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California casualties in Congress’ effort to regulate Big Tech

In summary

Regulations targeting tech companies will impact small, minority- and women-owned businesses in California.

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By Julian Cañete, Special to CalMatters

Julian Cañete is the president and CEO of the California Hispanic Chambers of Commerce.

As Californians, we’re no stranger to the outsized impact the tech sector plays in our state’s economy. Nearly 2 million people are employed by the tech sector, resulting in an economic impact of more than $520 billion annually to California’s economy. 

Businesses, large and small, rely on this tech to run their business, order supplies, accept payment and communicate with customers.

Now, Congress is considering five antitrust bills that seek to regulate many aspects of tech’s ability to operate in and drive America’s economy. It is critical that members of the California Congressional delegation – the nation’s largest – not lose sight of the fact that any regulation targeting the biggest global tech companies will undoubtedly spill over and impact small, minority- and women-owned businesses.

For small business owners, particularly those owned by Latino, African American and Asian businesses owners, technology represented a lifeline that enabled us to keep the doors open during the COVID-19 pandemic. Today these businesses, and the consumers who shop at them, rely more and more on the digital tools to keep the lights on and the customers served than we did pre-pandemic.

On behalf of the California Hispanic Chambers of Commerce, which represents the interest of more than 800,000 Hispanic business owners in California, we are concerned about a package of bills pending before the House of Representatives – H.R. 3460, H.R. 3826, H.R. 3849, H.R. 3816, and H.R. 3825. This legislation, often referred to as the “basket of antitrust bills,” would have a detrimental impact on California’s technology sector as a whole, hurt California’s economy and negatively impact Latino business owners – large and small – who increasingly rely on technology to meet their needs.

For California businesses, workers and consumers, passage of this “package” would suppress wage growth and negatively impact consumers. For example, H.R. 3816, the American Choice and Innovation Online Act, would result in separate rules for online marketplaces than those governing brick and mortar businesses, creating a highly inequitable landscape for the many small businesses, especially for African American, Latino, veteran- and women-owned small businesses already struggling.

Coronavirus has wreaked havoc on the Latino community. According to the Centers for Disease Control and Prevention, Hispanics and Latinos are 1.7 times more likely to contract COVID-19 than our non-Hispanic white counterparts, as well as 4.1 times more likely to be hospitalized from COVID-19 and 2.8 times more likely to die from COVID-19. Additionally, we’re over-represented in the service industry, which has borne the brunt of coronavirus closures and struggle to this day to recover.

In spite of these sobering facts, Latino businesses and business owners have a positive story to tell. We have become the fastest-growing small business owners across the United States. We are entrepreneurial. We are community focused. We help drive California’s economy.

The California Hispanic Chambers of Commerce is concerned about the antitrust legislations’ unintended consequences – impacts that could deliver a harmful blow to Latino business owners and consumers – and ultimately to the state’s recovery – when both can least afford it.

It’s disturbing that members of Congress, most of whom possess little tech expertise, proclaim the need to “ensure competition” and “end monopolies.” When they offer “solutions” to this multifaceted issue, we should all take pause. Overly simplified statements may generate headlines but attempting to control a cutting-edge, incredibly innovative sector of our economy – one that is the envy of the world – must be undertaken carefully.

Business owners, workers and families understand the importance of ensuring a competitive playing field – it’s a hallmark of America and it’s what has helped Latino entrepreneurs thrive and prosper. But the five antitrust bills Congress is now considering will have wide-reaching consequences throughout the Golden State and across the country.

Every member of the California Congressional delegation should understand this conundrum – how do you regulate a fast-paced, innovative industry that changes more quickly than the legislative decision-making process? Proceed with caution if you decide to proceed at all.

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Julian Cañete has also written about lawmakers committing to small, minority-owned businesses, a proposal that would overturn policy that saves Californians auto insurance, creating pathways to postsecondary education.

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