For more than a decade, lawmakers and regulators have taken a hands-off approach to Silicon Valley. But that’s all likely to change for Big Tech companies like Amazon, Apple, Google, Facebook and Twitter as the folks in charge in Washington look to rein in their power and influence.
Politicians and policymakers on both sides of the aisle have grown increasingly alarmed by the power these companies wield — how it might harm consumers by enabling the firms to choke off competition from smaller players, exploit personal data for profit, and distort what media is shared and consumed online.
Some on Capitol Hill are calling for a full-scale reset. In October, the House Judiciary Committee published a scathing, 449-page report that concluded Amazon, Apple, Facebook and Google have transformed into monopoly powerhouses.
“Companies that were once scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons,” the report reads.
Many Democrats in Congress support legislation to break up tech monopolies. And over the past two months, Google and Facebook have been hit with lawsuits from dozens of states all over the country. Meanwhile, President Donald Trump’s Department of Justice is going after Google, and a Republican-led Federal Trade Commission has filed suit against Facebook.
As President-elect Joe Biden prepares to take office in January and a new Congress gets to work, the days of unchecked power for Big Tech look like they’re numbered.
“Everyone agrees there is a serious problem that needs to be addressed,” Rep. David Cicilline, Democrat of Rhode Island and the chairman of the House antitrust subcommittee (which wrote the October report), said during a New York Times panel discussion earlier this month. The “era of self-regulation is over, and congressional action is required,” he said.
Here’s a look at the three big issues facing Big Tech in the coming year.
The antitrust target on the backs of some of the biggest tech companies in the world is growing larger. Google and Facebook are already facing multiple lawsuits from federal and state law enforcement as well as regulatory agencies.
And things are likely to get worse. Here’s a quick rundown:
In October, the Department of Justice filed a lawsuit alleging that Google has used anticompetitive tactics to preserve its search engine business. On Dec. 17, 38 states filed an antitrust suit against the company, accusing it of running an illegal digital advertising monopoly and enlisting Facebook to rig ad auctions. These states also allege that Google manipulated digital advertising markets in violation of antitrust laws. And another group of state attorneys general, led by Colorado’s, is also expected to file an antitrust case against Google.
The social media giant is facing a lawsuit from the FTC and a coalition of more than 40 states and territories. The suit accuses the company of illegally stifling innovation and choking competition by buying and squashing smaller startups. The suit demands that Facebook unwind its acquisitions of WhatsApp and Instagram.
Apple and Amazon
So far neither Apple nor Amazon is being sued by the US government or the states, but the House Judiciary report also singled them out for their behaviors. The report accuses Amazon of holding monopoly power over third-party sellers on its site. And it accuses Apple of having a monopoly through its App Store.
While the lawsuits get litigated, there’s growing appetite among lawmakers in both parties to take legislative action on antitrust that could go far beyond the tech industry and affect all concentrated industries.
“It’s not just the big tech companies that will be affected by these reforms,” said Gigi Sohn, who served as an adviser to former Federal Communications Commission Chairman Tom Wheeler and is a distinguished fellow at the Georgetown Law Institute for Technology Law & Policy. “It would also have big implications for other industries where there’s concentrated power, like pharmaceuticals and airlines.”
Sohn added that the centrality of the internet in our economy “has left gaping holes in our laws” and that it’s up to Congress to fill those holes. How far the reforms could go will largely depend on who’s in Congress and whether Democrats and Republicans can resolve their differences on these issues.
Some key areas where Democrats and Republicans may agree include more funding for antitrust enforcers, such as the FTC, and changing the burden of proof for proposed mergers so that companies whose market share passes a certain threshold are assumed to be monopolies and must prove their deal doesn’t do harm. Other areas where agreement may be found is in data portability requirements for platforms, which allow consumers to move their information with them when they go to competing services and which institute prohibitions on platform bias, or the preference platforms give themselves when displaying their own listings above those of a competitor.
These were all ideas that came out of the House Judiciary subcommittee report.
