Monopolization of key parts of the Information and Communications Technology (ICT) industry is causing political and economic harm

Open Markets Institute submitted a public comment in response to a request by the Department of Commerce on September 20, 2021, to assist the Secretary of Commerce and the Secretary of Homeland Security in preparing a report required by Executive Order 14017 on “America’s Supply Chains.”

The report is based on the Biden administration’s intentions to strengthen America’s supply chains, including for Information and Communications Technology (ICT) hardware.

In the comment, Open Markets urges the Biden administration to:

• Use trade law, export controls, and other related tools to encourage diversification in global production of ICT hardware.

• Expand antitrust policies to take account of geographic and ownership consolidation within supply chains.

• Require corporations that import ICT hardware into the United States to diversify their contract manufacturing in ways that force contract manufacturers to distribute their manufacturing capacity more widely.

• Require both U.S. firms and their contract manufacturers to stress-test and map networks of suppliers, manufacturers, distributors, and other elements of logistics networks to identify bottlenecks in the ICT supply chain.

Read the full letter below or download here.

Additional reading:

• “Built to Break: The International System of Bottlenecks in the Era of Monopoly,” Barry Lynn, Challenge Magazine, March/April 2011. In this article, we update the basic thesis from End of the Line to account for lessons from the Lehman crash of 2008 and the Tohoku disaster of March 2011. This is the most concise, comprehensive explanation of the nature and origins of the problem.

• “How the United States marched the semiconductor industry into its trade war with China,” Chad P. Bown, Peterson Institute for International Economics, December 2020. Paper describes the economic and geographic transformation of the semiconductor industry and efforts by U.S. policymakers to weaponize trade policy targeting the industry’s supply chain.

• “Systemic Supply Chain Risk,” Yossi Sheffi and Barry C. Lynn, The Bridge, Fall 2014. The first article in which an engineer recognized the systemic nature of international production arrangements and the potential for cascading crashes.

• “War, Trade, and Utopia,” Barry Lynn, The National Interest, Winter 2006. A straightforward discussion of the politics of industrial interdependence and dependence in a system marked by extreme concentrations of industrial capacity.

• End of the Line: The Rise and Coming Fall of the Global Corporation, Barry Lynn, Doubleday, New York, August 2005.