Big Tech is running scared.
After a decade of tech companies’ mind-blowing growth, the public love affair with Big Tech is turning sour, and for good reason.
Now an epoch fight is developing. The tech companies that long eschewed Washington are spending gobs of money inside the Beltway to protect themselves from real accountability. But as Big Tech’s popularity sinks, lawmakers from both parties increasingly are willing to challenge their power. And an emerging coalition of consumer, privacy, civil rights and other advocates are demanding meaningful restraints on Big Tech abuses.
The internet, e-commerce and the giant tech platforms — Google, Facebook and Amazon — have grown to a vast scale with a minimum of governmental regulation. Although the internet and these and other giant corporations have unarguably enriched the lives of Americans and people around the world, the unregulated, commercialized internet has become rife with abuse.
Data breaches, privacy violations, misleading and deceptive advertising, manipulation of children, predatory marketing to vulnerable communities, discriminatory pricing, anti-competitive conduct, and more are troublingly commonplace.
Consider just a few examples:
—Facebook just admitted it “unintentionally” and without permission uploaded 1.5 million email contacts to its site.
—The European Union in March slapped Google with a $1.7 billion fine for blocking customers from using rival search engines. The EU has hit the company with more than $9 billion in antitrust fines in recent years.
—Recently revealed court documents show that Facebook knowingly duped game-playing kids out of money, tricking kids into spending money when they didn’t know they were (and their parents certainly didn’t). Internally, Facebook called this “friendly fraud.”
—Italian competition authorities just announced an investigation of Amazon for possibly illegally advantaging vendors who used Amazon’s logistics services over those who did not.
Against this backdrop, at first blush it is quite surprising that the tech platforms that dominate the internet and have long bragged that their success was enabled by a laissez-faire regulatory environment, now are affirmatively and aggressively seeking federal privacy regulation.
The mystery behind this seemingly unlikely request for regulation quickly dissolves, however; the tech companies want federal regulation because they are intent on overriding state regulation. Their hope is for federal rules that would override (“preempt”) state efforts like California’s new privacy bill, which is set to take effect in 2020. “The California bill is responsible for 90 percent of the lobbying and political pressure to pass a national law,” Robert Atkinson of the Information Technology and Innovation Foundation, whose board includes tech executives, told AP.
With Google, Facebook and the rest in support, there’s a real chance Congress will pass privacy legislation this year or next — but there’s absolutely no guarantee that such legislation will leave consumers better off. Google’s parent company, Alphabet, is now the biggest corporate lobby in Washington, D.C.
The tech companies and other large players on the internet couch their advocacy for preemption on the grounds that they want to avoid a “patchwork” of overlapping and even conflicting state requirements. But there is no evidence of such conflicting standards, and companies can typically satisfy differing state standards by adhering to the strongest ones. (If they choose, they also can maintain differing standards for different states, typically a technically simple matter.)
The real reason that tech and other companies so strongly favor preemption has nothing to do with “patchwork” concerns. Instead, they are worried about state requirements that afford consumers more protection than federal rules and experiment with innovative approaches. States can also adapt more quickly to changing circumstances than can federal rules. The tech goliaths are more confident that they can capture federal regulators than state regulators. Big Tech and other companies also are especially keen to limit their liability to consumers and hope to preempt state private rights of action for various kinds of misconduct.
Like the Big Tech companies, consumer advocates also are calling for federal regulation, but with several crucial differences.
First, they are urging much more aggressive restraints on Big Tech’s business practices, including prohibitions on targeting ads to consumers based on tracking their browsers (“behavioral advertising”).
Second, they insist that federal rules must extend beyond a narrow conception of privacy, particularly to thwart new forms of racial and other discrimination by algorithms that replicate and exacerbate society’s racial and power differentials.
Third, along with privacy protections and limits on abusive conduct, they are calling for aggressive anti-monopoly remedies, including breaking up the big companies.
Last, consumer advocates reject the idea that federal regulations should immunize Big Tech from tougher state standards and liability under state law. The point is to protect consumers, not our tech overlords.