Section 230 and free speech online
Calls for changes to Section 230 of the 1996 Communications Decency Act got louder in 2020. Democrats and Republicans on Capitol Hill agree changes are needed to the law, which shields large social media companies like Facebook and Twitter from lawsuits over the content their users post on their platforms.
But their views differ greatly when it comes to exactly what they see as the law’s problems.
Democrats are troubled by the rampant flow of hate speech and disinformation on social media, including interference by foreign countries in the 2020 US presidential election. Biden has called for the law to be revoked.
Republicans, led by Trump, allege that their speech is being censored by social media sites. Earlier this year, Trump issued an executive order to get the FCC to examine how the agency could ensure that social media companies aren’t censoring content on their sites. To bring more attention to the issue, because it didn’t include a repeal of the protections.
Meanwhile, tech companies say Section 230 protections have been the key to allowing their services to flourish. The liability shield has let them choose what content they restrict and how.
After years of resisting any changes to Section 230, some companies, like Facebook and Twitter, say they’re open to tweaks to the law. At a Senate Commerce Committee hearing in October, Facebook CEO Mark Zuckerberg acknowledged that social media platforms “have responsibilities, and it may make sense for there to be liability for some of the content that is on the platform.”
At the same hearing, Twitter CEO Jack Dorsey suggested regulations that would require companies to make their moderation processes more transparent. He also said companies could develop clear ways for users to appeal their decisions on content moderation and give users more choices in how algorithms sort their content.
Still, he cautioned lawmakers not to go too far in their reforms. And he warned that a heavy-handed approach could especially stifle smaller startups.
“What we’re most concerned with is making sure that we continue to enable new companies to contribute to the internet and to contribute to conversation,” Dorsey said.
Who owns your personal data, and how should companies be protecting the information they gather about you? That’s the big question that many people hope Congress will answer in 2021.
The year 2020 was supposed to be the one in which Congress passed federal privacy legislation. There’d been much talk in Washington about comprehensive privacy legislation following the European Union’s 2018 General Data Protection Regulation or GDPR, which significantly increased requirements for how consumer data is stored and shared. As the feds dragged their feet and debated what the US should do, California followed the GDPR with its own Consumer Privacy Act, the CCPA, which went into effect on Jan. 1, 2020. Other states have taken similar steps. Though some advocates would say the CCPA doesn’t go far enough, it’s still the most comprehensive privacy law in the US. And it could serve as the foundation for federal protections.
But in spite of more than 20 privacy bills or drafts of bills being introduced and discussed in Congress, there’s still no law in place.
Experts agree that a piecemeal approach by states isn’t enough to adequately address consumer privacy. And they agree it could create costly and complicated compliance requirements for individual companies. Sohn said there’s already alignment on many privacy issues, so she’s hopeful something can be hammered out in 2021.
In December, there were signs that Democrats and Republicans on the Senate Commerce Committee had begun to find common ground for legislation. Earlier this month the committee held a hearing that featured testimony from a bipartisan group of former FTC commissioners, including three former chairs. Key differences remain among Democrats and Republicans on proposed legislation, but it seems a federal privacy law will likely be a top agenda item for the next Congress.
The FTC is also exerting some pressure on companies, asking several, including Amazon, Facebook, Google, Twitter and ByteDance, the owner of TikTok, for information about how they collect and use the personal information of their users. The FTC also wants to know how these companies sell that information to advertisers, and how the practices affect children and teens.
“These digital products may have launched with the simple goal of connecting people or fostering creativity,” FTC commissioners Rohit Chopra, Rebecca Kelly Slaughter and Christine Wilson wrote in a statement supporting the requests. “But, in the decades since, the industry model has shifted from supporting users’ activities to monetizing them.”
The statement continues: “Never before has there been an industry capable of surveilling and monetizing so much of our personal lives. Social media and video streaming companies now follow users everywhere through apps on their always-present mobile devices. This constant access allows these firms to monitor where users go, the people with whom they interact, and what they are doing.”
What these companies do with the data, the commissioners said, “remains dangerously opaque.”