Privacy and crypto will likely lead tech policy under divided Congress

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After what began as a hopeful year for tech policy, the 117th Congress is about to close its term with many key efforts underway.

Despite bipartisan support for antitrust reform targeting digital tech giants, a digital privacy framework and new safeguards for children on the internet, lawmakers have gone home without passing bills that are hallmark of these issues. And the Senate has yet to vote to confirm the final nominee to fill the Federal Communications Commission, leaving that agency incomplete for the entirety of the Biden administration so far.

Congress passed the CHIPS and Science Act, which encourages domestic manufacturing of semiconductors after shortages highlighted the risks of overseas production. He also included in the year-end spending package a bill that will raise money for antitrust agencies by increasing merger filing fees on large transactions, as well as a measure banning TikTok on government devices. in light of national security concerns due to its ownership by a Chinese company.

And even on many bills that remain in limbo, this year’s progress shows significant progress. Such is the case with privacy legislation, where a bill proposed this year won bipartisan support, passing a House committee with a near-unanimous vote. Yet it lacks the support of Democratic Senate Commerce Committee Chair Maria Cantwell of Washington, who is seen as key to passing the legislation.

“Any privacy legislation should be bipartisan,” said Craig Albright, vice president of US government relations for enterprise software industry group BSA. “Senator Cantwell needs to be part of the process. There’s no getting around her, she’s going to be one of the key leaders. But I think if the House can demonstrate continued progress, I think that will create more of a environment for the Senate to be able to act.”

Albright added that the House committee leaders who championed the bill, Energy and Commerce Chairman Frank Pallone, DN.J., and Ranking Member Cathy McMorris Rodgers, R-Wash., Who should become president next year under the control of the Republican House, proved with the vote of the panel “that, on the substance, you can propose a bill that enjoys broad bipartisan support”.

“I think that puts this next Congress in a stronger starting position than we had before,” Albright said.

Lawmakers will face a tougher landscape next year if they hope to pick up where they left off on tech reform. With Democratic control of the Senate and Republican control of the House in 2023, political observers point out that bipartisanship will be key to making bills law.

While that could dash hopes for most antitrust reforms, which while bipartisan generally aren’t backed by Republicans expected to lead the House and key committees, it could mean there’s still a chance for legislation. on digital privacy, where both sides stressed the urgency despite years of not compromising on points of disagreement.

Still, lawmakers who have led aggressive antitrust proposals and other tech reforms have signaled they will continue to fight for those measures next year.

“This is clearly the beginning of this fight and not the end,” said Sen. Amy Klobuchar, D-Minn., whose bill banning online platforms from promoting their own services in their markets has failed. managed to make them essential year-end invoices. , said in a statement after the text of the spending package was released. “I will continue to work across the aisle to protect consumers and strengthen competition.”

The senses. Richard Blumenthal, D-Conn., and Marsha Blackburn, R-Tenn., said in a statement that while their Kids Online Safety Act, establishing new safety barriers for sites likely to be visited by children, and The Open App Markets Act, imposing new regulations on app stores operated by Apple and Google, was not included in the spending bill, they are “resolved to reintroduce and pass this legislation in the next Congress.” The pair blamed the bills’ failure on the tech industry’s intense lobbying efforts against them.

A survey of members of Congress by Punchbowl News found that while the majority of Capitol Hill respondents expect a less productive session in terms of passing meaningful legislation, the tech agenda is at the top of the list. list of expected priorities. Punchbowl said 56% of respondents expected action on bills targeting Big Tech, a percentage that was second only to those who expected to see action targeting inflation.

Tech regulation is Democrats’ top priority, according to Punchbowl, with 59% of respondents choosing it as one of their top issues. Of lobbyists and business executives polled by Punchbowl, 55% predicted lawmakers could crack down on a big tech company, with TikTok the most likely target, followed by Facebook parent company Meta.

And while that’s unlikely to result in new laws, House Republicans have signaled they’ll use their majority to focus on tech issues that have taken center stage as Democrats hold the hammer in the two rooms. Rep. Jim Jordan, R-Ohio, who is expected to lead the House Judiciary Committee, indicated he would likely use that power to focus on tech companies’ dealings with Democratic politicians and allegations of bias and censorship by social media platforms.

Earlier this month, he wrote to the CEOs of Apple, Amazon, Google, Meta and Microsoft, demanding information about what he called “the nature and extent of your companies’ collusion with the Biden administration. He said the letters should serve as a formal request for preservation of documents related to the claim.

Lawmakers are also likely to spend more time scrutinizing crypto regulation, after the fall of FTX exchange, its founder Sam Bankman-Fried’s alleged fraud propelled the industry into the spotlight in front of Congress. Lawmakers have already considered some laws targeting the industry, and incoming House Financial Services Speaker Patrick McHenry, RN.C., has indicated that creating a clearer regulatory framework for crypto is a priority.

One of the key questions lawmakers have wrestled with is who should be the agency overseeing the industry. This question has so far gone unanswered, with many industry players advocating for the Commodity Futures Trading Commission while some consumer advocates prefer the larger and better resourced Securities and Exchange Commission. A major bipartisan bill in the Senate would put the CFTC in the driver’s seat.

Just like in 2022, next year’s technology policy agenda will be subject to the whims of Congress and could be particularly sensitive if the country experiences some level of economic downturn, as many experts expect.

“Everyone has their desire to regulate technology. But I can’t help but wonder what that desire looks like, based on the economic outlook for the United States in the first quarter of 2023,” said James Czerniawski, senior policy analyst for technology and innovation at the Koch-backed Americans for Prosperity advocacy group, pointing to high interest rates and job cuts in the tech sector. “If we were to go and get into a recession sometime early next year, which is not out of the realm of possibility, it could cause Congress to shift its priorities to more immediate things.”

Czerniawski said the push for tech regulation seems to be based on an “assumption that tech is this thing that’s just immutable and it’s going to be there for the test of time with these company names attached to it. . And, if anything, I think last year and the changes have shown that’s not necessarily true.”

“I think it’s pretty easy to beat Big Tech when they’re so successful and generating record profits,” said Tom Romanoff, technology project director at the Bipartisan Policy Center think tank, which received an award. funding. Amazon and Meta, according to recent donor disclosures. “It becomes a different equation when voters and districts are upset because they’ve been laid off in one of these high-paying jobs. And so I think if there’s an economic downturn, the attention shifts will shift to the economy.”

Romanoff added that some global dynamics could also distract from increased technology regulation, such as heightened tensions between China and Taiwan, where much of the semiconductors are currently produced. He said an event like this could lead to a shift from an “inner focus of what these big corporations mean to American democracy, to a kind of national defense strategy, what does that mean in wartime to regulate an industry which is very essential to any wartime industry.”

Still, BSA’s Albright says the focus on the tech sector in Congress remains high because concerns that have existed in the past aren’t going away.

“I think the economy will go up and down,” he said. “But the importance of technology policy issues will always be strong.”

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