Big Tech on the Ballot

Big Tech on the Ballot
  • REGARDLESS OF WHO WINS THE ELECTION, TECH POLICY IN THE US IS GOING TO CHANGE
  • THE EU’S DIGITAL POLICY REFORMS MAY PROVIDE INSIGHT INTO AMERICA’S FUTURE APPROACH

The US and China are engaged in a war for global supremacy centred around technology, patent protection and vaccine development which define the battlegrounds of this 21st century conflict.

The digital sphere will be a key battleground in the war between the US and China. Online content moderation, data privacy and ownership are areas lacking global legal definition and therefore ripe for a leading global actor such as the US, China or the EU to set the terms of conduct that the rest of the world will have to sign up to. How big tech companies navigate the tempestuous waters will be the critical commercial issue over the coming decades.

This month, Portland examines how the Presidential election will shape tech regulation and what impact it will on tech companies.


SECURING AMERICA’S PLACE AS A GLOBAL TECH REGULATOR

Extraterritorial legal enforcement is becoming the norm in international commercial disputes, particularly those affecting technology. GDPR set the standards for data privacy regulations across the globe and is being incorporated into EU trade agreements worldwide. China’s national security law prohibits criticism of China from anywhere on planet earth including on digital platforms.

The US lacks a clear set of rules and standards and as a result is behind in the race to establish a universal system. Any rules put into place will no doubt be implemented on a global scale similar to the way the US uses the dollar’s global reserve status to enforce financial sanctions.

Whomever triumphs in November will need to create an ambitious digital standards network for the US and our allies, but the approaches – and implications – will be radically different depending on the victor.


THE AMERICAN FIREWALL

The Trump administration has been consistent in its total opposition to Chinese influence in America, and a second term will undoubtedly see that continue. This applies to technology as much as it does trade policies. The administration has unabashedly moved to ban TikTok and WeChat, attributed to the platforms’ censorship of anti-China content and concerns that the Chinese government is using the technology to spy on American citizens. Another Chinese company in the crosshairs is Tencent, one of the world’s leading developers of video games that could see restrictions on its apps in US markets.

This bifurcation of the internet mirrors China’s own approach which has banned US social media apps including Facebook, YouTube, Instagram and Twitter.

Trump is accidentally creating a great US firewall akin to China’s in method but American in structure, an approach that will cement the creation of two internets: One Western, one Chinese.

The Trump administration is attempting to export its approach toward China to tech regulation around the world. The battles over the inclusion of Huawei in 5G networks are part of the same strategy of total exclusion of Chinese technology from the Western digital sphere.

The Trump administration’s proposed Clean Network is directed squarely out countering Chinese influence. The plan calls for removing not only Chinese apps from US stores but also restricting cloud computing access provided by Chinese companies like Alibaba and Baidu. These restrictions have support across the Atlantic from Digital and Internal Market Commissioner Thierry Breton who has called for European digital sovereignty in line with the EU’s moves to protect citizens’ data and put pressure on companies to store EU data in Europe.

The Clean Network builds off proposals agreed upon with other countries including the UK, France, Japan and Australia, but it’s a long road to establishment, acceptance and enforcement.


The Trump administration is focused on repelling China in every sphere of competition, and Republicans on Capitol Hill are concerned more about alleged censorship of conservative voices by social media companies than they are about privacy controls. With four more years in the White House, the Trump administration is unlikely to take a hard line about tackling online hate speech but will instead attempt to censure companies seen to be muffling conservative voices. Twitter, which has taken to fact-checking the president’s feed, could be one potential victim of a second Trump term.

In lieu of a new agenda for 2020, the Republican convention simply reaffirmed the 2016 manifesto for the president’s campaign. We can expect the Trump administration to continue to pursue wide ranging antitrust probes of the largest technology companies but it’s unclear what this would result in.

While President Trump’s inconsistent approach still presents risks for tech companies, these political platforms are unlikely to lend to sweeping regulation and novel standards. A grander tech strategy is more likely to emerge from a Democratic president.

