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Good riddance: TikTok’s headed to a forced divestiture

Earlier today, President Joe Biden signed the supplemental appropriations bill HR815 into law, which contains a targeted and limited forced divestiture of the social media app TikTok, previously passed by the US House in the form of the Foreign Adversary Controlled Applications Act.

The Chinese technology firm Bytedance Ltd. will have 270 days from today to undergo a qualified divestiture of TikTok, or otherwise face stiff fines and an eventual removal from domestic app stores.

The Consumer Choice Center has supported the forced divestiture of TikTok since at least 2020, when a similar proposal was introduced by then President Donald Trump via an executive order.

The version approved by both the US House and Senate, and signed into law by Biden, is much more targeted and respects the precedent of national security based forced divestitures, as we laid out here last year.

We applaud the efforts of the various members of both chambers, as well as President Biden, for following through on this reasonable and necessary measure to protect Americans from the unique privacy and security risk from entities tightly controlled by the Chinese Communist Party.

In recent years, the default mode for the federal government has been to wage a regulatory war against American tech companies, all the while leaving the Chinese Communist Party-linked app TikTok to grow uninhibited. This latest law is a more appropriate use of government power, and will hopefully lead to increased competition and better data security practices among social media companies in the US and the world.

In our own view, it’s not necessarily that Bytedance should sell TikTok and its US ssets to an American company, though that is what this new law will require. Frankly, any legal change that would move its legal headquarters and governing charger to any liberal democratic country would be perfectly acceptable, as that would provide much more security and accountability to its hundreds of millions of users globally.

While this law represents a balanced measure of promoting appropriate tech innovation, data privacy, and consumer choice, we would be remiss if we did not address the mistaken notion that this is only the opening salvo in a general “war on tech”.

Rather, we believe the forced divestiture of TikTok is a unique and special case, isolated to the concerns that the link of the firm’s owners to the Chinese Communist Party presented. It is in no way a permission slip to engage in punitive antitrust or regulatory actions against our own tech firms that follow existing laws and provide benefits to hundreds of millions of consumers.

Consumers have been concerned about the specific data arrangements with Chinese-owned TikTok for some time, and this extraordinary case has now been handled used appropriate and constitutional measures. There have been varying interpretations of what this law would represent, including whether it would apply to other firms or services, and how it could potentially be abused by the current or future presidential administrations.

Thankfully, the law as written is clear, concise, and targeted specifically to this case. This is not something that can be said often.

While it’s a day to celebrate, and citizens in liberal democracies should rejoice, it should be seen more than anything else as an example of a successful campaign to rid a popular social media app of the foreign data risks that it posed to ordinary citizens. Nothing more and nothing less.

Good riddance.

To Tackle China, the U.S. Should Invest More in Africa

The Biden administration has requested that Congress approve an $80 million package to finance the newly launched Prosper Africa Build Together initiative. The project will focus on fostering trade and investment between the world’s poorest continent and the United States. Given Africa’s ambitious free trade aspirations and China’s ever-growing obsession with the continent, such a move couldn’t come at a better time.

The past few years can hardly be seen as the golden age of free trade in the West. Trade wars combined with persistent attempts to make trade woke—through the integration of environmental or gender causes—have undermined economic exchange globally. However, while European Union governments and the U.S. have imposed sanctions, blocked exports as part of COVID measures, and failed to negotiate new agreements, Africa has been silently making strides toward its own free trading future—with China’s help.

Founded in 2018, the African Continental Free Trade Area (AfCFTA) is the largest free trade area in the world in terms of participating countries. By removing 90% of tariffs on goods traded among 54 African countries-signees within five to 10 years, the AfCFTA looks likely to become the biggest free trade entity since the 1995 launch of the World Trade Organization. According to the United Nations Economic Commission for Africa, the agreement will boost intra-African trade by 52% within five years.

As of 2019, intra-African exports accounted for 16.6% of total exports. For comparison, in Europe, the share was 68.1%. If fully implemented, the AfCFTA has the potential to put the continent, long crippled by poverty and corruption, on the path of lasting prosperity.

