Is Big Tech about to be reined in?

Karlin Lillington: US protection of privacy and data more at state than federal level

Activists are aghast at Amazon’s June announcement  it is to acquire entertainment giant MGM. 

Activists are aghast at Amazon’s June announcement it is to acquire entertainment giant MGM. 

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Will they, or won’t they? 

While a number of efforts to tame Big Tech are under way in the Unites States – and June and July have been bumper months for initial moves – it’s anyone’s guess as to whether politicians, courts and oversight bodies like US national regulator the Federal Trade Commission will use any powers granted to them. 

We seem to be at a point of potential tech regulation inflexion, however, with more actual state and national activity (as opposed to political rhetoric) than has been seen in decades. But all of these initiatives remain uncertain in scope and unpredictable in their eventual result. 

And of course, as always in US politics, there’s the question of whether a major effort, such as the roster of five congressional Bills designed to rein in the tech sector, introduced by a bipartisan group of politicians, will draw enough support to be passed into law. 

Nonetheless, summer has brought about some very intriguing moves, with a number of chess pieces placed on the board. 

On the privacy and data protection front, most of the action remains extremely slow and state-centred, leaving the US without any federal law with the scope of the EU’s General Data Protection Regulation (GDPR). 

Colorado, though, just became the third state to pass a data protection law (California and Virginia are the other two), although it won’t go into effect until mid-2023 and is considered weaker than California’s relatively robust law. 

These piecemeal additions at the state level alarm data-gathering and -using companies far more than the prospect of a federal law which would – even if it were more onerous – bring the ease of consistency across the country.

This, of course, was one of the benefits touted for the GDPR and a reason it was ultimately supported by many businesses, including tech giants, despite its regulatory impositions.

Legal tools

None of those liked the data protection restrictions much, but a single EU law  resolved the headaches of different laws/different jurisdictions within ostensibly a single market. 

A federal law has at times appeared to have wind in its sails, but many data protection experts in the US believe any such initiative is lolling in the political-will doldrums. 

And yet, some federal movement to limit the power of Big Tech is under way. Last month, a bipartisan group of legislators introduced a raft of Bills that, if passed, would hand greater data control back to users of online services while also creating sweeping legal tools to restrain business activities that are seen to violate the Bills’ fresh take on anti-trust law. 

Following Reagan-era laws that made it harder to pursue antitrust actions against big companies, little has been done to reconsider laws that might prevent market-dominating acquisitions or practices, even as fast-moving and powerful technology companies grew and grew. Only middling attention was paid, and little government opposition mounted in the US (or EU), against headline-making Big Tech acquisitions, such as Facebook’s of WhatsApp and Instagram, or Google’s of ad giant DoubleClick. 

But maybe that’s about to change. The proposed laws would enable acquisitions to be scrutinised more closely and blocked, and offer new tools for breaking up companies considered too large and dominant. Companies such as Amazon, Apple, Facebook and Google are the prime targets. 

The Bills emerged as a response to last year’s huge congressional report on tech companies. 

Anti-trust activists

Even without the proposed laws, a notable antitrust case is already in train by Epic Games against Apple and its App Store terms. Meanwhile, anti-trust activists are aghast at Amazon’s June announcement that it is to acquire entertainment giant MGM. 

On the other hand, a federal judge last month threw out two high-profile lawsuits against Facebook, one from the Federal Trade Commission and the other, from a collective of 40 states. His rejection highlights the reasons why new laws are needed – he noted the legal teams had not presented enough facts that would apply as evidence under current antitrust laws designed for a long-ago era of big train and utilities networks. 

And, in an argument that will have made long-time activists wince, he said the suits waited too long to challenge acquisitions made in 2012 and 2014. 

However, in another dramatic move, US president Joe Biden signed an executive order last week that encourages federal agencies like the Federal Trade Commission to take stronger actions against anti-competitive companies in the technology, pharmaceutical and agricultural sectors. 

“Rather than competing for consumers, they are consuming their competitors,” Biden said. 

While the US government cannot tell the independent federal agencies what to do, an executive order empowers them to act strongly from within their remits. And Biden has the strongly anti-trust legal expert Lina Khan as his new appointment to head up the sclerotic FTC. 

In between the possible enactment of new competition laws and Biden’s direct encouragement of Khan and the heads of other agencies, a very significant anti-Big Tech pincer movement could come into play. 

Could.

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