In a curious case of David coming to the aid of Goliath, more than 1,600 small businesses (SMBs) led by Washington, D.C.-based advocacy group the Connected Commerce Council (3C) are asking the House Judiciary Antitrust Subcommittee to end its year-long pursuit of Big Tech. The reason is simple: COVID-19 is making SMBs dependent on interoperable connected tech.
A February 23 statement from 3C said that “more than 1,600 small business owners and advocates today called on state and federal policymakers to support small business partnerships with digital platforms. As the House Antitrust Subcommittee begins hearings focused on digital platforms, small businesses worry that policymakers fail to recognize how important digital platforms are to small businesses.”
During the Feb. 25 kickoff hearing, “Reviving Competition, Part 1: Proposals to Address Gatekeeper Power & Lower Barriers to Entry Online,” subcommittee members heard the other side of the story, as Eric Gundersen, CEO of Mapbox, a geolocation data services firm, described shortcomings of the current dominance of certain players, namely Google.
In prepared comments, Gunderson testified that “Maps will be critical to a huge number of future industries and technologies as well, from drones to delivery, to electric vehicles, to autonomous vehicles and augmented reality navigation.” But, he added, “I need Google Maps to stop bullying and intimidating customers who want to both pay for Google Search and to use Mapbox maps. The problem is that Google uses its dominance in search to suppress competition in maps.”
Considering the 1,600 SMBs that have joined 3C in its support of what it calls “Digital Safety Net tools” created by Big Tech, not all SMBs view or value platforms the same way in 2021.
SMBs Feel Access To ‘Digital Safety Net Tools’ Is Under Attack
3C noted that “throughout the COVID-19 pandemic, millions of small businesses have relied on Digital Safety Net tools and platforms, including digital advertising, online marketplaces, social media, and financial and organizational software, to stay in business. However, government investigations and lawsuits against digital platforms, marketplaces and services threaten small businesses’ access to the Digital Safety Net and the economic recovery it enables.”
Other witnesses countered. In her remarks, Charlotte Slaiman, competition policy director at nonprofit watchdog group Public Knowledge, spoke to policymakers of the difficulty SMBs face against the massive network effects of platforms, and their role as gatekeepers of web search. Slaiman testified that “network effects, especially prevalent among these digital platforms, are a powerful barrier to entry. When your sister joins Facebook, the value of Facebook goes up for you, because it’s now a place where you can see photos of your nephew. The value of Facebook also goes up for all of your sister’s friends that can now connect with her. These increases in value are happening across the network all the time as each new user joins Facebook.” Network effects are vastly amplified by businesses’ use of platforms, Slaiman noted.
Connected Commerce Needs Cooperation, Not Investigation
Concerns of policy wonks and lawmakers don’t seem to parallel those of an SMB community that is increasingly united behind the Connected Commerce Council’s efforts to call off the DC dogs.
Commenting on the “year of agony” that 2020 represented for small businesses, 3C President Jake Ward said, “many of them are still taking orders and serving customers because the Digital Safety Net is real, and it kept millions of small businesses open during the pandemic. Elected officials must understand that digital tools are so effective for small businesses because the companies offering them are large, interconnected, constantly innovating and engaged in fierce competition for small businesses’ dollars.”
Ward concluded that “rather than launching investigations, the government should empower small businesses and invest in increasing access to educational resources for digital tools to help small businesses survive and prepare for the next crisis.”
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