impact on the country and when it is possible to work at the international level.

Kelsey J. Canfield is a junior policy fellow at NDIA.

Topics: Government policy