U.S. Government Gets Tougher on Protecting American Innovation

In his first speech as secretary of State, John Kerry declared that U.S. economic competitiveness should be the centerpiece of American foreign policy. In the weeks following his appointment, the U.S. government has signaled a push to work with international partners to enhance U.S. global competitiveness and protect tech innovation at home. Two key elements of this strategy include continued harmonization of global antitrust laws and new efforts to protect American intellectual property from theft.

Recent developments in U.S. foreign relations have triggered federal action on antitrust policies and trade-theft protection: eminent U.S.-European Union (EU) free trade negotiations and the recent escalation of cyber crime against U.S. IP assets perpetrated by the governments of developing states like China and Iran.

Current global antitrust laws are a patchwork of national laws that, despite decades of international cooperation to harmonize policies, still create substantial barriers to market entry and participation by foreign firms. The U.S. government, in an attempt to foster global trade and enhance U.S. competitiveness, has worked closely with many emerging economies to reduce market friction. For instance, the United States currently provides antitrust technical assistance to each of the "BRIC" states: Brazil, Russia, India, and China.

Currently, one of the broadest gaps in global antitrust policy is between the U.S. and the European Union. While U.S. antitrust policy generally focuses on preserving competition that protects consumer interests, European antitrust policy is more focused on protecting marketplace competition. A policy backgrounder released last week by the Council on Foreign Relations argues that these different perspectives have created issues for U.S. tech companies that operate in Europe. An example would be the European Union's rejection of the GE-Honeywell merger in 2001, a merger that the U.S. government already had accepted.

The divide between U.S. and European antitrust regulations was brought to the forefront again early this year when Google and Microsoft came under fire from European regulators. While the U.S. government dropped a two-year investigation into Google in January, the EU announced that the tech company must make significant changes or potentially face billions in fines. These rulings represent some of the broadest policy divides on trade issues between the U.S. and EU and have become a hot-button topic for policymakers to address in upcoming negotiations.

The Obama administration also has announced that it will launch new efforts to prevent China and other countries from stealing U.S. intellectual property. Recent national attention on the role of state-sponsored cyber espionage by China and Iran has led the Justice Department to make trade-secret theft, particularly for tech-related intellectual property, a top priority. In the coming weeks, Department of Justice will bring cases of cyber espionage in hopes of deterring foreign governments from continuing to hack U.S. networks. These cases will be paired with efforts by the U.S. government to seek stronger agreements with foreign governments to pursue IP theft investigations in their own countries. It is important to note that China and Iran are not the only countries that are actively engaged in cyber crime against U.S. intellectual property. Russia and India also were cited as examples by federal officials.

The continued efforts to harmonize global antitrust policies and protect U.S. IP from cyber espionage are examples of how complex America's relationship is with its trading partners. While our government works with BRIC countries to standardize antitrust regulations, many of those same countries are engaged in stealing U.S. intellectual property. While acknowledging that the U.S. government has a key role to play in promoting our national competitiveness and protecting innovation, Secretary of State Kerry and U.S. policymakers have to confront tradeoffs in pursuing the goals of global free trade and national economic growth.