Tech Regulation Can Protect U.S. Security and Competitiveness, Not Harm It

Graham Brookie is the senior director of the Digital Forensic Research Lab (DFRLab) at the Atlantic Council; Rose Jackson is director of its Democracy & Tech Initiative; and Kenton Thibaut is its resident China fellow.

The lack of cohesive tech regulation in the United States is a national security risk. Setting the rules for the digital world is our era’s most consequential expression of power and the United States is all but absent in the debate. Meanwhile, undemocratic countries like China drive forward a clear vision and strategy to dominate the global internet; one that is bad for American competitiveness and global human rights, and relies on leveraging gaps left by a divided democratic world.

As various proposals are considered by the U.S. Congress, the question of domestic regulation’s impact on national security has taken center stage. Some prominent industry leaders have argued that regulation is counter to national interests. We are overdue for a real conversation on the trade-offs at play in setting standards for the tech industry at home while competing – and leading – abroad. Having a meaningful conversation on these issues requires us to address the following:

First, when it comes to technology, the domestic and international realms are inherently linked. Because technology is global and systemic, American national security interests are directly impacted by our domestic decisions on everything from data protection to competition. Not setting our own rules lets the rest of the world decide for our citizens and companies.

Second, while data is key to innovation, we shouldn't surrender our ability to decide how that data is amassed and used. Data collected for innovation via surveillance technology or without privacy standards doesn't have to be a Faustian bargain for citizens in a hyperconnected world.

Third, we have to be clearer about what technology we’re talking about. Much of the current debate conflates semiconductors and quantum computing with online marketplaces and social media platforms. The type of technology or industry matters. Not all tech is alike.

Finally, economies are globalized and technological change is happening at a faster pace than at any point in human history. Setting standards that govern the next breakthrough technology will be essential to our long-term competitiveness – at home and abroad. In other words, American rules and regulations can be critical to our national security.

The lack of American leadership means ceding the debate and risks an eventual world where Chinese digital governance standards, and its authoritarian approach, becomes a norm.

We aren’t having this conversation in a vacuum.

China is already setting the terms for the digital world. The Chinese Communist Party (CCP) has put significant effort into shaping the agendas of international standard setting bodies and moved rapidly over the past year to establish an extensive domestic regulatory framework. Since November 2020, it has enforced sweeping antitrust measures on its biggest companies, banning mergers and slapping major fines on firms like Alibaba, Baidu, Meituan, Bytedance, Tencent, Didi, and JD. China also passed two key laws governing the use of private data, setting limits on the use of personal data for Chinese companies, while providing more avenues for state access. Its 2021 Data Security Law also covers data processing and management activities outside of China that may impact Chinese national security. The extraterritorial effect of the law will spur reciprocity agreements with other countries, and international firms will have to comply, including US companies.

The CCP strategy is designed to re-enforce state control. But these moves also have a clear global aim. In an October speech, China’s President Xi Jinping emphasized the urgency of Beijing’s need to push through its regulatory changes to shape international digital governance in a way that suits its needs.

The CCP understands that shaping the international system to its advantage helps it drive forward its interlinked industrial, commercial, and geopolitical strategies. Setting these rules is an important sphere of competition.

Democracies – including allies and partners – are not waiting for the United States. Growing frustrated by a proliferation of challenges, our allies are seeking to shape global norms and set rights-based frameworks of their own; whether the European Union’s Digital Services and Markets Acts, the UK’s Online Harms Bill and Competition Authority, and onward. But this distributed “go-it-alone” approach drives a wedge through hopes for a rules-based global system and lets everyone but our elected government set the rules for our companies and citizens.

The lack of American leadership means ceding the debate and risks an eventual world where Chinese digital governance standards, and its authoritarian approach, becomes a norm. That would be a world in which the American people have fewer protections, American businesses are less competitive, and American national security and global democracy is weakened.

The good news is there is overwhelming bipartisan agreement that action is needed, and in the United States we have the privilege and responsibility of an honest conversation about our country’s approach to challenges that will shape our world for generations to come. It’s time to lead. Our national security depends on it.