In a hotly worded Wall Street Journal op-ed, President Joe Biden lays out what he hopes will become a bipartisan plan for shackling the American information technology sector with many layers of new regulatory requirements. The White House essentially wants America to become more like Europe on tech policy, with comprehensive, top-down, highly repressive controls on the information sector and digital entrepreneurs. They want us to follow—not lead, innovate and break new ground.
This would represent a catastrophic technology policy paradigm for the United States, and it would stymie digital innovation for years to come. This step backward would be particularly destructive because it comes at a time when America is looking to ensure that our companies and workers are able to square off with China in various important data sectors, like artificial intelligence (AI) and machine learning.
The Blame Game
In his opinion piece, Biden blames digital media for every societal problem and calls on both Republicans and Democrats to join him in his regulatory crusade against the entire sector. Virtually every anti-tech cliché and accusation imaginable appears in Biden’s editorial: Extremism! Polarization! Exploitation! Discrimination! Kids! The missive reads like a veritable greatest hits of techno-panics.
Why would Republicans join Biden’s pro-regulatory cause? Because hating on “Big Tech” has become all the rage in conservative circles over the past few years. In fact, Biden is borrowing much of the same rhetoric that former President Donald Trump and Missouri Republican Sen. Josh Hawley have been using for years to describe their contempt for America’s digital technology sector—which distracts from real barriers to competition we should be addressing and undermines our focus on stopping actors abroad from using digital platforms to spread disinformation.
In a 2019 USA Today op-ed, Hawley insisted that “social media wastes our time and resources,” and is “a field of little productive value.” He referred to tech platforms as “parasites” and blamed them for a litany of social problems, even suggesting at one point that, “we’d be better off if Facebook disappeared.” Hawley followed that up with a tech-bashing book on The Tyranny of Big Tech, and several other conservative policymakers and pundits have joined his cause.
For their part, Democrats have been just as aggressive with extreme rhetoric and recommendations for digital tech companies, although for slightly different reasons than Republicans, who feel there’s just a general anti-conservative bias in tech firms. Republicans want companies to pay some sort of price for perceived bias against their political views or leaders. Democrats want social media companies to police hate speech, discrimination and misinformation—however, all those things get defined by bureaucrats and the courts. At the end of the day, the paths both parties recommend are paved with endless layers of red tape and litigation.
The Attack on Advertising and Data Collection
What does Biden’s proposed bipartisan plan for taking down digital tech look like? First, Biden calls for sweeping limitations on data collection and limits on targeted advertising. Again, that is right out of the European Union (EU) playbook. It is always easy to bash advertising, but it has been a crucial component of the system that gave Americans the remarkable cornucopia of online options that we enjoy today. R Street has helped lead the charge to find agreement on smart, comprehensive data privacy and security legislation, working with broad coalitions to do so. But the Biden administration risks undermining work by legislators and outside groups purely for political points, getting in the way of what is achievable.
Biden begins his op-ed by noting how “The American tech industry is the most innovative in the world. I’m proud of what it has accomplished…” Indeed, over the past two decades, America’s digital sector became “a growth powerhouse,” that, “has driven remarkable gains, powering real economic growth and employment,” a recent Brookings study concluded. But this did not happen by sheer luck; online advertising and data collection helped sites and platforms of all sizes grow rapidly and offer a broad array of services to the public at little to no charge.
The EU, however, has imposed mountains of restrictions on online advertising and data collection efforts only to be left with a continent devoid of any notable players in the information technology sector. Europe’s leading digital technology export today is innovation-crushing regulation, which the EU hopes to impose on the entire planet—but most especially on American tech giants. A recent academic journal symposium surveyed top innovation scholars and asked them about Europe’s future tech prospects. One contributor aptly noted that “the future will not be invented in Europe,” and the consensus view of all the experts was captured in the symposium’s grim title: “The Biggest Loser.” We can’t let that happen to America by shackling data innovators with reams of bureaucratic paperwork, as Biden calls for.