For international trade, the AfCFTA will mean clearer customs checks and unified market access rules, which could hugely benefit the United States. Africa could become the largest market for the automotive industry. In 2018, Volkswagen and Peugeot Société Anonyme opened their first car plants in Rwanda and Namibia, respectively. Car imports from Africa could become a great alternative to the European imports.

Although ambitious, the AfCFTA is also riddled with implementation problems. Decades of socialist African governments whose main objective was their own enrichment have resulted in substantial infrastructure problems, among other things, in many countries. The construction and modernization of infrastructure combined with establishing efficient customs check procedures is key to making the AfCFTA succeed.

This is where China has stepped in to fill the gap. Last November, Chinese Foreign Minister Wang Yi (pictured) said that his government “will provide cash assistance and capacity-building training to its [AfCFTA] secretariat.”

Such support for the AfCFTA is not surprising. Over the years, China has made itself indispensable for Africa’s leaders. Between 2003 and 2019, Chinese foreign direct investment in Africa has increased from $75 million USD in 2003 to $2.7 billion USD in 2019. There is no sign of this trend losing momentum.

Although it can be seen as beneficial to Africa’s development, active Chinese participation in Africa’s development is increasingly worrisome. There is no such thing as free Chinese money. By investing in Africa, China is making the continent indebted, and it won’t hesitate to ask for something in return. Knowing China’s appetites—taking the port of Hambantota in Sri Lanka is one example—it is not hard to predict what will happen. Aside from active political involvement, China will also ask for preferential access to the AfCFTA once it is fully functioning.

Africa presents many opportunities for the United States. Almost all African products can freely enter the U.S. through the African Growth and Opportunity Act, a trade preference program launched in 2000. The U.S. has also formally committed to supporting the AfCFTA, but its impact is negligible compared to that of China.

More active engagement from the U.S. in AfCFTA is crucial financially and ideologically. The foundations laid by the AfCFTA today will determine the continent’s fate. U.S. assistance in the form of investments and general support will be key in shaping a better and freer tomorrow for Africans, revitalizing trade globally, and counteracting China’s influence.

Originally published here

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Some Bright Spots In President Biden’s Executive Order on Competition

Earlier this month, as Americans finished up the 4-day work week to enjoy midsummer weather, President Biden unveiled an executive order on promoting competition in our economy.

While it contains several aspects that could negatively impact consumers, there are also some bright spots that could help spark new innovations, remove red tape, and help reduce prices.

For one, Biden’s executive order creates a new White House Competition Council, made up of various department and agency heads. The council will address “overconcentration, monopolization, and unfair competition,” hoping to empower consumers and better police powerful industries.

It aims to reduce barriers to entry for new market competitors. This will be a key forum for changing laws, regulations, and taxes that all too often restrict competition and consumer choice. That is a positive step.

Also laudable are rules on hospital price transparency, easing occupational licensing, and the prospect of open banking. But removing harmful subsidies that raise prices for consumers, including for farmers, airlines, and Amtrak, would help bolster competition even more.

Unfortunately, too much of Biden’s focus is on regulating business rather than freeing up outdated rules.

One example is the focus on antitrust provisions that seek to break up monopolies and redefine 21st-century antitrust actions. 

This is commendable, but only if agencies uphold the legal principle of the consumer welfare standard, ensuring that antitrust focuses on how consumers, not markets, are impacted. Ideological trustbusting could end up harming consumers and small businesses that rely on those companies.

Lately, lawsuits against various tech giants have been rejected because states and agencies have not been able to prove that certain mergers and acquisitions — such as Facebook’s 2011 purchase of Instagram, once deemed as laughable — were monopolistic.

Rather than trying to break up companies, the administration should focus on areas where regulations are propping up companies and bad regulations at the expense of you and me.

Large airlines like American Airlines have received bailouts for decades, while low-budget airlines without sway in Washington are essentially regulated out of contention. Allowing bankruptcies and consolidation would actually help improve services offered to passengers while saving taxpayers money.

