As federal regulators sharpen their focus on big tech, expect to see and hear more from Rep. Ro Khanna (D., Calif.), a Silicon Valley congressman who is shaping legislation that is tantamount to an internet Bill of Rights.
But he’s also dubious of major overhauls of Facebook Inc.
and Alphabet Inc.’s Google
all of whom may be subject to investigations by either the Justice Department or Federal Trade Commission, according to multiple reports. Echoing the sentiment of antitrust experts, Khanna said investigations should be executed “with surgical precision and not with a sledgehammer.”
“We need smart, thoughtful legislation, not a reflexive break up of companies,” Khanna told MarketWatch in a phone interview late Friday. “That means protecting consumer privacy and competition without hurting innovation and our (U.S.) competitive edge over China.”
Khanna is one of several federal lawmakers from both sides of the aisle who have pledged to make big tech more responsible for how it collects and manages the data of billions of people. Yet he also wants to help lead Congress to push for high-speed internet and tech job growth across America. “It is embarrassing how technologically illiterate most members of Congress are,” he said.
Speaker of the House Nancy Pelosi (D., Calif.), the recent victim of a doctored video on Facebook that depicted her apparently slurring her words, early last year empowered Khanna – whose district is home to Apple, Google, Tesla Inc.
, Intel Corp.
, and others – to come up with a set of privacy principles to protect American consumers.
Khanna is working with House Minority Leader Kevin McCarthy (R., Calif.), a vocal critic of social media companies, and others on the framework of legislation that would offer sweeping data privacy laws in the form of network neutrality, greater transparency in data collection practices by tech companies, and opt-in consent for data collection. McCarthy and Khanna, who co-sponsored a law in 2017 that established tech apprenticeships for veterans, are looking at measures to keep “foreign bad actors” from abusing tech platforms like Facebook and Twitter Inc.
“We expect six to seven bills that are well-crafted and nuanced that protect consumers without impeding innovation,” Khanna told MarketWatch. Those guidelines hew more closely to the Europe’s General Data Protection Regulation and California’s upcoming privacy law in 2020 that place tighter restrictions on data-collection practices.
One possible bill would give consumers permission to “opt in” rather than “opt out” of digital systems before their data can be collected and shared with third parties. Others would force companies to notify customers of breaches in a “timely” manner; give consumers the right to move their data; and give consumers the right “to obtain, correct, or delete personal data controlled by any company.”
Khanna’s legislative path to regulation is a more likely scenario as tech companies voluntarily make changes to their businesses before antitrust regulators force them to after lengthy probes that could take years, says Anurag Lal, CEO of Infinite Convergence Solutions Inc., a mobile-messaging service for large businesses.
“Technology and business models change based on the preferences of consumers,” Lal told MarketWatch in a phone interview. “What this all comes down to is not assessing and penalizing market power, as it did with AT&T Inc.
(during its divestiture in the 1980s), but reacting now to the growing influence a Facebook has on the behavior of the consumer base in things like elections.”
While Khanna is working on legislation with input from nonprofit organizations such as the Electronic Frontier Foundation and tech giants Apple, Google, Facebook, and Twitter, Democratic presidential hopefuls have demonized big tech. Sen. Elizabeth Warren (D., Mass.) wants to break up Facebook, Amazon.com and Google; Sen. Amy Klobuchar (D., Minn.) aims to tightly regulate Facebook; and Sen. Bernie Sanders (D., Vt.) has serious problems with Amazon’s employee practices.
The irony is that Democrats, who usually campaign against monopolies, have been chummy with the tech industry for years. Presidents Barack Obama and Bill Clinton were loyal supporters of an industry they correctly believed would turbocharge the U.S. economy, and they regularly hobnobbed with the likes of Steve Jobs, Mark Zuckerberg, and Bill Gates. Silicon Valley reciprocated as a generous contributor to Democratic candidates, including Khanna, while historically benefiting from the political party’s policies.