The Revolving Door Project periodically publishes guest contributions that it believes represent a valuable contribution to discussions of executive branch personnel and policy. The views expressed herein are the authors’ alone.
Since taking office, Secretary of Commerce Gina Raimondo has built a high profile for herself, leading some pundits to anoint her as a standard-bearer for the Democratic Party’s moderate wing. While Raimondo made an impression on the Hill for her visibility in Bipartisan Infrastructure Plan negotiations, the affairs of the Department of Commerce (DOC) itself continue to receive little fanfare. In a time of rising inflation and supply chain challenges, Americans deserve more than business as usual from the Department of Commerce.
Responsible for creating “conditions for economic growth and opportunity,” the full powers of the DOC must be leveraged to combat economic malaise. Since the modern department was established in 1913, the DOC’s powers have generally been neglected and poorly understood. That’s in part reflective of the DOC’s byzantine structure: it’s a seeming grab-bag of agencies that either don’t fit in neatly with any other department, or are located within the DOC as a result of 20th century political knife-fights.
Unsurprisingly, the DOC’s byzantine structure has led to numerous calls for its reorganization, with Barack Obama leading the most notable recent push. There’s no question that an economy-focused department that houses the National Oceanic and Atmospheric Administration (NOAA) solely due to a Nixon-era bureaucratic squabble is in need of reorganization. Confusion over the DOC’s duties means that its powers remain under-utilized across an array of issue areas, including top priority areas for President Joe Biden. Going forward, the DOC’s powers must be fully utilized to rein in corporate concentration and general economic malaise.
As President, Biden has pledged to combat monopoly power and skyrocketing consumer drug prices. The DOC houses the U.S. Patent and Trademark Office (USPTO), which is indispensable to solving both problems: it enables pharmaceutical monopolies by allowing patent extensions years after innovations have been made to a drug. In doing so, the USPTO has hindered innovation while contributing to pharmaceutical price-gouging. According to the Initiative for Medicines, Access & Knowledge, the most popular drugs in the United States have an average of 131 associated patent applications. It’s no coincidence that Big Pharma staggers applications “throughout the drug’s life cycle in order to maximize the exclusivity period” for financial gain.
While staunch anti-monopolists were chosen to lead the Federal Trade Commission (FTC) and the Department of Justice (DOJ) Antitrust Division, Biden has not taken the same approach to choosing USPTO personnel. The Supreme Court weakened the Patent Trial and Appeal Board (PTAB), one of the few avenues for public input into the patent process in 2021, making progressive leadership at the agency all the more urgent.
In a structurally racist economic system, it’s of no surprise that patent owners (as opened to patent users) remain overwhelmingly white. A good start to bridging the gap in patent ownership would be for the USPTO to start collecting demographic data, an idea already articulated in a bipartisan bill. Assuming that the Inventor Diversity for Economic Advancement (IDEA) Act of 2021 does not pass, the agency should move to unilaterally implement its provisions.
Going forward, the USPTO must prioritize patent quality over patent quantity: As noted by Dr. Shobita Parthasarathy, it took the U.S. “200 years to issue the first 5 million US patents” and just “17 years to issue the next 5 million”. This is a statistic that reflects the government’s acquiescence to corporate demands, not proof that innovation has increased exponentially.
USPTO leadership must seek a restructuring of advisory boards, such as the Patent Public Advisory Committee (PPAC), in order to incorporate the voices of public interest advocates. Indeed, the USPTO has long shown disinterest towards the input of public advocates. As Dr. Parthasarathy once noted, the USPTOs once registered the American Civil Liberties Union (ACLU) as a company “because it has no mechanism for understanding civil society.”
The DOC also houses the National Telecommunications and Information Administration (NTIA). It’s often overshadowed in the public eye by the Federal Communications Commission (FCC), which is a shame, since the NTIA wields enormous financial power within the telecoms space, and hasn’t been using it effectively. The NTIA received over $48 billion in broadband funding through the Bipartisan Infrastructure Plan to fund grant programs. Unfortunately, a 2021 annual agency report suggests that the NTIA is behind on distributing funds for programs like the Broadband Infrastructure Program and the Tribal Broadband Connectivity Program, which were supposed to have gotten money out the door last year.