Scrapping fossil fuel subsidies, high permit fees for electric vehicles, and repealing cabotage laws such as the Jones Act to allow foreign ships and airlines to serve American ports and airports, could also help reduce prices and improve consumer choice.

Though Biden is an Amtrak fan, his administration should welcome competition. That would mean allowing private railway firms to use existing rail lines, and scrapping the planned $80 billion in subsidies in the massive infrastructure bill currently sitting in Congress. In 50 years of service, the quasi-public Amtrak has failed to turn a profit at least once. Getting out of the way so private competitors could compete would be a huge boon to consumers and innovators.

For the alcohol market, Biden is on track. He outlines “unnecessary trade practice regulations” that artificially raise the prices of our favorite beers, wines, and spirits. But state monopolies on the sale of spirits, as well as uneven taxation between classes of alcohol, are classic cases where consumers would benefit from a more competitive market.

Promoting the interests of consumers, especially those who benefit from market innovations and smart policy, is a bold and needed change from our federal government. If they are to succeed, however, it will require wholesale retooling of outdated rules and regulations, not just increased scrutiny on big business.

Originally published here.

Biden’s broadband plan may hurt providers, consumers

It is no secret that access to reliable, high-speed internet is more important now than ever before, especially given how we spent this past year. We now rely heavily on virtual connections for school, work and perhaps a few never-ending Netflix marathons in an attempt to stay sane throughout lockdowns.

With a more online life, it’s not surprising that broadband usage increased 40% over the last year. Many suspect this level of demand for broadband will continue, but there are millions of individuals across the country who do not yet have access, including 368,000 rural Michigan households.

It’s estimated that there is over $2.5 billion in potential economic benefit that is lost among Michigan residents disconnected from the internet, making it clear that we need to find a solution to end this digital divide.

President Joe Biden recently proposed $100 billion to expand broadband through the American Jobs Plan. While this may seem like a worthy infrastructural investment to some, the fine print of the plan proposes lackluster solutions that create a stormy future for Michigan consumers.

A glaring issue is the prioritization of government-run broadband networks with “less pressure to turn profits and with a commitment to serving entire communities.” It’s well documented that these networks are ineffective 𑁋 a Phoenix Center study found that prices in markets with a municipal provider are higher than those in markets without one.

Michigan allows municipal broadband networks only in unserved or underserved areas and if their benefits outweigh the costs. However, local governments have been giving municipal networks advantages over private providers by providing subsidies and privileged regulatory treatment to showcase the illusion of compliance.

This happened recently in Marshall, and the results were dreadful. According to a report released by the Taxpayers Protection Alliance highlighting failed government-run broadband networks, Marshall’s fiber broadband network, called FiberNet, cost $3.1 million and serves only a fraction of its population. It’s worth noting that private broadband services are also available in Marshall.

Another key issue with Biden’s plan is that it exclusively prioritizes building out fiber broadband. While fiber may be a great option for some, it’s not always practical for rural communities due to the high costs and installation process required. Rural households can be located miles apart, and with fiber installation costing as high as $27,000/per mile, the estimated demand from rural communities often does not offset the costs of building fiber networks in those areas.

Innovative solutions like Elon Musk’s Starlink project, which aims to provide low-cost satellite broadband internet access across the globe, should be encouraged. By the end of this year, there will be over 1,000 satellites providing internet to more than 10,000 customers worldwide through Starlink. This is an exciting development because satellite networks are often cheaper, more efficient and can provide faster speeds to rural households than fiber.

The final major issue with Biden’s plan is that it vows to get America to 100% broadband coverage, but this doesn’t take into account all consumer preferences. According to Pew Research, 15% of Americans rely on smartphones and don’t have broadband services. Although it’s not certain as to why, one potential reason is the frequency of free Wi-Fi available in many public spaces which may result in some households opting out of paying for broadband.

To help Michigan live up to its full economic potential, it’s crucial that we get the 368,000 rural households access to high speed internet quickly. The state should embrace private internet service providers, practice technology neutrality by not favoring one broadband type over another and encourage more innovations that benefit consumers.

