By: Ilana Siyance
New York City business leaders are worried that the record high investments pouring into NY startups could be stifled by new measures being pushed in Congress in an effort to curb big tech giants.
As reported by Crain’s NY, the House of Representatives is trying to introduce antitrust laws to limit the growth and monopoly power of major technology companies including Google, Amazon, Facebook and Apple. In the process, however, the measures may cause “irreparable harm to the innovation ecosystem in New York City,” says a letter sent by the leaders of the five borough chambers of commerce on Friday to the city’s Congressional delegation.
Last month, the House’s Judiciary committee pushed a legislation package including six bills, which would add control to antitrust agencies, prevent platforms from selling or promoting their own products over competitors, and make it harder for big techs to buy out their rivals.
Business leaders and critics are pointing out this last factor as a problem. “Many of those companies, particularly small startups, want to grow big and compete or sell themselves to tech companies,” said Thomas Grech, president and CEO of the Queens Chamber. “That is where the market forces come in and that’s what we want to make sure does not get stifled.”
Stopping big tech from acquiring rivals is a central point in the act, entitled the Platform Competition and Opportunity Act of 2021, which was sponsored by Rep. Hakeem Jeffries, a Democrat who represents parts of Brooklyn and Queens. After all, it is acquisitions which allow monopolies to grow and limit competing options for consumers.
On the flip side, however, startups only have the drive to succeed because they hope one day to make it big, or make big money selling the company to one of the biggies. In Q1 of 2021, New York-based startups raised a whopping $10.2 billion from venture capital investors. “For so many entrepreneurs, the prospect of an acquisition is what fuels venture capital funding and ultimately drives continued innovation and product improvements,” the chamber leaders wrote in Friday’s letter.
As per Crain’s, the introduced package of bills still needs to be approved in the House and then the Senate, which will no doubt spark expensive lobbying efforts from technology interests. As the city begins its recovery following the pandemic, there is no doubt that the technology industry will play a key role in NYC’s economic future.
