Tech Regulations Through a National Security Lens.

• Author: Canfield, Kelsey J.
• Position: NDIA POLICY POINTS

Throughout Washington, D.C., there has been much discussion regarding the need for regulations and antitrust enforcement on large tech companies.

This has been proposed via a bill called the "Competition and Antitrust Law Enforcement Reform Act of 2021," to reduce the possibility of monopoly formation, reduce mergers that will lessen competition, lessen political power concentration and exceed the quality of product development.

The bill suggests that "when dominant sellers exercise market power, they harm buyers by overcharging them, reducing product or service quality, limiting their choices, and impairing innovation." This is not a new story for the defense industrial base, as many observers recall various abandoned acquisitions as a result of actions initiated by the Federal Trade Commission.

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

The difference between traditional defense companies and tech is that the latter also touches just about every other industry. Tech and cyber can be both a development tool and the weapon itself in the world of national security. But what are the implications of regulating big tech companies on U.S. national security?

In the summer of 2021, National Defense Industrial Association leadership commented on the Federal Trade Commission's actions on vertical mergers and acquisition in the defense industry. It was suggested that "not only does discouraging vertical mergers and acquisitions stifle the innovation engine of American growth, but it also jeopardizes our national security."

When it comes to the tech and defense sectors, small enterprises--or unicorns--generally have a goal of being purchased by other companies. Sometimes the purchase is asymmetrical, but ultimately leads to natural innovation and technological advancements. Scale is required for natural innovation and growth, and is especially critical if research-and-development funding is lacking. Furthermore, many of the defense contracting companies use advanced cyber technology in their military system production and at operational capacity.

Within the 2021 Interim National Security Strategy, the White House laid out issues that the...