Small Businesses in Virginia Face Harm from Big Tech Crackdown

Written by President & CEO Javier Palomarez. This article can also be found on The Virginian Pilot and the Daily Press.

If Glenn Youngkin’s victory in the recent election taught us anything, it’s that Virginia’s Hispanic community is far from a guaranteed Democratic stronghold. Youngkin beat Terry McAuliffe among Latino voters by 12 percent.

 Nationwide, Hispanics are showing themselves to be the most independently-minded voting demographic, open to crossing party lines when we believe politicians are not adequately addressing our concerns. Far from being single-issue voters focused only on immigration, today’s Hispanic voter is worried about the issues that concern every other American: inflation, jobs and the economy.

 Legislation that would hamper our community’s entrepreneurial spirit would be met with a decisive response at the ballot box. With the midterm elections looming and Virginia’s congressional delegation playing a pivotal role in which party controls Congress, lawmakers should be cognisant of how their voters will view efforts to target a handful of successful American companies that help level the playing field for tens of thousands of small and medium-sized businesses.

 Virginia-based small businesses – many of them started by entrepreneurs in minority communities – are working hard to make a comeback from the pandemic. Yet their congressional representatives are considering legislation that would set them back, once again. 

 Senators Klobuchar and Grassley recently introduced legislation to curb the growth of large tech companies like Google, Apple and Meta, as well as the retailer Amazon. Supporters claim the bill will protect small businesses, but this is only under the zero-sum assumption that as these companies grow, small business revenue collapses. It posits that their growth cannot be mutually beneficial. Senator Mark Warner has given credence to this false assumption by co-sponsoring the bill. It is not too late for him to change course, and I encourage Senator Tim Kaine to avoid falling into the same trap.

 Small business owners have raised their voice to oppose the bill saying it will hurt their ability to compete and grow. As similar legislation is considered in the House of Representatives, time is of the essence to ensure that this idea with all its unintended consequences, does not become a reality. The future of Old Dominion’s small business community – particularly it’s Hispanic entrepreneurs – depends on it. 

If this bill becomes law, treating “similarly situated business users” differently could be illegal. For example, Amazon could be banned from promoting a Richmond-based minority retailer’s clothing line, or the unique products of a Manasas-based ethnic supermarket, over others. If customer demand indicates a strong preference for a particular company’s products, online platforms would be prohibited from raising the profile of that company, as it could be perceived as discriminating against other sellers.

 These restrictions can make it difficult for Amazon to effectively operate a marketplace while competing with other large and growing platforms. Some experts say the bill could prohibit Google from showing its maps for a local business in the main search results and force Amazon to shut down its platform entirely. All of this stands to hurt the minority enterprises that partner with larger companies to grow. At a time when Americans are feeling the brunt of record high inflation, lawmakers would be tone deaf to pass legislation that will raise prices.

 Changing the rules of the road at such a volatile moment in our economic recovery is ill advised. Virginia’s businesses have hired staff and expanded their physical spaces all based on the premise that they would have access to a vibrant online network that would allow them to access customers across the country. 

 Tearing down barriers to entry is the formula for small business success. Virginia has a storied history of bipartisanship, moderation, and creating an economic environment that is conducive to private sector growth. And the Hispanic community has responded with a burgeoning business sector throughout the Commonwealth. Lawmakers should listen to what voters want before it’s too late.

 Javier Palomarez is the President and CEO of the United States Hispanic Business Council (USHBC).