Articles

Democrats hurt small business when they attack Big Tech

By Representative Kevin Hern for The Hill

Washington, DC, July 29, 2020

Small businesses are under siege. First COVID-19 shut them down; then protesters and rioters shattered windows and mayors imposed curfews. Now, everyone is hoping we don’t have a second wave of COVID-19 while working to rebuild the economy.

Businesses adapted almost overnight, adjusting to operate in the new normal. Digital technologies and platforms played a key role for many small businesses. Technology has allowed small businesses to keep their virtual doors open, even when Main Street storefronts are closed. After months of hardship, trial and error, and cautious reopenings, those virtual operations are in danger with policies coming from Democrats on the House Judiciary Committee.

Historically, brick-and-mortar small businesses used digital technology to strengthen relationships with existing customers and extend business beyond their immediate communities. They built websites with Shopify and Squarespace, sold products on eBay and Amazon, and used Google, Facebook, and Yelp to advertise and promote their products. These large digital companies offered free and low-cost services that became increasingly important to small businesses. Before coronavirus, these services were not necessary in many small towns, but the pandemic turned those optional services into essential necessities.

Since March, small businesses have become increasingly reliant on digital platforms. A recent study by the Connected Commerce Council found that 74 percent of small businesses relied more on digital tools during the COVID-19 crisis than before. More than 30 percent of small businesses said that without digital tools, they would have shut down at least part and perhaps all of their business during the pandemic.

But Democrats don’t seem to get it. In the COVID-19 environment, when small businesses are working triple-time just to survive and are increasingly relying on digital solutions, House Judiciary Democrats would attack the very digital platforms keeping Main Street America afloat. For several months the subcommittee has been investigating digital platforms, and all of Washington is anticipating the upcoming hearing when four Big Tech CEOs will be in the hotseat. We know that the so-called solutions proposed in this hearing will follow Democratic tradition – over-regulatory, interventionist and anti-capitalist.

It is indisputable that Facebook, Google, and Amazon are giant American success stories. Each one started as a small business in a garage or a dorm room, with minimal resources and a big idea. They’ve turned into some of the largest tech companies in the world. Shouldn’t this be celebrated? These digital platforms are offering low-priced and remarkably effective services to small businesses, doing their part to help our small businesses innovate and survive this pandemic. If small businesses are happy customers, then what is the problem that justifies new mandates on the digital economy?

We all know that the tech platforms’ free and low-cost digital services will become less free, more expensive and less effective if the companies are broken up or forced to change how they operate. Naturally, these costs will be borne by their customers, large and small businesses alike. How does that help our economy recover?

It’s notable that in free markets, and especially in digital industries, business winners are rarely still winning ten years later. Microsoft was once considered a monopolist in computer operating systems and productivity software. Until a few months ago Zoom was a little-known video-conferencing service. And iTunes was the biggest digital music provider until Spotify came along.

 

Attacking companies because they are successful doesn’t promote American economic freedom. I ran for Congress because I saw how few people in this chamber understand the businesses they regulate. We should promote the original ideals of our Founding Fathers: personal freedom and economic freedom. Rather than trying to break up Big Tech, we could use this hearing to discuss the role these platforms play in the freedom of speech at home and abroad.

Perhaps the Democrats’ report will quaintly suggest that all Americans should live in small towns, and all businesses should be mom-and-pops, but that’s not how our free-market economy works. In the digital economy, small businesses and large businesses are inextricably connected by their mutual success – and that’s a reason to celebrate.

Rep. Kevin Hern is ranking member of the Committee on Small Business Subcommittee on Economic Growth, Tax, and Capital Access.