FDI and National Security: Risks FROM a Big Tech Breakup, and CFIUS’s Mitigation Role

Breaking up American “Big Tech” companies has in recent years been a topic of much discussion by policymakers and legislators across the political spectrum. Arguments for and against breakup offer various justifications and considerations, but less-discussed potential national security risks lurk within the larger debate — including that breaking up Big Tech could leave American intellectual property, data, technology, and know-how up for grabs by strategic competitors. The interagency U.S. Committee on Foreign Investment in the United States (“CFIUS”) was created to protect against this kind of national security risk, but it has its limitations, particularly in terms of resourcing and the inherent opacity of venture capital and private investment.  Given these limitations, policymakers who pursue the path of a Big Tech breakup should be aware of this risk and be prepared to address it; CFIUS and other national security authorities will need to be appropriately resourced and staffed.

By Benjamin Curley & Thomas Feddo^[1]

The call to break up American “Big Tech” is one of the few policy proposals in Washington on which individuals across the political spectrum seem to agree, albeit for different reasons. Arguments for and against breakup often touch on antitrust law as well as geopolitics, and both camps have claims worthy of consideration. There may also be unintended consequences relating to national security, however, of breaking up larg