Pressure Grows to Regulate Tech in 2021

For many if not most of us, our professions, our networks, our ways of living are increasingly dependent upon large and small technology companies and their services. For me, the many years I worked with Sun Microsystems were among the most rewarding of my career. When I ran the Boulder Economic Council, I worked closely with Google, Twitter, IBM, and dozens of tech startups to sustain Boulder’s economic vitality. All of the consulting work I do today is conducted online and virtually.

Because of the role technology plays in our lives, and because concerns are growing about the accountability of large U.S. tech companies, especially after the January 6th assault on Congress, I wanted to better understand some of the key challenges facing those companies right now.

What could growing demands for accountability mean for Facebook, Twitter, Google, Apple, Amazon, and others facing new regulation and litigation? And what could years of litigation and regulatory negotiations mean for tech consumers and employees, the nation, and even our communities?

Here’s what I’ve learned so far about some of the biggest regulatory and legal challenges facing Big Tech:

Section 230 of the 1996 Communications Decency Act

Bipartisan support for revision of Section 230’s “free speech” provisions is escalating after the attack on Congress. The law affords protections for Twitter, Facebook, and other social media companies from lawsuits over the content their users post on their platforms. It also shields platforms from liability for restricting “access to or availability of material that the provider or user considers to be... objectionable, whether or not such material is constitutionally protected.”

Tech companies have consistently argued that Section 230 protections enabled their services to prosper by letting them choose what content to restrict and how. But Democrats protest the hate speech and disinformation on social media sites, while Republicans complain the sites censor their speech by subjecting posts to fact checking.

That changed the first week of 2021. Facebook, Twitter, Apple, Google, Amazon, and others issued high profile bans of users and groups from their platforms. Many people are now asking what took the companies so long, while noting the bans demonstrate the “ample” ability companies have to act conscientiously to protect the responsible use of their platforms. After years of resisting changes to Section 230, social media companies may be facing genuine efforts to revise the law.

Antitrust

The U.S. Department of Justice filed a lawsuit against Google in October accusing the company of maintaining an illegal monopoly in online search and search advertising. The suit represents the most significant U.S. legal challenge against Big Tech since the government’s case against Microsoft in 1998. Google’s Senior VP of Public Affairs posted a blog the same month arguing that the DOJ’s case is “deeply flawed”.

The scale of the DOJ’s lawsuit presents possible consequences for Apple, Amazon, and Facebook. Apple is especially central to the DOJ filing because of its multibillion dollar deal to allow Google’s search engine as the default on iPhone and other iOS devices.

In December two additional lawsuits were filed against Google. Colorado Attorney General Phil Weiser announced that 38 state attorneys general had filed an antitrust complaint alleging that Google’s search business is an illegal monopoly that hurts consumers and advertisers. The Republican attorneys general from 10 states also sued Google, accusing it of abusing its power in online advertising.

Facebook is being sued by the Federal Trade Commission and 48 states and districts, who accuse the company of using its market dominance to crush smaller competitors. The suit could force Facebook to spinoff Instagram and WhatsApp.

The European Commission announced in November that it is opening a second investigation into Amazon’s use of independent sellers' data. The EC’s initial investigation into Amazon’s online practices began in 2019.

Data Privacy

After the European Union passed the 2018 General Data Protection Regulation (GDPR), which imposed stricter requirements on how internet user data is stored and shared, there were expectations that Congress would pass federal privacy legislation last year.

Democrats and Republicans debated the best approach to privacy regulation, but after several failed legislative attempts last year and increasing pressure from the Federal Trade Commission – not to mention Democratic control of Congress – there are some saying federal legislation should pass this year or next. In the meantime, more and more privacy battles are being waged on the state level.

Outlook for 2021 and Beyond

The pressure to increase regulation of major tech businesses is building in part because Europe and the U.K., Australia, and California and other states have already adopted more stringent regulations. But there’s considerable uncertainty about how much can be done this year given the magnitude of litigation and regulation already in play, combined with the intense challenges confronting Congress and technology businesses from the COVID-19 pandemic and recession.

Uncertainty is growing in state governments and local communities, too. Expansion of the tech industry was one of the few economic vitality success stories last year. Throughout 2020 there were announcements of major new tech offices planned in cities across the U.S. Will these plans – and future expansions – be affected by the pressures facing big technology companies? And how will work from home practices evolve and impact their expansion decisions?

The outlook for 2021 is unclear and it’s even murkier beyond that. When we look back on 2020 and 2021 ten years from now, we may well see this turn of the decade as a watershed period not just because of the pandemic and elections, but as a pivotal time for regulation of Big Tech.