What A Republicancontrolled House Might Mean For Tech: Plenty Of Handwringing Over Section 230 Liability Shield
Goodbye technical regulation bill. Hello article 230 debate.
That could mean big money for technology after the midterms, when Democrats retain control of the Senate but Republicans fight for control of the House of Representatives. As a result, Beltway experts are still awaiting a series of hearings on Section 230, which protects online speech, and Ohio House Judiciary Committee Chairman Jim Jordan is reportedly pointing the finger at technology executives.
The Biden administration thinks differently, regardless of the midterm results. On Wednesday, White House deputy press secretary Emily Simmons said "there is bipartisan support for the anti-technology bill and there is no reason Congress cannot act before the end of the year."
However, his predictions will have to be tested in practice, industry experts say, after more than a year of promises of a quick and comprehensive vote on technology legislation have come to nothing.
Alpha Capital analyst Robert Kaminsky expects Republicans to focus on issues of censorship and political speech, which will "generate an equal and opposite response from Democrats who want to combat online misinformation," he told MarketWatch.
"It turns out that the new law isn't going to pass," said Kaminsky, who correctly predicted a significant lack of technical regulation in the last years of Democratic administrations because the law was largely written and not a legislative priority. "Republicans will continue to be interested in antitrust legislation, but we don't see support from party leaders."
Kaminsky said simple math and a general attitude toward technology law made it nearly impossible for Congress this year to do anything at a "crippled" time. Congress has less than 25 legislative days to act on full appropriations, the NDAA (defense authorization), healthcare and possible tax extensions and judge approvals, he said.
Congress may lose interest in apps at a time when major tech companies are cutting jobs (parent Facebook Meta Platforms Inc., Snap Inc. and Microsoft Corp.), freezing jobs (Apple Inc. and Amazon.com Inc.) or cutting costs. (Google Alphabet Inc.).
According to a Punchbowl poll, a worried 65% of aides don't think the bill will pass, while only 12% of Senate staff are optimistic.
Seeing the Speaker's hammer, Republican Representative Kevin McCarthy of California, laid out a restrictive technology agenda: "Strengthen data privacy and security protections, give parents more tools to protect their children online, and discourage companies from promoting policies people."
The goal is to repeal Section 230 of the Communications Courtesy Act, which largely protects technology platforms from being held liable for what users post. Expect tech executives to return to Capitol Hill, where they are being questioned by conservatives about far-right censorship.
For more than two years, Democrats, backed by several major Republicans, have been hard at work crafting antitrust legislation to control Big Tech after years of hearings on Capitol Hill with executives from Meta, Google, Apple, Amazon, and Twitter Inc. .
"Even with the Democrats' unified control of government, there has been a stalemate on technology law," Kaminsky told MarketWatch. "In the Republican Congress, we are seeing a rebuild of the stalemate, but we don't expect to be anywhere near a breakthrough."
Otherwise, there may be little hope in the Senate, where Democrats hold a 50-49 majority and could extend their lead with a runoff in the Georgia Senate on Dec. 6. The Infrastructure Act, the American Rescue Plan, Climate Change, and CHIPS Act were reintroduced and enacted after being defeated during the last sessions of the busy legislative session.
"One lesson middle voters learn is that they want a bipartisan commitment, a demonstration that something can be done. Maybe it's technology," Ed Mills, an analyst at Raymond James, told MarketWatch.
Senator Amy Klobuchar, D-Minnesota and lead author of the antitrust bill, partnered with Republican Senator Chuck Grassley of Iowa on the US Internet Innovation and Choice Act, which narrowly passed the Senate. The bill would prohibit tech giants from using their enormous bargaining power to endorse their own products or services.
If Klobuchar remains chair of the Senate Judiciary Committee's antitrust subcommittee, "he still has a shot at the bill," Mills said, noting his interest in the matter (his book on antitrust enforcement is due in 2021) and his ambition to run for president. "He needed brand achievement, and it worked for his brand as a Minnesota populist," said Mills. Grassley is now the top Republican on the bench.
Mills hopes that at the next session of Congress next year, Senator Joe Manchin, a West Virginia Democrat, will introduce the tough energy licensing bill and China bill.