Consumer rights

After three years of promises, attempt to regulate tech boils down to one bill

After three years of talk of passing major tech legislation for the first time since the dawn of the internet, Democrats in Congress appear to have only one chance to pass legislation, and critics doubt that the effort succeeds.

Senate Majority Leader Chuck Schumer, DN.Y., has pledged to vote on a high-profile anti-monopoly bill by Sen. Amy Klobuchar, D-Minn., as early as this month, according to sources in the House and Senate. It appears to be the only bill of several proposed that has a chance of being introduced before Congress’s summer break and focusing on campaigning for the midterm elections.

However, tricky moderate Democrats like Sen. Maggie Hassan, DN.H., and Dianne Feinstein, D-Calif., could torpedo things under pressure from Big Tech and a host of competing issues ranging from gun violence and Roe v . Wade to inflation and the war in Ukraine. If no legislation is passed this summer, experts expect the push to regulate tech companies will be pushed back, potentially for years.

Three years ago this week, federal regulators launched investigations into tech’s Mount Rushmore in an effort to rein in their growing power, and lawmakers clung to the effort with a series of bills aimed at modernize antitrust laws and create basic regulatory structures for technology. Yet none of the proposed bills reached the floor of the House or Senate for a full vote, leading to a sense of exasperation that pervades all parties.

Developers are resigned to inaction because the biggest names in tech wield more power than ever in the age of COVID, and lawmakers fundamentally don’t understand complex and sophisticated digital ecosystems. Lawmakers and consumer rights advocates are troubled by the political stalemate in Washington that prevents shaping substantive law. And companies dependent on vast digital ecosystems fear that punitive measures against walled-garden keepers will unwittingly damage them.

This year’s tech regulations “will never happen,” said Marco Bellin, chief executive of Datacappy, a cybersecurity company that joined with Alphabet Inc.’s GOOG,
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GOOGL,
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Google for years. “There is a sense of desperation in putting the brakes on these companies. They have so much money and power.

Read more: Time is running out for Congress to pass tech legislation

The latest, greatest move – the American Innovation and Choice Online Act led by Klobuchar – was revised last week in a last-minute push. The new bipartisan anti-monopoly bill, which prohibits tech companies from favoring their own products over those of their competitors, focuses more narrowly on Google, Amazon.com Inc. AMZN,
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and Facebook’s parent company Meta Platforms Inc. FB,
-3.70%,
through Apple Inc. AAPL,
-3.83%
remains the main target and most vocal critic of the bill.

“If this comes to the Senate and passes, I think it puts tremendous pressure on the House to deliver on its promises, especially given President Biden’s endorsement,” said Ernesto Omar Falcon, legislative counsel. principal of the Electronic Frontier Foundation, to MarketWatch.

The task will not be easy, with gun control hogging speaking time and pending votes on veteran bills and competition with China taking precedence over tech regulation. A likely scenario, if a vote were to take place, would be in July if Schumer estimates he has nearly the 60 votes needed to pass the bill, said a person who works closely with the Senate.

In a recent poll, 76% of voters in Arizona, Georgia, Nevada and New Hampshire said they support the US Innovation and Online Choice Act. But in a sign of these troubled times, they also consider inflation and job loss far more important – nearly seven in 10 Americans across political spectrums think inflation is the most important problem, and only 3% consider technology regulation a top priority, according to new research from the Consumer Technology Association (CTA).

“At a time when inflation is the number one concern of voters, Congress must also listen to its constituents,” Linda Moore, CEO of TechNet, told MarketWatch. “Only 3% of voters rank tech regulation as a priority [while] 97% of voters want to see action on the issues that matter to them, including passing a federal privacy law, which more than 80% of voters support.

Michelle Finneran Dennedy, CEO of PrivacyCode Inc., pinned her regulatory hopes on Klobuchar as “the best hope for pragmatic and comprehensive privacy legislation, but also the sworn enemy of lobbyists and propaganda machines of the most expensive ad revenue tech giants”.

Therefore, “the final answer for my best guess of getting a full vote this summer is a no,” Dennedy told MarketWatch.

In depth: what is a platform and what should be done? The answer could determine the future of Apple and the rest of Big Tech

Big Tech companies maintain that recent changes to the bill are minimal and do not address national security concerns. TikTok is now included in the bill, but foreign companies like Tencent Holdings 700,
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and Alibaba Group Holding BABA,
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are not, allowing them to operate without the same oversight as those based in the United States

Apple officials told MarketWatch the revised bill remains flawed because it compromises consumer data security by allowing developers to upload their apps to the App Store, essentially turning an iPhone into a software-aware Android. malicious. Apple said it spent nearly $1.5 billion last year to stop fraudulent transactions on the App Store.

“We remain concerned that this legislation threatens to break that pattern and undermine the privacy and security protections our users depend on,” an Apple spokesperson said in a statement to MarketWatch. “Governments and international agencies around the world have explicitly advised against sideloading requirements, which would allow malicious actors to target users – including children – with malware and scams, and allow data-hungry companies to more easily track users without their consent.

A source close to Klobuchar counters that the bill does not say that side loading is permitted, but it also does not mention that side loading is prohibited. The revised version, they say, strengthens security and privacy.

See also: Apple has spent decades building its walled garden. He may be starting to crack

Other Big Tech players are less critical of the bill than Apple, but find plenty of flaws in what will likely pass as a litmus test for any future tech legislation.

The bill “threatens global technological leadership and America’s national security. Privacy and cybersecurity experts, along with members of Congress, economists and small businesses, have urged Congress to watch before taking the leap,” said Mark Isakowitz, vice president of government and corporate affairs. public policies at Google.

Amazon has also taken the legislation to task. “These changes do not address serious concerns we and others have previously raised about how the legislation would harm customers and small businesses,” a company spokesperson told MarketWatch.

Toyin Kolawole, CEO of Iya Foods, agrees with this sentiment from Amazon. His company gleans 30% of its business through Amazon’s e-commerce platform, he told MarketWatch.

“Has Congress considered the negative effect of the legislation on thousands of businesses like mine that rely on Amazon’s ecosystem?” Kolawole asked. “Amazon’s platform gives me and so many others access to wide distribution, and changes to [Amazon] would harm our businesses.