Originally published here.

raccoltana giusta

L’audace piano climatico di BIDEN non dovrebbe vietare la plastica

Riteniamo interessante riportare l’analisi che David Clement, del Consumer Choice Center per il Nord America, fa dei primi passi di Biden sul fronte della politica climatica e delle probabili decisioni sulla plastica.

Il presidente Biden ha subito riaffermato l’adesione degli Stati Uniti all’accordo di Parigi sul clima confermando le aspettative che vedono nella nuova amministrazione un deciso difensore dell’ambiente. Gli ambientalisti hanno applaudito le prime azioni del presidente, e stanno spingendo per fare di più. Greenpeace vuole che Biden dichiari guerra alla plastica e il comitato editoriale del Los Angeles Times ha sollecitato restrizioni sulla plastica monouso in tutte le future politiche.

È assai probabile che l’amministrazione Biden metterà la plastica nel mirino, ma ci si dovrebbe chiedere se i divieti sulla plastica sono, nel complesso, positivi per l’ambiente e il clima. Molte delle ricerche e delle esperienze di altri paesi ci indicano la direzione opposta. Quando la Danimarca ha preso in considerazione la messa al bando delle borse di plastica monouso per la spesa, le ricerche condotte hanno dimostrato che queste erano migliori rispetto alle alternative. I danesi sono arrivati a questa conclusione basandosi su 15 parametri ambientali, tra cui il cambiamento climatico, la tossicità, l’esaurimento dell’ozono, l’esaurimento delle risorse e l’impatto sugli ecosistemi. Hanno calcolato che i sacchetti di carta dovrebbero essere riutilizzati molte volte per avere lo stesso impatto totale di un sacchetto di plastica. Lo stesso vale per i sacchetti di cotone. Se l’ambiente è la nostra preoccupazione, vietare i sacchetti di plastica è un fatto negativo. 

Ricercatori svizzeri, esaminando i contenitori per alimenti destinati ai bambini, hanno concluso che l’uso della plastica rispetto al vetro ha ridotto le emissioni grazie al peso inferiore e ai costi di trasporto più bassi. Questa stessa metrica si applica anche a molto altro, dagli imballaggi alimentari ai beni di consumo quotidiani. Limitare la plastica spingerebbe senza dubbio i consumatori verso alternative ad alto impatto, andando così contro gli obiettivi di sostenibilità e riduzione dei rifiuti.

Questo non significa negare il serio problema dei rifiuti di plastica mal gestiti. Se Biden vuole agire per rimuovere i rifiuti di plastica dal nostro ambiente, dovrebbe considerare pratiche di riciclaggio innovative che si stanno dimostrando efficaci, come la depolimerizzazione chimica. Ci sono progetti innovativi in corso in tutto il Nord America guidati da scienziati e imprenditori, che partendo da semplici plastiche, alterano i loro legami chimici e le ripropongono in pellet di resina, piastrelle per la tua casa e persino asfalto stradale. Questo approccio permette all’innovazione di risolvere i rifiuti di plastica, crea posti di lavoro e lo fa con un impatto ambientale minimo.

Ma per coloro che riconoscono il potenziale di questa innovazione, rimane ancora il problema delle microplastiche, che spesso finiscono nelle nostre fonti d’acqua. Fortunatamente, gli scienziati hanno una risposta anche qui. Utilizzando l’ossidazione elettrolitica, i ricercatori sono riusciti ad “attaccare” le microplastiche, scomponendole in molecole di C02 e acqua, il tutto senza altre sostanze chimiche. L’amministrazione Biden potrebbe abbracciare la scienza che rende queste tecnologie scalabili e sostenibili.

Se il presidente Biden vuole ascoltare la chiamata alla difesa del clima, ha tutti gli strumenti a sua disposizione per farlo. Ma invece di approvare costosi e inefficaci divieti sulla plastica, dovremmo guardare agli innovatori e agli scienziati che stanno offrendo una terza via sui rifiuti di plastica. Questa sarebbe il vero endorsment della scienza per il 21° secolo.

Originally published here.

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