Issues Decoded
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Issues Decoded

Techlash is at the center of national politics

What is techlash and who will be affected?

Photo by Kevin Ku on Unsplash

Techlash is a term first coined by The Economist to describe a widespread negative reaction to the growing power and influence of large technology companies, particularly those based in Silicon Valley. Techlash stems from consumers who are losing trust in tech giants and governments who resent the increasing power of these companies and looking for ways to rein them in.

Among different audiences, Techlash has been used to describe a broad set of issues such as tech addiction, data privacy, antitrust, tax issues, gender discrimination, election interference, political bias, fake news, hate speech, AI ethics, excessive profits, and more.

Techlash is at the center of national politics. But while policymakers and media are targeting a few specific dominant players (Facebook, Amazon, Apple and Google) and significant platforms (Uber/Lyft, AirBnB, Twitter), hardware and software companies (Dell, Oracle, Microsoft, IBM) face less of a threat and are looking to stay out of the crosshairs. And while criticizing technology is politically appealing to some, most policymakers understand the importance of the sector to U.S. growth, employment, global competition and innovation in areas such as 5G, quantum computing, distance learning and IoT.

The technology sector is driving economic disruption, creating new business models and threatening brick-and-mortar industries. CEOs are under greater pressure to engage on social issues and demonstrate purpose. There are increasing calls to “fix capitalism” through systemic reforms to tax policy, trade, competition and heightened regulation and oversight. Policy makers and the public are viewing technology companies through the lens of good tech vs. bad tech. Companies who want to be seen and valued as “good” tech companies need to decide how to navigate the environment. That may involve advancing proactive policy solutions to ensure they are not seen as “bad” tech.

Technology firms are facing policy and reputational challenges across several fronts, including:

Federal agencies. Tech is in the antitrust crosshairs. Unlike during the Obama administration, Silicon Valley does not have a friend in President Trump. The president has repeatedly warned that tech companies could be in a “very antitrust situation.” The U.S. Department of Justice (DOJ), working with as many as 46 state attorneys general, and the Federal Trade Commission (FTC) are investigating tech companies. DOJ is looking at allegations of unlawful agreements designed to create a dominant company position and limit competition and market share. The FTC is reaching out to smaller technology companies for reports of anti-competitive conduct and mergers.

Congress. The House Judiciary Committee’s antitrust subcommittee has launched a formal review of competition in the tech industry. The Senate Judiciary Committee is examining the power of major technology companies.

2020 presidential candidates. Several 2020 Democratic candidate have taken aim at the tech sector, marking a dramatic escalation against an industry that has historically supported Democrats. President Trump is attacking social media’s alleged political bias. Democratic presidential candidate Sen. Elizabeth Warren is pushing a policy plan to break up tech giants such as Amazon and Facebook.

State governments. On issues such as privacy and data breaches, governors, AGs and state legislatures are becoming more active. On October 22, 46 attorneys general joined a New York-led antitrust investigation into Facebook.

Global action. Other countries are taking action against technology firms. Australia, Canada, the European Union, France, Germany, New Zealand and the United Kingdom have [1] passed new laws regulating online privacy and harmful content, [2] commissioned reports on disinformation and journalism in the digital age, [3] taken actions to protect competition, or [4] levied steep fines or tax liens against U.S. tech firms. Global oversight of U.S. tech companies is likely to accelerate. Margrethe Vestager, EU Competition Commissioner, has been reappointed to five more years and with greater powers. Even if a short-term trade agreement with China is negotiated, technology will be at the center of U.S.-China competition for years to come.

Tech employee activism is rising. Employees at Facebook, Google, Amazon and other companies have targeted their company’s leadership, staged sit-ins and protests, and are active in political conversations on their own social platforms.

Political speech

Both U.S. political parties are seeking to legislate or regulate political speech on social platforms, but Democrats and Republicans do not agree on where to focus their efforts. Liberals are concerned about the possibility of right-wing or foreign election manipulation. Conservatives say the tech platforms use algorithms that discriminate against their views. While some states have disclosure rules around political advertising, national efforts to regulate online ads more tightly have stalled.

Privacy

Democrats and Republicans both want tougher rules on user privacy. Many companies are adopting the EU’s General Data Privacy Regulation (GDPR) as a de facto standard. But a new California law may set an even stricter standard. California’s privacy law will go into effect on January 1, 2020. Other states are adopting similar rules, providing a patchwork of regulatory mandates across different jurisdictions. Earlier this year, the CEOs 51 tech companies signed an open letter to Congress asking for a federal law to supersede the rising number of state laws. Privacy advocates say the industry wants to use its influence to craft a “watered down” federal law. Congress is not expected to pass legislation in 2019.

Tech responds

Technology companies such as Amazon, Apple, Facebook and Google have ramped up their government relations activities in Washington. The four firms spent a combined $25 million during the first six months of 2019 on in-house and outside lobbyists to shape policy in Congress and within regulatory agencies, according to the Center for Responsive Politics. They also spend money through industry associations, think tanks and advocacy groups to amplify their policy positions.

Public opinion is divided

Public opinion is divided on technology regulation. Close to half of U.S. adults (48%) in an Aug. 1–14 Gallup poll said the government should increase its regulation of technology; 40% said government regulation should not change, and 10% said they should face less government regulation. The poll also showed that 46% of Americans have a generally positive opinion of the tech sector, while 33% viewed technology companies negatively and 22% said they have a neutral view of these firms. A recent Pew Research Center poll found that the percentage of adults who said that they believe technology companies are having a positive impact on the U.S. dropped from 71% in 2015 to 50% today.

In the face of accelerating global populism and widespread concerns with inequality and insufficient competition, criticism of big, global tech will persist beyond 2020 in the United States and around the world.

Edited by Lexi Mondot

Want to work with us? For inquiries, please reach out to Ellen DeMunter at Edemunter@powelltate.com.

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Jim Meszaros

Jim Meszaros

Washington DC | International consultant to governments, multinational corporations and foundations on global economic, trade, development and climate issues