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Newsletter | Revolving Door Project Newsletter | April 24, 2024

National Small Business Week 2024

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Sponsored By Monopolies

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This Sunday marks the start of National Small Business Week (NSBW). Hosted by the Small Business Administration (SBA), NSBW is an opportunity to celebrate the contributions that small businesses make to both the economy and our communities. It also allows Biden and his surrogates to go on a press tour touting his achievements in helping small businesses compete in an economy increasingly characterized by corporate consolidation. 

Yet, once again, the Small Business Administration is squandering the potential of its signature event by partnering with the very same monopolistic corporations that Biden’s antitrust enforcers are fighting in the courts.

Last December, the Revolving Door Project, along with 12 other advocacy groups, called on the SBA to cease its partnerships with monopolies, citing the pernicious influence that corporations like Amazon and Visa have on competition and profitability for small businesses. It wasn’t just us—Small Business Rising, a coalition of independent business associations representing 300,000 members, wrote a letter to SBA Administrator Isabel Guzman citing concerns that NSBW partners are “posing the biggest threat” to small business interests. Unfortunately, the administration has not heeded these concerns. Sponsors of National Small Business Week 2024 include Amazon, Visa, Google, Meta, and Lockheed Martin. (Apparently, BigTech partnerships were not enough—SBA felt the need to get into bed with monopolistic arms dealers as well.)

NSBW 2024: A Glorified Ad-Buy For Monopolies

The main event of NSBW is a 2 day virtual summit, ostensibly intended to give small business owners an opportunity to network and “get expert advice.” But, looking at the event schedule, the whole summit seems more like a platform for large corporations to freely market their own products and services to small businesses. To be fair, sponsorship is not free, but $30,000 is a small price to pay for corporations looking to launder their public image and get a stamp of approval from the SBA. Some highlights of the virtual summit include: Accelerate Business Growth with the Help of AI sponsored by Visa; Unlock AI’s Potential for Your Small Business sponsored by Google; and Leveraging E-Commerce to Scale Your Business sponsored by, of course, Amazon. According to the SBA, these “expert-led” webinars are meant for small business owners to “empower their business with the latest strategies […] to catalyze growth and innovation.” But despite being targeted at small businesses, these seminars are pretty transparently marketing opportunities for the sponsors themselves.

Visa and Google are using their slots to promote Artificial Intelligence as an asset for businesses. Do Visa and Google have any financial interest in AI becoming an integral part of doing business? Of course! Last October, Visa announced a $100 million investment in generative AI. They also tout a VisaNet+AI initiative that uses AI to “address long-standing challenges and pain points for banks, merchants and consumers.” Visa knows all too well the “pain points” for merchants—the company is itself a major one. Visa and Mastercard control 85% of credit and debit card transactions, allowing them to extract outrageous swipe fees that hurt the bottom lines of small businesses. It’s unclear exactly how Visa aims to incorporate AI into its business model, but the corporation’s interest in pushing AI is hardly an altruistic venture aimed at streamlining small business growth.

Google is even more invested in AI, having already poured $2.5 billion into Anthropic, the company behind AI chatbot Claude, along with developing its own AI image generator. Aside from the conflict of interest in promoting AI, Google is facing two DOJ antitrust lawsuits for its search and digital advertising monopolies. Research from the American Economic Liberties Project shows how Google’s conduct substantially harms small businesses. Ads on Google are dominated by larger brands as small businesses cannot afford to spend as much. Meanwhile, the ad duopoly has decimated the profitability of local news while Google self-preferencing its own search products limits the visibility of local businesses, among many problems.

Amazon promoting e-commerce is laughably brazen self-marketing, but it bears mentioning that the FTC antitrust lawsuit against the BigTech giant alleges a plethora of practices that harm its small business sellers. In response to Small Business Rising’s letter last October, Amazon brushed off their grievances stating that they “share the same goal as the SBA […] for the continued success of small businesses. The allegations in the FTC lawsuit, however, paint a different picture. Namely, Amazon is accused of using its monopoly power to prevent sellers from offering lower prices on other markets and coercing sellers into using Amazon fulfillment services. 

The Biden administration has done a laudable job of fighting for small business by challenging pervasive monopoly powers. So why is the Small Business Administration not only uplifting these corporations, but allowing them to advertise the very products that harm small businesses? It’s a shame that Administrator Guzman and the Small Business Administration haven’t got Biden’s message of a “whole of government approach” to antitrust. By partnering with these corporations, the SBA is undermining the theory of these lawsuits and sending a mixed message to small business owners and workers about the loyalties of the administration. National Small Business Week should be about celebrating the local shops and businesses that are a vital part of building vibrant communities. It should certainly not be a government-approved press run for corporations to sugarcoat the anticompetitive practices underlying their business models.

Revolver Roundup

In revolver news, last week The Lever produced tremendous reporting about a conflict of interest concerning former Special Presidential Envoy Joseph Yun in his role as a chief negotiator with Pacific island nations. While he was negotiating military partnerships with these countries, Yun was also a special advisor for The Asia Group, a consulting firm that he has since revolved back to and whose clients include military contractors. 

Among the potential beneficiaries of the deal that Yun negotiated is Asia Group client (and NSBW cosponsor) Lockheed Martin, who already operates military bases and test sites in the region. As The Lever explains, Yun’s special designation role was not subject to the usual disclosure rules that would have revealed who exactly he advised at The Asia Group. Though both he and the State Department denied any conflict of interest, these connections certainly raise red flags. The ability of Yun to keep his client list in the shadows, as well as the SBA’s open platforming of monopolists’ services, are stark reminders of the need for much greater scrutiny of ethical conflicts that run rampant in under-reported sectors of our government. You can read Jonathan Guyer’s full piece in The Lever here.

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