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Senate Judiciary Committee Hears Decreasing Innovation in Market a Result of Big Tech Influence

Committed discussed big companies shutting smaller ones out of the marketplace.

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Senator Amy Klobuchar, D-Minnesota

WASHINGTON, December 20, 2021 – In a Senate Judiciary Committee hearing on Wednesday, senators expressed concern that barriers being erected by big technology companies are reducing the pace of innovation in the technology market.

Lawmakers are concerned that smaller technology companies are being shut out of those markets either because of a lack of technology interoperability with the big companies or they are being charged for having their apps on the Apple or Google app stores.

Sen. Richard Blumenthal, D-Connecticut, argued Wednesday that fees charged by Apple and Google for app developers to sell in each company’s app store stifles innovation and raises consumer costs. With the ubiquity of Apple and Google’s app stores, developers who do not want to pay out these fees have almost no options for other places to sell their app products.

Blumenthal, Sen. Amy Klobuchar, D-Minnesota, and Sen. Marsha Blackburn, R-Tennessee, have introduced the Open App Markets Act in August to promote competition in the app stores by barring their operators from requiring app providers to use app stores’ in-app payment systems. That came after a fight in which Epic Games took Apple to court for removing it from the store because it bypassed the store operator’s fee system.

Diana Moss, president of the American Antitrust Institute, said during Wednesday’s hearing that the problem of fear and intimidation is growing in markets at an alarming rate and that this has a direct adverse effect on innovation.

Current enforcement agencies don’t have power right now

Klobuchar remarked that the current laws do not actually allow antitrust enforcement agencies to police markets, and that laws must be changed to allow proper regulation.

Calls to increase financial resources for these agencies are currently widespread among antitrust experts.

Several Republican senators used their time during the hearing to comment on how central conservative values are being repressed by the current market landscape.

Sen. Mike Lee, R-Utah, emphasized proper enforcement of antitrust regulations because with such enforcement comes less need for what he called “regulatory intrusions” elsewhere by financial regulators.

Republicans took time to comment on what they consider to be censorship of conservative voices by large and powerful tech corporations, with Lee, Sen. Chuck Grassley, R-Iowa, and Sen. Ted Cruz, R-Texas, all making similar statements.

Lee and Cruz both brought up conservative social media platform Parler’s removal from prominent app stores following the January 6 insurrection at the U.S. Capitol, with Cruz speaking to witness Roger Alford, a professor at Notre Dame Law School, on the legality of the matter.

Following its removal from Amazon’s servers, Parler launched an antitrust suit at the online marketplace.

To close the hearing, Klobuchar stated that without changes in the practices of large tech companies, the Senate will “have no choice but to make major changes to Section 230,” a legal provision that shields technology companies from legal trouble stemming from what their users post on their platforms.

Free Speech

Former GOP Congressman and UK MP Highlight Dangers of Disinformation and Urge Regulation

Will Hurd and Member of Parliament Damien Collins say disinformation on social media platforms a worry in midterm elections.

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Photo of Will Hurd from March 2016 by Paul Morigi used with permission

WASHINGTON, January 11, 2022 – Former Republican Rep. Will Hurd said that disinformation campaigns could have a very concerning effect on the upcoming midterm elections.

He and the United Kingdom’s Member of Parliament Damien Collins  urged new measures to hold tech and social media companies accountable for disinformation.

Hurd particularly expressed concern about how disinformation sows doubts about the legitimacy of the elections and effective treatments to the COVID-19 virus. The consequences of being misinformed on these topics is quite significant, he and Collins said Tuesday during a webinar hosted by the Washington Post.

The Texan Hurd said that the American 2020 election was the most secure the nation has ever had, and yet disinformation around it led to the insurrection at the Capitol.

The British Collins agreed that democratic elections are particularly at risk. Some increased risk comes from ever-present disinformation around COVID and its effects on public health and politics. “A lack of regulation online has left too many people vulnerable to abuse, fraud, violence, and in some cases even loss of life,” he said.

In regulating tech and media companies, Collins said citizens are reliant on whistleblowers, investigative journalists, and self-serving reports from companies that manipulate their data.

Unless government gets involved, they said, the nation will remain ignorant of the spread of disinformation.

Tech companies need to increase their transparency, even though that is something they are struggling to do.

Yet big tech companies are constantly conducting research and surveillance on their audience, the performance of their services, and the effect of their platforms. Yet they fail to share this information with the public, and he said that the public has a right to know the conclusions of these companies’ research.

In addition to increasing transparency and accountability, many lawmakers are attempting to grapple with the spread of disinformation. Some propose various changes to Section 230 of the Telecom Act of 1996.

Hurd said that the issues surrounding Section 230 will not be resolved before the midterm elections, and he recommended that policy-makers take steps outside of new legislation.

For example, the administration of President Joe Biden could lead its own federal reaction to misinformation to help citizens differentiate between fact and fiction, said Hurd.

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Antitrust

CES 2022: Patreon Policy Director Says Antitrust Regulators Need More Resources

To find the best way to regulate technology, antitrust regulators need more tools to maintain fairness in the digital economy.

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Larent Crenshaw (left), head of Patreon's global policy team

LAS VEGAS, January 7, 2021 – The head of Patreon’s global policy team said federal regulators need more resources to stay informed about technology trends.

Laurent Crenshaw told CES 2022 participants Friday that Congress should provide tools for agencies like the Federal Trade Commission to enforce consumer protection standards.

“I’m not going to say that big tech needs to be broken up, but there should be appropriate resources for federal regulators to understand the digital marketplace,” he said. “We’re are still living in a world that is dominated by big actors, and we’re debating about whether to even give federal regulators the power to understand how the marketplace is moving toward digital.”

