Harold Feld Argues That Increased Regulation Will Be More Successful than Breaking Up Big Tech

WASHINGTON, July 15, 2019 — Rather than seeking to break up big technology giants, Congress should instead focus on ratcheting up regulation of the online platform players to curb their greatest abuses, public interest advocate Harold Feld argued on Monday.

Feld, the author of the recent e-book, “The Case for the Digital Platform Act: Market Structure and Regulation of Digital Platforms,” argues for proactive behavior remedies to limit the extent of data collected by digital platforms, and to mandate data portability and rights of deletion.

These steps will be necessary to balance the promotion of competition with the protection of current benefits, Feld and others said at a roundtable event hosted by the German Marshall Fund.

Feld, vice president at Public Knowledge, said the first step towards regulation is definition. He defined a digital platform by three criteria. First, the service must be accessed via the internet.

Second, it must be multisided, allowing users to play multiple roles: content producers and consumers, information generators and searchers, product sellers and reviewers.

Finally, digital platforms enjoy particular types of powerful network effects. These network effects are a significant part of what make them so useful but can also make it difficult for competition to thrive.

Although the possibility of breaking up big tech should not be ruled out entirely, Feld explained that this would not necessarily have the expected effect, calling it “the starfish problem.” If certain species of starfish are torn apart, each individual arm will grow into a new starfish.

Mandating divestiture could have a similar result, said Feld. For example, if Google and YouTube were broken apart, the new companies would still dominate the markets of search engines and video sharing.

Likewise, the breakup of Facebook, Instagram, and WhatsApp would create three new platforms each dominant in their respective markets that would probably avoid competing with one another so as to preserve that power. If they were to initially compete, one platform would likely dominate over the other two.

Although recent months have seen bipartisan calls to break up big tech, Feld warned that such an effort would be “incredibly difficult” in the digital world and would fail to address the underlying factors that drove the market to consolidation in the first place.

Besides data regulation, other potential regulations include implementing consumer proprietary network information rules protecting the information of competitors that must operate on platforms to reach consumers, requiring fair and reasonable non-discriminatory licensing for certain intellectual property, and expanding the private right of action for consumers.

Although some argue against increased regulation on the basis that the market will work itself out, this is not only unlikely but simply not the private sector’s role, said Feld, urging Congress to create and implement digital platform regulation and potentially create a new regulatory body to oversee enforcement rather than letting a few huge companies set their own rules.

Some sort of “digital commerce commission” is necessary, agreed Benton Senior Fellow Gigi Sohn. She said that communications legislation has been inadequately enforced.

Instead of a new regulatory layer, the Federal Trade Commission and Federal Communications Commission should just do their jobs, argued former FCC Commissioner Mignon Clyburn. She suggested allocating more resources to the FTC and improving harmonization between the agencies.

Contrary to what some lawmakers suggest, Section 230 of the Communications Decency Act does not grant platforms complete immunity or protect them from criminal law, Feld said. Removing it would lead to widespread confusion and an “invariable deluge of lawsuits,” and likely do nothing to address the problem at hand.

“Until there’s something better, it needs to stay in place,” he said, adding that once Congress works to develop new content moderation regulations, the fight over Section 230 will become completely irrelevant.

Feld advocated for a mixed model of direct prohibition of certain types of harmful content, reporting requirements for potentially illegal activity, and private monitoring under government oversight.

He also suggested limiting penalties for breach of conduct by restricting an offender’s ability to post public content rather than banning them from the platform altogether.

(Photo of event by Emily McPhie.)