What Do Last Week’s Midterms Mean for the Tech Sector?
Last week’s midterm elections may loom large for technology policy. Since the Democratic Party achieved a majority in the United States House of Representatives, they may hold hearings and propose legislation that threatens U.S. dominance in the technology sector. Given statements in the past, here are a few things to look forward to, or to apprehend.
- Hearings looking into big tech or proposed regulations of the industry. It is no secret that the Democrats have wanted to target big tech for a while. Senator Warner drafted a white paper that included twenty different ways to regulate technology. Since 2016, Democrats blamed Hillary Clinton’s loss on platforms’ spread of “fake news” and inability to detect foreign involvement.
- More talk of antitrust regulation. Senator Warren has called, on multiple occasions, for the break up of big tech companies, such as Amazon and Google. The government uses antitrust powers granted to the Federal Trade Commission (FTC) and the Department of Justice to do this. Leftists, generally, hate anything that is “too big.” Tech platforms, such as Google and Facebook, dwarf traditional telecommunications companies. Many tech platforms also have divisions, for lack of better term, with Facebook also owning Instagram and WhatsApp, while Google has irons in many fires, such as advertising, driverless cars, artificial intelligence, and so on. Antitrust activists are also vocal on the right, with similar claims— that the tech platforms harm consumers by monopolizing the ecosystem, and notably access to speech online.
- More proposed restrictions on free speech. Since the 2016 election, Democrats and some Republicans have been calling for more restrictions on online speech. In the past session, Democrats introduced, for example, the Honest Ads Act. The Act supposedly seeks to address the problem of foreign money corrupting U.S. elections. The problem is that the Act places more restrictions on domestic speech, and specifically online political advertising, than it regulates foreign money spent for the purpose of influencing elections.
- Privacy legislation. Democrats in California passed a privacy bill in late 2018 that rivaled Europe’s General Data Privacy Regulation (GDPR). That privacy bill will have significant impacts on California’s economy, and perhaps the economy of the country, in general. Look for them to introduce legislation that will preempt state laws, but place burdensome, GDPR-type regulations on tech platforms. As some outlets are predicting, Republicans may concede some points, but try to fight others. Republicans, for example, may be willing to provide the Federal Trade Commission.
- Net Neutrality legislation. At a Cyber event hosted by the Washington Post, California Representative Ro Khanna promised that the House would look at restoring Obama-era Title II regulations on the internet. He claimed that the rules would keep the internet open and free while helping close the digital divide. For those not paying attention, since the repeal of the Title II reclassification, infrastructure investment has increased $1.5 billion between 2016 and 2017.
These are all bad ideas. The technology sector is huge. It adds trillions of dollars to the American economy and employees hundreds of thousands of people. Many 401k’s, IRAs, and other retirement accounts have invested heavily in the tech sector. Subjecting the sector to heavy-handed government regulations will only dissuade companies from investing in the U.S. economy and will serve as a warning to innovators: “Become too big, according to the government, and we will start regulating you.”
While Democratic control of the House may loom large for the tech sector, some Republicans appear to just need cover to support big government regulations. If the House, under new leadership, decides to support the regulation of the tech sector, free-market advocates will have their work cut out for them over the next two years.