Bring in the Bureaucrats … and Trial Lawyers
Unfortunately, Biden’s anti-tech plans do not stop here. Like many Republicans today, he wants to gut Section 230, the provision of the Telecommunications Act of 1996 that generally immunizes online platforms from liability for the content posted by others on their networks, thus allowing online speech and commerce to flow freely. Section 230 is probably responsible for more economic growth than any provision of law Congress has enacted over the past half-century because it helped countless start-ups, attracting global venture capital and talent. But Section 230 is now in the cross-hairs of both parties, who want to open the floodgates of litigation.
Biden also wants the government to play the role of code cops by regulating algorithms for a variety of purposes. His administration already created waves last year with its controversial Disinformation Governance Board that would have policed misinformation by creating another bureaucracy in the Department of Homeland Security. Now, in the name of “fighting algorithmic discrimination,” he and many Democratic allies in Congress and the states are proposing many new laws and regulations to regulate fast-moving algorithms at every juncture. It is a recipe for technological stagnation, and it mimics a misguided regulatory proposal currently moving forward in the EU. As with proposals to gut Section 230, “algorithmic fairness” regulations would lead to waves of frivolous lawsuits by over-zealous trial lawyers seeking a quick payday.
The Antitrust Wrecking Ball
But Biden’s still not done proposing new tech mandates. He also wants the federal government to swing the wrecking ball of massive antitrust regulation more aggressively and intentionally hobble some of America’s leading global tech champions—much like the EU. His administration has already been remarkably aggressive on this front—especially with the Federal Trade Commission (FTC) under Chairwoman Lina M. Khan. Meanwhile, much of the last session of Congress was dominated by members of both parties, led by Sen. Amy Klobuchar (D-Minn.), floating ambitious plans to use antitrust and other types of regulation to kneecap various companies.
Will any of these regulatory efforts advance? That remains unclear considering how dysfunctional Congress has been. Even with both parties treating tech companies like a political piñata in hearings and speeches, it will be hard to get legislation over the finish line. What the administration will most likely do, as Biden’s editorial suggests, is push for comprehensive privacy legislation and look to turn it into a regulatory Christmas tree with a present for everyone underneath.
This is unfortunate because a streamlined federal privacy bill could actually do some good by preempting the patchwork of state laws that are proliferating and that threaten the vitality of the digital marketplace. Unfortunately, the temptation for loading up a popular measure with additional mandates already happened with last year’s leading federal privacy proposal, the “American Data Protection and Privacy Act of 2022.” The measure came to include unnecessary provisions requiring that data handlers perform an annual algorithm impact assessment and file them with the FTC. This mandate would include a “detailed description” of both “the design process and methodologies of the covered algorithm,” as well as “steps the large data holder has taken or will take to mitigate potential harms from the covered algorithm.”
The inclusion of such language could open the door to remarkably broad theories of harm and invite comprehensive federal meddling with AI technologies, threatening innovation across the digital economy. Again, this proposal mimics regulations already floated in the EU. Privacy legislation should be kept clean of these and other such mandates, especially because they could actually undermine security in other ways by opening algorithms up to potentially hostile actors and forcing developers to reveal sensitive trade secrets or other information. More practically, each new regulation added to the baseline privacy bill lessens its chance of successful implementation.
The End of Permissionless Innovation?
If these bureaucratic regulations take hold, it would drive a stake through the heart of the permissionless innovation model that has driven America’s world-leading success in the information marketplace. It would result in the hyper-politicization of information markets and the tech economy.
It is remarkable to think that after years of everyone complaining about the lack of bipartisanship in Washington, we might get the one type of bipartisanship America absolutely does not need: the single most destructive technological suicide in U.S. history, with mandates being substituted for markets, and permission slips for entrepreneurial freedom. It is even more remarkable to think that some Republicans might be swayed by President Biden into supporting the effort.
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