Crenshaw of Patreon said that more resources were necessary at the FTC in order to understand the digital marketplace. Patreon is a membership platform that provides a subscription service for creators to offer their followers.

Such resources would empower the agency to place appropriate safeguards for smaller technology innovators. “So in 10 [or] 20 years, it’s not just the replacements of the current Google, Apple, or Facebook, but something entirely new,” he said.

Panelists echoed Crenshaw’s point that consumer welfare should guide competition policy. Tyler Grimm, chief counsel for policy and strategy in the House Judiciary Committee, said that antitrust should bend to the consumer welfare standard. “Antitrust should leave in its wake a better economy,” he said.

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Section 230

Greene, Paul Social Media Developments Resurface Section 230 Debate

Five days into the new year and two developments bring Section 230 protections back into focus.

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Georgia Republican Representative Marjorie Taylor Greene

WASHINGTON, January 5, 2022 – The departure of Republican Kentucky Senator Rand Paul from YouTube and the banning of Georgia Republican Representative Marjorie Taylor Greene from Twitter at the beginning of a new year has rekindled a still lit flame of what lawmakers will do about Section 230 protections for Big Tech.

Paul removed himself Monday from the video-sharing platform after getting two strikes on his channel for violating the platform’s rules on Covid-19 misinformation, saying he is “[denying] my content to Big Tech…About half of the public leans right. If we all took our messaging to outlets of free exchange, we could cripple Big Tech in a heartbeat.”

Meanwhile, Greene has been permanently suspended from Twitter following repeated violations of Twitter’s terms of service. She has previously been rebuked by both her political opponents and allies for spreading fake news and mis/disinformation since she was elected in 2020. Her rap sheet includes being accused of spreading conspiracy theories promoting white supremacy and antisemitism.

It was ultimately the spreading of Covid-19 misinformation that got Greene permanently banned from Twitter on Sunday. She had received at least three previous “strikes” related to Covid-19 misinformation, according to New York Times. Greene received a fifth strike on Sunday, which resulted in her account’s permanent suspension.

Just five days into the new year, Greene’s situation – and the quickly-followed move by Paul – has reignited the tinderbox that is Section 230 of the Communications Decency Act, which shields big technology platforms from any liability from posts by their users.

As it stands now, Twitter is well within its rights to delete or suspend the accounts of any person who violates its terms of service. The right to free speech that is protected by the First Amendment does not prevent a private corporation, such as Twitter, from enforcing their rules.

In response to her Tweets, Texas Republican Congressman Dan Crenshaw called Greene a “liar and an idiot.” His comments notwithstanding, Crenshaw, like many conservative legislators, has argued that social media companies have become an integral part of the public forum and thus should not have the authority to unilaterally ban or censor voices on their platforms.

Some states, such as Texas and Florida, have gone as far as making it illegal for companies to ban political figures. Though Florida’s bill was quickly halted in the courts, that did not stop Texas from trying to enact similar laws (though they were met with similar results).

Crenshaw himself has proposed federal amendments to Section 230 for any “interactive computer service” that generates $3 billion or more in annual revenue or has 300 million or more monthly users.

The bill – which is still being drafted and does not have an official designation – would allow users to sue social media platforms for the removal of legal content based on political views, gender, ethnicity, and race. It would also make it illegal for these companies to remove any legal, user generated content from their website.

Under Crenshaw’s bill, a company such as Facebook or Twitter could be compelled to host any legal speech – objectionable or otherwise – at the risk of being sued. This includes overtly racist, sexist, or xenophobic slurs and rhetoric. While a hosting website might be morally opposed to being party to such kinds of speech, if said speech is not explicitly illegal, it would thus be protected from removal.

While Crenshaw would amend Section 230, other conservatives have advocated for its wholesale repeal. Sen. Lindsey Graham, R-South Carolina, put forward Senate Bill 2972 which would do just that. If passed, the law would go into effect on the first day of 2024, with no replacement or protections in place to replace it.

Consequences of such legislation

This is a nightmare scenario for every company with an online presence that can host user generate content. If a repeal bill were to pass with no replacement legislation in place, every online company would suddenly become directly responsible for all user content hosted on their platforms.

With the repeal of Section 230, websites would default to being treated as publishers. If users upload illegal content to a website, it would be as if the company published the illegal content themselves.

This would likely exacerbate the issue of alleged censorship that Republicans are concerned about. The sheer volume of content generated on platforms like Reddit and YouTube would be too massive for a human moderating team to play a role in.

Companies would likely be forced to rely on heavier handed algorithms and bots to censor anything that could open them to legal liability.

Democratic views

Republicans are not alone in their criticism of Section 230, however. Democrats have also flirted with amending or abolishing Section 230, albeit for very different reasons.

Many Democrats believe that Big Tech uses Section 230 to deflect responsibility, and that if they are afforded protections by it, they will not adjust their content moderation policies to mitigate allegedly dangerous or hateful speech posted online by users with real-world consequences.

Some Democrats have written bills that would carve out numerous exemptions to Section 230. Some seek to address the sale of firearms online, others focus on the spread of Covid-19 misinformation.

Some Democrats have also introduced the Safe Tech Act, which would hold companies accountable for failing to “remove, restrict access to or availability of, or prevent dissemination of material that is likely to cause irreparable harm.”

The reality right now is that two parties are diametrically opposed on the issue of Section 230.

While Republicans believe there is unfair content moderation that disproportionately censors conservative voices, Democrats believe that Big Tech is not doing enough to moderate their content and keep users safe.

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