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Former Defense Secretary Leon Panetta at the 2016 Democratic National Convention. Photo: Alex Wong/Getty Images

Twelve former top U.S. national security officials are urging Congress to hit pause on a package of antitrust bills in order to consider how breaking up tech companies could harm the U.S. in its competition with China, according to a letter obtained by Axios.

The big picture: Former Defense Secretary Leon Panetta and former Director of National Intelligence Dan Coats are among those arguing that imposing severe restrictions solely on U.S. giants will pave the way for a tech landscape dominated by China — echoing a position voiced by the Big Tech companies themselves.

What they're saying: In its quest to "undermine U.S. influence" and become "the world's leading innovator," the Chinese government employs policies designed to "create and support 'national champion' technology companies," the former officials wrote in a letter to House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy.

  • Antitrust legislation to break up U.S. tech giants — without targeting Chinese companies like Huawei, Tencent, Baidu and Alibaba — could impede innovation that is "critical to maintaining America’s technological edge," they argue.
  • The former officials praise the U.S. Innovation and Competition Act — a sweeping, $200 billion China-focused package overwhelmingly passed by the Senate in June — but call on Congress to study the national security implications of the House antitrust proposals before moving forward.
  • Since leaving public service, several of the letter's signatories have joined the boards of organizations that receive funding or do work for tech firms like Google and Amazon.

The other side: "These arguments are the same arguments that Facebook and Google have been making for a very long time in an effort to avoid regulation," Rep. David Cicilline (D-R.I.), the chair of House Judiciary's Antitrust Subcommittee, told Axios. "And I think actually that the evidence is just the opposite."

  • Cicilline — who is seeking a House vote on the bills this fall — argues that competition drives innovation, and that the lack of competition in the digital marketplace has led to a "very dangerous" decline in innovation that poses its own national security threat.
  • A spokesperson for Rep. Ken Buck (R-Colo.), the subcommittee's top Republican, told Axios: "Let’s be clear: Amazon, Apple, Facebook and Google are hurting U.S. competition by engaging in anti-competitive practices. Our bills will create competition."

Between the lines: The letter does not acknowledge China's own Big Tech crackdown, which has accelerated in recent months.

  • The Financial Times reported this week, for example, that Chinese regulators are seeking to break up payments app Alipay — Beijing's latest salvo against Jack Ma's Ant Group, whose record-setting IPO was scuttled by Xi Jinping last year.

The letter was signed by:

  • Robert Cardillo, former National Geospatial-Intelligence Agency director
  • Dan Coats, former director of national intelligence
  • Adm. James Foggo III, former U.S. Navy commander Europe-Africa
  • Sue Gordon, former principal deputy director of national intelligence
  • Rick Ledgett Jr., former NSA deputy director
  • Michael Morell, former acting CIA director
  • John Negroponte, former director of national intelligence and deputy secretary of state
  • Leon Panetta, former defense secretary and CIA director
  • Vice Adm. Jan Tighe, former director of naval intelligence and commander of the Tenth Fleet
  • Frances Townsend, former White House homeland security adviser
  • Dr. Michael Vickers, former undersecretary of defense for intelligence
  • Adm. James "Sandy" Winnefeld Jr., former Joint Chiefs of Staff vice chairman

Full text of letter.

Go deeper

Updated Oct 19, 2021 - Axios Events

Watch: A Hard Truths event on the tech industry

On Tuesday, October 19th, Axios Editor-in-Chief Sara Kehaulani Goo and chief technology correspondent Ina Fried examined the current inequities within hiring practices, workplace culture and development in the tech industry today, featuring Girls Who Code CEO Dr. Tarika Barrett and TechEquity Collaborative founder & CEO Catherine Bracy.

Dr. Tarika Barrett explained how to engage and empower young girls to learn tech skills, how the pandemic exacerbated access to educational tools, and how big tech companies can address the industry’s gender gap.

  • On empowering the next generation of tech leaders: “Having more representation of women and people of color in tech in particular, can actually be the difference we need to empower a pipeline of young people and girls of color to pursue the tech careers of the future.”
  • On the gender gap in the tech industry: “As we are simultaneously addressing this growing gender gap in tech and trying to prepare our girls and young women for these thriving, exciting careers of the future, we also know that it’s within an industry that continues to sometimes be the source of negative news and troubling instances of discrimination.”

Catherine Bracy highlighted how tech platforms and their business models affect the broader economic well-being of a community, and the importance of improving working conditions for different tiers of workers at tech companies.

  • On inequities for contracted employees at tech companies: “We have done research that shows that not only are they treated differently because of labor laws and whatever else, but they are also more likely to be members of underrepresented minority groups.”
  • On how tech companies can better support contracted workers: “We do think that if they’re going to contract out, that they should ensure with the vendors that they’re using to provide this workforce, that those workers have an equal level of protection, benefits, stability as their full-time workforce. I feel like that’s the least that they can do.”

Axios Chief People Officer Dominique Taylor hosted a View from the Top segment with Goldman Sachs Chief Operating Officer for Global Investment Research Gizelle George-Joseph, who spoke about how structural barriers affect labor market opportunities for minority communities.

  • “We talk about education, and six decades after Brown vs. Board of Education, 70% of Black students still attend a school where the majority of students are non-white. All of these have really broad repercussions for Black women and very large negative impacts on college graduation rates, on the labor market, and ultimately on our life outcomes.”

Thank you Goldman Sachs for sponsoring this event.

Oct 20, 2021 - World

Biden's ambassador nominee: "China is not an Olympian power"

Nick Burns testifying before the Senate Foreign Relations Committee. Photo: Sarah Silbiger/Bloomberg via Getty Images

President Biden's nominee to serve as ambassador to China delivered a stark assessment of the challenges the U.S. faces in confronting Beijing, but stressed that the rising superpower is "not all-powerful" and the West retains "substantial" advantages.

The big picture: Nicholas Burns, a retired career diplomat and former U.S. ambassador to NATO, used his confirmation hearing Wednesday to echo the growing bipartisan consensus that China poses "the greatest threat to the security of our country and the democratic world" in the 21st century.

Felix Salmon, author of Capital
2 hours ago - Technology

Facebook's scandals have been great for shareholders

Expand chart
Data: YCharts; Chart: Axios

Facebook has been embroiled in scandal for the past five years, and while the specific allegations change over time, a central theme is constant. Given the choice between commercial and moral imperatives, Facebook always seems to choose the option that is best for the share price.

Why it matters: Facebook's stock chart supports that narrative. Since the 2016 scandals alleging that the social network was infiltrated by foreign actors trying to influence the outcome of democratic elections, Facebook's revenues — and its stock — have been soaring.

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