FTC’s Aggressive Antitrust Enforcement Threatens U.S. Advantage in AI Development

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According to a new study from the Competitive Enterprise Institute (CEI), the Federal Trade Commission’s (FTC) newly aggressive antitrust enforcement toward tech companies threatens the U.S. advantage in artificial intelligence (AI) development and undermines the U.S. economy.

Because the progress of AI is a central component of the U.S. competition for technological superiority with the Chinese Communist Party (CCP), that means the FTC is now a threat to America’s national security as well as its economy.

“Under the leadership of Chair Lina Khan, the FTC’s overly aggressive approach to antitrust enforcement sacrifices U.S. economic competitiveness for the pursuit of domestic economic goals. That’s a dangerous concession in light of China’s commitment to superiority in the race to develop AI,” said study author and economist Joseph W. Sullivan.

The report, “A Global Antitrust Paradox? The FTC is harming America’s race with China,” finds that in the best-case scenario, the Khan agenda at FTC will slow down the pace of innovation in technologies, namely AI. In the worst-case scenario, it will result in a CCP-ruled China displacing the U.S. as the world’s preeminent geopolitical power.

The report also finds when the stringency of competition policy rises, typically, inflation rises and real economic growth falls. It is the first paper to use economic data from countries around the world to document this tradeoff between macroeconomic outcomes and changes in competition policy. And the results show the loss of national economic competitiveness that the FTC’s newly aggressive antitrust agenda would bring.

For instance, American officials in favor of stricter antitrust enforcement sometimes reference countries like Canada, France, and China. The report shows that these countries are cautionary tales to be avoided rather than models to be emulated when it comes to antitrust. According to the paper, if the U.S. were to adopt the competition policies of Canada, U.S. Gross Domestic Product (GDP) would be $134 billion lower and consumer prices would be between 0.5 and 0.98 percent higher.

“Khan’s agenda at the FTC is a bad idea that could scarcely come at a worse time. To say the fate of the free world depends on U.S. competition with the Chinese Communist Party is only to paraphrase what is now a bipartisan consensus,” said Sullivan. “Because stricter antitrust harms real economic growth and raises inflation, even if it benefits some within a country, it ultimately causes the country to fall behind the rest of the world.”

Read the full report on CEI.org.