DV Journal

The European Union, which has dismally failed to foster a business climate where tech companies can thrive, is now aiming to cripple America’s tech leaders, potentially landing a body blow to the broader U.S. economy. More distressing is that the EU is being aided and abetted in its regulatory attacks by the Federal Trade Commission.

The EU and the United States have often squared off on economic issues.

For 17 years, under four presidents, two Democrats and two Republicans, the EU and the United States were involved in a high-profile fight over aircraft manufacturing. The EU has strenuously objected to provisions in the Inflation Reduction Act, which President Biden championed. Other areas of disagreement have included agricultural products, steel, aluminum and even hard liquor.

But the mother of all EU attacks on U.S. businesses has been launched as the European Commission begins enforcing the Digital Markets Act and other measures against large U.S. tech companies. Except for one Chinese company, all the EU targets are from the United States: Alphabet (Google), Amazon, Apple, Meta (Facebook and Instagram), and Microsoft.

Among those raising protests toward the EU is a bipartisan group from the House of Representatives, 12 Democrats and 10 Republicans.

The group wrote to Biden on December 15, expressing “grave concern” as “the recent decisions by EU authorities pose serious potential damages to America’s competitiveness and security interests.” They also call out Europe’s parochial interests, saying, “The EU’s ‘digital sovereignty’ agenda has repeatedly applied one set of rules to American companies and a different, more favorable set of rules to European and foreign firms, including Russian and Chinese firms.”

Former president Barack Obama also warned against the EU’s abuse of power.

In 2015, Obama took the EU to task for having a dismal tech sector and trying to compensate for that by taking down America’s tech leaders. President Obama said, “We have owned the internet. Our companies have created it, expanded it, perfected it in ways that they can’t compete. And oftentimes what is portrayed as high-minded positions on issues sometimes is just designed to carve out some of their commercial interests.”

Unfortunately, the FTC, led by its stridently progressive chair, Lina Khan, has been working quietly with EU regulators instead of standing up for U.S. companies. Khan has made several trips to Europe to meet with regulators and address the International Competition Network, an international regulatory group.

The EU has the administration right where it wants it for taking on U.S. tech companies.

For example, on March 30, 2023, there was a meeting between Khan, the U.S. Justice Department’s Antitrust Division Assistant Attorney General Jonathan Kanter, and Margrethe Vestager, the executive vice president of the European Commission, which enforces EU rules.

Vestager said, “Today’s meeting has proven once again how fruitful it is to keep engaging in close cooperation between the European Commission and the US competition authorities.”

To keep the United States on the sidelines as the EU goes after U.S. companies is a win for Vestager and the EU. To get U.S. support is a hefty bonus.

The stakes are high. Companies that fail to comply with the EU’s Digital Markets Act can face fines of up to 10 percent of their global revenues, or more than $150 billion from the five companies. This could hobble those companies in the United States, leading to retrenchments and even layoffs with cascading tech sector effects. It could also lead to stock market drops that harm tech-oriented portfolios and the broader equity markets.

Pandering to the EU to go after U.S. companies makes no sense. It needlessly cedes national sovereignty with no tangible benefits for the United States.

It is time for the FTC to disclose its largely secretive discussions with EU regulators, as many in Congress have already demanded. Furthermore, the FTC should cease and desist all interaction with the EU until further notice.

Progressive Democrats are demanding a ban on all U.S. oil exports, claiming it would drive down the price of gas at the pump. Nationalist Republicans are attacking the Biden administration for selling oil from the Strategic Petroleum Reserve on the open market, allowing millions of barrels to be bought by China.

But new research shows allowing U.S. oil and gas exports abroad leads to more wealth and work for Americans here at home.

The study, conducted by consulting and communications firm ICF on behalf of the American Petroleum Institute (API) and American Exploration and Production Council (AXPC), analyzed the six years since the ban on exporting U.S. crude oil was lifted in December 2015. The data showed enabling exports not only reduced global oil prices by an average of $1.93 per barrel but also added $161 billion to U.S. Gross Domestic Product (GDP) and added around 50,000 jobs to the economy.

“American energy leadership doesn’t just deliver significant benefits to Americans – fueling the U.S. economy and American jobs, delivering reliable energy, and helping put downward pressure on prices, but it also strengthens global security and supports our allies,” said API President and CEO Mike Sommers in a statement. “U.S. energy exports provide critical stability to the global market, support our allies across the world who depend on American energy to meet their needs, and strengthen American energy security here at home.”

If the United States is not exporting energy, Sommers argued, it leaves the door open for unstable nations or those with less stringent environmental standards to fill the void and reap the benefits.

“As this analysis shows, lifting the ban on crude exports in 2015 saved Americans money at the pump, supported thousands of good-paying American jobs, and reduced our country’s dependence on foreign oil,” said AXPC CEO Anne Bradbury. “At a time when Americans are hurting from the price at the pump, it’s clear that increasing the global supply of crude oil is critical to lower energy prices here at home and greater energy security around the globe.”

While the news may come as a surprise to some people and politicians, organizations including the Institute for Energy Research (IER) say this is precisely what needs to be done.

“In a basic economic sense, increasing the market for a product is likely to lead to increased production of that product,” IER Director of Policy Kenny Stein tells Inside Sources. “So, allowing U.S. oil to be sold to anyone at higher international prices naturally led to increased domestic investment and production.”

Additionally, a crucial problem with the crude oil export ban was U.S. refineries on the Gulf Coast were not designed to refine the types of light oil that were booming due to the hydraulic fracturing (aka “fracking”) revolution.

If the light oil could not be exported and domestic demand was limited, Stein said there was little incentive to continue investing in increased production.

“Lifting the export ban allowed domestic production to truly take off, turning the U.S. into a net oil exporter for the first time in more than 50 years,” said Stein. “Lifting the export ban should always have been considered a slam dunk policy move, all upside, and no downside, and this study shows that clearly.”

Linnea Lueken, Research Fellow with the Arthur B. Robinson Center on Climate and Environmental Policy at The Heartland Institute, said Biden administration policies are hurting, not helping prices.

“Recent restrictions on domestic oil and gas production, namely moratoriums on leasing and similar hostility have had the opposite effect,” said Lueken. “The U.S. is capable of being not only energy independent but energy dominant too.”

Environmental groups are not fond of natural gas or LNG exports. Organizations including Sierra Club have long argued that “natural gas production creates greenhouse gas emissions every step of the way” before it is ultimately consumed at, say, a power plant.

“Exported natural gas must be liquefied, kept cold, transported overseas, then regasified before it can be used,” wrote Sierra Club in a 2021 report. “All of these extra steps translate into CO2 emissions up to 21 percent greater than plain old natural gas.”

Still, supporters of natural gas say the U.S. is the best choice to go after these and other fossil fuels.

“Natural gas and LNG exports are particularly important to the U.S. economy,” said Lueken. “If production and exploration for oil and gas were allowed to continue the way it was before, and if an expansion of our export capacity was encouraged by removing unnecessary regulatory hurdles, we could also play a role in helping our European allies cushion the blow of potentially losing exports from Russia.”

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