POWER TO THE PEOPLE – EU STYLE

When it comes to tech policy and tech companies, Democratic presidential nominee Joe Biden and Congressional Democrats would take a more citizen-centric approach, looking at routes to increase privacy and data protection, content moderation and battling disinformation on online platforms. The pandemic and the economic recovery have side-lined tech issues from the public discussion, but the approach taken by the European Union to reform its digital policy framework through the Digital Services Act (DSA) Package could provide insight into the Biden Administration’s approach:

Liability and content moderation

In both the US and the EU, online platforms are not liable for the content users post on them – this is one of the founding principles of the US’ Section 230 of the Communications Decency Act and the EU’s E-Commerce Directive, both adopted more than 20 years ago. This includes disseminating false information, hate speech and other sorts of politically biased messages, without any control. However, there is a general feeling on both sides that the rules governing the internet are outdated.


The online world has changed, with platforms playing a more central role for businesses and citizens alike. In the EU, policymakers have by and large acknowledged that the liability exemption will remain but the prevalence of misinformation surrounding the US election, vaccination and the QAnon conspiracy theory could prompt the revocation of the Section 230 liability exemption. Biden urged for the exemption enshrined in Section 230 to be “immediately revoked” in an interview with The New York Times in January 2020, to prevent certain social media companies from “propagating falsehoods they know to be false”. Concretely, this would give an editorial role to platforms and completely revolutionize the way they operate, an option that the EU has already rejected. Content moderation regulation does not seem to be on top of Biden’s agenda, but any rule change will hinge on whether Democrats gain a majority in the Senate.

Supervisory Changes

EU policymakers are currently looking at two approaches that bridge the competition and tech policy nexus: (i) set of general rules for all platforms (self-preferencing) and (ii) targeted rules for specific platforms (non-personal data access obligations, interoperability requirements). Digital and Internal Market Commissioner Thierry Breton recently suggested, “We need better supervision for these big platforms, as we had again in the banking system [after the financial crisis].” Europeans call for rebalancing the scales: “Rules to stop platforms misusing their position as both player and referee – both owning a platform and competing with others that rely on that very same platform,” wrote Margarethe Vestager, the EU’s competition and digital czar.


A Biden Administration might feel inspired to follow the European approach. The Biden team see regulation as the right approach for two main reasons: it is a good way to curb Big Tech’s power without breaking them up; and the US could potentially export those regulatory standards to the rest of the world, “not unlike the Europeans are doing relative to privacy”, said Biden to The New York Times. Here, Biden will face some stiff competition from the Europeans who are ahead in their thinking and decision-making. It’s also Europe’s endgame to export its thinking on tech policy and Big Tech to the rest of the world, much as they did with the General Data Protection Regulation (GDPR). Some advisers close to the Biden campaign have even suggested creating a Digital Platform Agency to create new rules and regulate big tech. This ambitious proposal would face the same obstacles that the Consumer Financial Protection Bureau did, hobbling its ability to set a global framework and enforce it.

THE NEW WORLD ORDER

2016 was a nexus point for digital policy. The scandals involving election interference and the use of personal data vaulted tech regulation to the top of policy agendas. However, in the four years hence, the Trump administration has largely refrained from pursuing an ambitious tech regulation framework choosing instead to focus on curtailing Chinese influence and eliminating its hardware from telecommunications networks. This will continue in a second Trump term accelerating the digital decoupling of China and the West.

Under Biden, the US may attempt to create a comprehensive digital framework that bears similarities to the European system. However, Europe doesn’t have any global tech titans; Biden’s approach would therefore have a distinct American flavor that preserves US digital dominance while creating a set of rules for platforms to adhere to.
Regardless of the approach taken, America’s court system will be called in to decide whether the government has the power to enact its planned legislation and the EU may continue to persist in its own path. Having three distinct digital environments would create a host of obstacles for technology companies but even if the US and EU harmonized their standards, China would remain apart. The new digital world order will be defined by the schism between China and the West; straddling the two worlds will become increasingly difficult, companies will be forced to pick a side in the US-China tech war.

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