Once rare, it’s now common to see the CEOs of the world’s leading tech companies facing querulous members of the US Congress. Tech’s problems — content moderation, data collection, and anticompetitive practices among the many — have become society’s problems. The past few years have witnessed a mounting regulatory backlash, and 2021 is poised to be the year tech policy takes center stage among US legislators and in the White House.
Everyone in business should be paying attention to this debate. In a world driven by the internet, regulations in one country or state can ripple across the globe, impacting the way companies interact with customers and partner with other businesses.
Below are six US policy topics that will impact business planning this year.
Section 230. Initially passed in 1996, Section 230 permits internet companies to host user-generated content while freeing them from the legal liabilities that traditional publishers face. The law also allows those platforms to moderate that content, within certain constraints.But many feel Section 230 has outlived its usefulness and that it gives large tech companies unfair advantage.
At the center of the debate is who should be responsible for curbing toxic content like disinformation, incitement to violence, and hate speech. Bipartisan momentum for reform of Section 230 has been building for years, but 2021 is widely expected to be the year when something happens. Still, comprehensive reform appears unlikely so long as Republicans and Democrats remain bitterly divided about why the law needs changing. For a nuanced view of this debate, don’t miss our conversation with tech policy expert Mike Masnick HERE LINK
Antitrust. Calls for the break-up of Big Tech echo earlier eras of antitrust legislation in the US, with the focus now on Facebook, Apple, Google and Amazon. At stake are new principles of antitrust law that could impact all companies, in particular global leaders with significant market share in a given region.
Within the US, numerous lawsuits have already been filed in Congress and in federal and state judiciaries against the Big Four tech companies. The Justice Department has opened an antitrust case against Google alleging anti-competitive practices around its search engine business, while the Federal Trade Commission has demanded that Facebook unwind its acquisitions of WhatsApp and Instagram. Both companies also face antitrust suits at the state level. All four face increasing scrutiny in Congress, which published a major report in the fall outlining steps to rein in the tech giants, such as narrowing the scope of their business, raising the bar for mergers, and setting up an antitrust regulating body. While it’s entirely possible the new Biden administration will modify or even abandon its predecessor’s current actions, it’s unlikely the antitrust issue will recede entirely.
Digital privacy. As governments across the world rapidly implement new data privacy laws, global brands are now confronting steep barriers to cross-border trade. The new regulatory environment is forcing businesses to re-think how much data they collect on their customers, where they store it, how they protect it, and how they transport it [LINK to data localization piece].
Some 130 countries have now implemented comprehensive data protection laws, but the US remains a laggard, with no federal data privacy law. Instead, California has led the way with the California Consumer Privacy Act (similar to the EU’s General Data Protection Regulation) and other states may follow. But with increasing focus on consumer data privacy, the federal government may finally be moved to act. New regulation could place a substantial burden on US businesses, including stricter breach notification requirements and associated penalties; restrictions on the collection, retention and sale of personal data; and stiff compliance costs stemming from new consumer privacy rights, such as the right to review and delete the personal data that companies hold.
AI Regulation. The pandemic has increased the prevalence of AI and automation, but calls for regulation have yet to reach fever pitch in the US. Nevertheless, targeted regulatory measures, such as prohibitions on the use of AI in facial recognition technology, have appeared in state and local privacy laws, as in Portland and California, and in some consumer protection bills pending in Congress. There is also some movement outside Congress: last year, the Office of Management and Budget issued guidance to federal agencies on how to regulate AI use in the private sector and kickstarted a six-month review to conduct a similar investigation for AI use in the government. If the recently proposed European Digital Services Act is any guide, AI regulation could ultimately force some costly changes on businesses, such as opening up algorithms for review by independent auditors and requiring that businesses inform customers how certain AI decisions are made and if they are done so without human mediation.
5G. Unlike past cellular technology standards, 5G technology will power not just cell phones, but an expanding network of connected—and critical—devices, including industrial machinery, transmission lines, and autonomous vehicles. In addition to boosting economic growth, 5G technology therefore invites significant risks—a concern that has been magnified by an expanding geopolitical conflict with China, a world leader in the telecommunications supply chain.
The Trump Administration published a national strategy for secure 5G development in March, and it targeted 5G provider Huawei throughout its tenure, restricting its ability to do business in the US. The previous administration also moved to bar Chinese suppliers from the telecommunications backbone. Though the Biden Administration has yet to establish a clear policy for 5G security, Democrats in Congress appear united around the imperative of expanding 5G access and shrinking the digital divide, as signaled by the still-pending Accessible, Affordable Internet for All Act outlined in the 2019-2020 Congress. Whatever position the Biden Administration ultimately takes, its 5G policies will have major implications for businesses: excluding Chinese suppliers from the telecommunications backbone could significantly slow the rollout of 5G in the US and in allied countries, while failing to do so could leave critical gaps in the security, trust and interoperability of US, European and Chinese 5G networks.
Net Neutrality. Net neutrality embodies the principle that internet service providers should treat all data that transits their network equally as opposed to offering differentiated service bundles based on a customer’s willingness to pay. At stake is the preservation of a level playing field for businesses and the availability of cheap and efficient internet service for upstarts and innovators.
Republicans and Democrats are divided about the importance of net neutrality. As a result, the government’s policies have careened back and forth as the White House has changed hands: In 2018, only three years after the Obama-era Federal Communications Commission ruled in favor of net neutrality, the Trump-era FCC reversed that decision. The Biden Administration has since appointed an acting FCC chairwoman who supports net neutrality, making a return to data non-discrimination likely.
