Tech Policy Cheat Sheet: FT Ed Board’s 2019 Tech Predictions
Yesterday, the Financial Times editorial board pointed to four areas of increased regulatory scrutiny of leading tech services: bias, privacy, intermediary liability, and antitrust. Below are key developments to help understand each issue. Additionally, it’s critical to remember that tech continues to buck trends that plague the broader economy, fueled by competition. Investment and R&D is increasing. Wages and labor share are up. Entrepreneurship is robust. The result – the tech sector continues to drive economic growth.
Read more below.
The FT piece correctly notes that many leading tech companies are willingly adopting their own privacy standards and welcome smart privacy regulation on the national level.
A spokesperson for Google told The New York Times the company “looks forward to working with policymakers” to “define the privacy legislative frameworks of the future.” “‘There are renewed efforts to define the privacy legislative frameworks of the future, and we look forward to working with policymakers around the world to move the process forward,’ Google said in a statement.” (Cecilia Kang, “Tech Industry Pursues A Federal Privacy Law, On Its Own Terms,” The New York Times, 8/26/18)
Google CEO Sundar Pichai told Congress in December Europe’s GDPR standards provide value for companies. “In response to a later question about GDPR, Pichai said that there was ‘some value for companies to have consistent global regulation,’ and highlighted how Google published its own framework to guide data privacy legislation earlier this year.” (Jillian D’Onfro, “Google’s Sundar Pichai Was Grilled On Privacy, Data Collection, And China During Congressional Hearing,” CNBC, 12/11/18)
Facebook is working with policymakers on privacy legislation that “protects consumers, ensures people are in control of their information and promotes responsible innovation,” per a company spokesperson. “In a statement, Facebook Inc. said it is ‘working with policy makers to craft privacy legislation that protects consumers, ensures people are in control of their information and promotes responsible innovation.'” (John McKinnon And Marc Vartabedian, “Tech Firms, Embattled Over Privacy, Warm To Federal Regulation,” The Wall Street Journal, 8/6/18)
The FT editorial argues Section 230 of the Communications Decency Act is an “unfair advantage” for tech companies, but it is vital for protecting free speech and startups.
The ACLU said Section 230 is “directly responsible” for enabling the internet’s “brilliant culture of online speech.” “The Internet has evolved into a true marketplace for every idea – if you can think of it, you can find it on the web. That the online world has blossomed into this virtual town square teeming with diverse content is no accident. It is largely a creation of federal law – specifically, Section 230 of the Communications Decency Act of 1998. Section 230 is directly responsible for the free, messy, uncensored, and often brilliant culture of online speech. By prohibiting most state civil or criminal liability for something somebody else writes or posts, it created the single most important legal protection that exists for websites, bloggers, and other internet users. Under Section 230, a website can provide a platform for all speech without worrying that if one of its online users posts something stupid, critical, defamatory, or unlawful, the website itself can be held responsible.” (Gabe Rottman And Lee Rowland, “New Proposal Could Singlehandedly Cripple Free Speech Online,” ACLU, 8/1/13)
Engine, an organization advocating for tech startups, argued Section 230 is a “critical protection” for the community. “Section 230 of the Communications Decency Act is a critical protection that helped the Internet become what it is today. Efforts to narrow the law’s protections for Internet platforms, even with the best intentions, are incredibly concerning to the tech and startup communities.” (“Standing Together To Protect CDA 230,” Engine, 8/8/17)
—Engine wrote narrowing Section 230 protections would have “damaging unintended consequences.” “Narrowing CDA 230’s protections ‘will prove counterproductive to everyone’s goal of eliminating trafficking’ and ‘will have damaging unintended consequences for many internet companies that are wholly unrelated to the issue.'” (“Standing Together To Protect CDA 230,” Engine, 8/8/17)
The FT column asserts that tech companies have “monopoly power,” but the consumer welfare standard that drives antitrust policy has found time and again these companies are providing enormous value to consumers.
AAG for Antitrust Makan Delrahim points out that antitrust is not meant to punish companies that are successful. “As antitrust enforcers, we do not object if a firm comes to dominate a market purely by competition, including through superior quality or lower prices. As Judge Learned Hand wrote in his seminal Alcoa opinion in 1945: ‘The successful competitor, having been urged to compete, must not be turned upon when he wins.'” (Makan Delrahim, “‘Start Me Up’: Start-Up Nations, Innovation, And Antitrust Policy,” Department Of Justice, 10/17/18)
The Information Technology & Innovation Foundation’s Joe Kennedy argued the consumer welfare standard incorporates nonprice harms to consumers like lower quality, reduced variety, and slower innovation. “These experts argue that the consumer welfare standard, properly defined, protects all counterparties from an excess of market power. It incorporates nonprice harms to consumers, such as lower quality, reduced variety, or slower innovation. It gives regulators the power to look at the effect of monopsony power on other sellers, including on workers, and allows antitrust agencies to consider the effect of an action on innovation. They also argue that antitrust policy should remain focused on market activity and be backed by a clear economic analysis of likely effects.” (Joe Kennedy, “Why the Consumer Welfare Standard Should Remain The Bedrock Of Antitrust Policy,” Information Technology & Innovation Foundation, 10/18)
The FT piece cited some conservatives’ complaints about algorithmic bias. Not only are these claims of bias highly dubious, polling shows consumers don’t think the political views of tech employees impacts the products they provide.
Stratechery’s Ben Thompson noted that it would be “impossible” for rogue employees of a tech company to manipulate search results. “Any person that works at Google — indeed, any person that has worked in any technology company of even the slightest scale — knows that it would be impossible for a rogue employee to manipulate search results.” (Ben Thompson, “The State Of Technology At The End Of 2018,” Stratechery, 12/12/18)
—Thompson also argued that tech companies like Google have strong financial incentives to not bias search results. “Google’s business is perhaps the most perfect example of a capital-intensive tech company there has ever been. The company spends huge amounts of money on research-and-development and back-end infrastructure for the sake of offering services and advertisements that have zero marginal costs. It follows, then, that the company is heavily incentivized to serve as many users as possible; being purposely biased against approximately 50% of them would be illogical.” (Ben Thompson, “The State Of Technology At The End Of 2018,” Stratechery, 12/12/18)
Nearly 3 in 4 Americans believe the political views of employees and leadership of tech companies — and of employees at all businesses — do not impact the product or service. (“NEW POLL: Americans Believe Tech Will Have Most Positive Impact On Their Lives, Springboard Initiative, 12/3/18)