Big Tech Will Survive But Not Thrive In Washington, D.C.

Tech is ubiquitous in American society. So are the policymaking efforts to bring Big Tech under control. But big anti-Big ambitions among lawmakers and regulators can often get cut down to size.

Tech Was Good Until It Was “Big”

It was a different time at the start of the Obama ministration in January 2009. ExxonMobil
XOM
and Walmart
WMT
were the two largest American companies by market cap. Only about a quarter of Americans owned a smartphone. Lina Khan was still in college. “Uber” was a modifier, not a company.

The Obama campaign in 2008 was the first presidential campaign to truly harness the power of social media for fundraising, educating, and organizing. That success was replicated in the 2012 campaign. For Democrats in power, tech was a burgeoning field that was a force for good. Social media was seen as a major catalyst in the democratic Arab Spring.

There was little need for legislation or regulations to curb a “good” industry. The consumer welfare standard, the traditional antitrust analysis based on consumer costs, didn’t raise red flags for tech platforms that were free for users.

Yet success begets more success, which begets scrutiny. Tech became “Big.” When an industry is big, it’s seen as big trouble in Washington, D.C. Big Banks, Big Tobacco, Big Oil, and Big Pharma all invite scrutiny and pushback.

The industry was first referred to as “Big Tech” around 2013. By then, Apple
AAPL
was the largest American company and Google
GOOG
(now Alphabet) was the third largest. The last decade saw big companies getting bigger, often at the expense of small businesses. Big Tech was at the center of this.

Unfettered growth also began to reveal some of the more controversial elements of power. Edward Snowden’s leaking of a National Security Agency surveillance program in 2013 showcased the cooperation of tech companies in data collection of American citizens.

The 2016 election saw Russian operatives spread disinformation through social media platforms like Facebook and Twitter. There was the illegal data harvesting of Facebook users by Cambridge Analytica for political campaigns.

An ascendent labor movement has also brought scorn to Big Tech. President Joe Biden proclaimed he will lead “the most pro-union administration in American history.” He has supported unionization efforts at Amazon
AMZN
, finding the company to be a useful rhetorical foil on labor (as well as minimum corporate taxes). His administration is also pushing to categorize gig economy workers in tech companies like Uber and Lyft
LYFT
as employees rather than independent contractors.

This anti-Big Tech view in Democratic circles culminated in Biden nominating Lina Khan to head the Federal Trade Commission (FTC). She is one of the leading “hipster antitrusters” who is embracing the “New Brandeis” approach to regulating corporate power. It’s not just prices that matter in her antitrust analysis, but also the impact on small businesses, democratic norms, and workers.

Read Related Also: St. Louis City SC Stadium Opener Highlights Importance Of US Market

In this era of Democrats attacking Big Tech, Republicans aren’t rushing to the industry’s defense. With the GOP embracing its working class and populist roots, conservative Republicans are the most likely cohort to say Big Tech has too much power and influence. This stems from a perceived censorship of conservatives on social media platforms.

Big Tech Holds The Upper Hand In Congress

When a majority of Americans on the left and right believe Big Tech should be better regulated and constrained, the knives are out for the industry in the policymaking world. Regardless of whichever party controls the House or Senate, there will be hearings, investigations, and legislation aimed at Big Tech.

This Congress, there have been bipartisan efforts to tackle Big Tech’s growing power. House Judiciary Subcommittee on Antitrust Chair David Cicilline (D-R.I.) and Ranking Member Ken Buck (R-Colo.) collaborated on an antitrust legislative package aimed at Big Tech. House Energy and Commerce Committee Chair Frank Pallone, Jr. (D-N.J.) and Ranking Member Cathy McMorris Rodgers (R-Wash.) worked together to create a national consumer data privacy bill. Senate Judiciary Subcommittee Chair Amy Klobuchar (D-Minn.) has teamed up with Republicans like Senate Judiciary Committee Ranking Member Chuck Grassley (R-Iowa) and Senator Marsha Blackburn (R-Tenn.) to develop legislation prohibiting online platforms, like Amazon, or app stores, like Apple, from unfairly preferencing its own products or apps. All these measures received broad bipartisan backing in committee.

But it’s not “how much” support legislation has that matters. Rather, it’s “who” supports the legislation. Without the support from congressional leadership or key members, a popular bill can languish and not receive a vote on the House or Senate floor. House Minority Leader Kevin McCarthy (R-Calif.) is opposed to most antitrust legislation, taking his cues from House Judiciary Committee Ranking Member Jim Jordan (R-Ohio). They don’t want to empower Biden’s progressive antitrust regulators. Rather, McCarthy and Jordan are focused more on perceived conservative censorship and changing the liability protections of online platforms (Section 230). While some Democrats, including Biden, support changes to Section 230, it’s for different reasons focused more on misinformation and hate speech.

Meanwhile, House Speaker Nancy Pelosi (D-Calif.) has refused to put data privacy legislation up for a vote on the House floor. She echoed the concerns from her home state that the legislation, the American Data Protection and Privacy Act, would preempt California’s own data privacy laws. Senate Commerce Committee Chair Maria Cantwell (D-Wash.), who holds jurisdiction over privacy legislation, has shared similar concerns, citing the legislation as too weak.

Finally, there is Senate Majority Leader Chuck Schumer’s (D-N.Y.) refusal to hold a floor vote on Klobuchar’s antitrust legislation, including the American Innovation and Choice Online Act and the Open App Markets Act. Both pieces of legislation face a barrage of Big Tech pushback. The industry has become a lobbying powerhouse, with Amazon, Meta, and Alphabet being some of the top spenders in lobbying this year. The 2022 midterms may be over, but Schumer knows the 2024 election cycle will be an uphill battle to maintain the majority. He doesn’t want to put vulnerable Democrats in a tough vote.

In a divided Congress next year, the onus will be on party leaders to try to find some common ground. As of now, it doesn’t seem like either side is willing to expend the political capital necessary to reach a bipartisan deal.

The Real Big Tech Battles Will Be In The Courts

While Congress dithers, antitrust regulators and enforcers aren’t waiting. Lawsuits are being brought against Big Tech companies by Democratic and Republican state attorneys general (AGs). The AGs are allied in some cases with federal antitrust enforcers, like Lina Khan at the FTC and Jonathan Kanter at the Department of Justice (DOJ). Both Khan and Kanter are trying to make life difficult for Big Tech and are looking at novel approaches to curbing corporate power.

The Supreme Court is also hearing a landmark case on Section 230 to decide whether companies like Alphabet are liable for directing users to extreme content.

Big Tech’s political clout won’t have the same impact on the court system as it does on Congress, where the cases will be decided on legal merits. Rather, Big Tech’s clout comes in its resources. The fiscal year 2022 annual budget for the FTC and DOJ’s antitrust division was approximately $570 million. Apple earned that much revenue in just about 12 hours last fiscal year. Antitrust enforcers will face an uphill battle to go toe-to-toe with Big Tech behemoths. Without legislation to change the antitrust framework, the courts may not be keen on upending the traditional paradigm of analyzing corporate power that has benefitted Big Tech in the past.

In the end, the policy world is not too bright for the once shooting stars of tech. Yet “Big” industries can survive political, legislative, and legal attacks. Those attacks are just beginning for Big Tech, but the industry is primed to keep the big anti-Big ambitions in check.