The NTIA boasts that it is the agency “principally responsible for advising the President on telecommunications and information policy issues.” With the formulation of policy recommendations a key agency function, the NTIA needs to prioritize the insight of public interest advocates, not corporate interests. In the past, once-promising efforts such as the 2014 multi-stakeholder process on facial recognition technology collapsed following the withdrawal of advocacy groups after being sidelined in favor of corporations.
For his part, new NTIA head Alan Davidson has indicated that the agency will play a role in the struggle to rein in Big Tech monopolies. The agency’s scheduled report on the mobile app ecosystem is a solid opportunity to highlight Apple and Google’s monopolistic behavior in this sector. NTIA scrutiny of Apple and Google’s app market duopoly would be welcome given concerning recent reports that a DOC official wrote to European regulators in defense of Big Tech giants. Going forward, the DOC must work in unison to assist both the FTC and DOJ Antitrust Division’s efforts to curb the monopoly power of Big Tech giants.
Compared to other agencies with the DOC, the affairs of the Bureau of Industry and Security (BIS) have received significant attention. The BIS is responsible for the control of exports for reasons of either national security or general foreign policy matters. As noted by national security attorneys at Morrison & Foerster LLP, it is “unusual for the Bureau of Industry and Security to target companies headquartered in U.S.-allied countries.” As such, the BIS’ blacklisting of Israel-based tech firm NSO Group over spyware concerns is a promising development.
Unfortunately, mainstream coverage of BIS operations centers almost exclusively on how the agency can be utilized to give the U.S. an upper hand in its geopolitical conflict with China. The inclusion of “carve-outs” for U.S. allies in agency rules on hacking tools was a disappointing one. Rather than be used as a tool for Great Power competition, the BIS’ powers should be used to penalize companies that violate human rights and pose security risks, regardless of their country of origin. Decisions like the penalization of Wanbao Mining, a Burmese copper operation notorious for abusing human rights, should be applied across the board to hold harmful companies accountable.
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With the Biden Administration pledging to build a “worker-centered trade policy”, the role of the DOC in trade matters cannot be ignored. Generally overshadowed by the United States Trade Representative (USTR), the DOC’s International Trade Administration (ITA) administers antidumping (AD) and countervailing (CVD) duties. “Free trade” stalwarts have long derided these mechanisms, which help prevent foreign companies from undercutting markets through selling products below product cost, as “protectionist.”
The ITA must reject the corporate-friendly trade policy status quo and assess imports based on their impact on working families, and that should include the use of AD and CVD when necessary. As the ITA promotes direct foreign investment in U.S. industry, the agency must prioritize the promotion of clean energy technology abroad.
Described as the “only federal government agency focused exclusively on economic development”, the Economic Development Administration (EDA) received $3 billion from the American Rescue Plan to provide grants to local governments. Created to stimulate industrial growth in distressed communities, in the last decade the EDA has especially devoted its resources to growing tech hubs.
However, analysis from the Center for American Progress found that the EDA’s shift to focusing “on tech innovation as a key strategy for economic growth has left out economies that lack high-speed internet.” Going forward, the EDA must ensure that programs devoted to marginalized communities, such as the Indigenous Communities program, receive due care.
It is crucial that DOC agencies be utilized in conjunction with the rest of the federal government to combat corporate greed. As documented in the “Corporate Crackdown Project: Commerce and Transportation” report released in February 2022, the DOC’s role in building a fairer and more resilient economy is second to none.
Aidan Smith is a Senior Advisor at Data for Progress. In February 2022, he co-authored Data for Progress and the Revolving Door Project’s Commerce and Transportation report. The bulk of his research centers on matters of federal personnel, competition policy, and foreign policy, among others. The analysis in this guest contribution represents the view of the individual alone.
PHOTO CREDIT: “US Department of Commerce at sunset [explored]” by J Sonder is marked with CC BY-NC 2.0.