Big tech is facing increasing scrutiny every day as consumers and policymakers grow concerned over the enormous influence a handful of companies have on the market. Presidential candidates like Elizabeth Warren have openly talked of breaking up tech giants like Amazon. These aren’t just fringe positions. Recent news shows the federal government taking aim at Amazon, Google, Facebook, and Apple, with the Justice Department opening probes of Google and Apple and the Federal Trade Commission assuming oversight of Facebook and Amazon. The market responded to this news with a 1.6% drop on the Nasdaq on June 3. Clearly investors are anxious about talk of tech regulation.
So could we see a slew of new regulations over big tech in the near future? It’s certainly possible. The public outcry that led to Amazon cancelling its HQ2 plans for New York suggest the tech giant isn’t invincible and organized pressure can have some result. Facebook’s public standing took a major hit in the wake of the Cambridge Analytica scandal, leading to Mark Zuckerberg being grilled in some very public congressional hearings. Policymakers could easily tap into this increasing public scrutiny and garner support for stiffer regulations on big tech. But that leads to the next question: Will those regulations be effective? That’s another story.
Should the federal government decide to regulate Amazon and other tech companies like Google, we can probably expect it will screw up its first few attempts. That’s not pessimism, it’s just what usually happens. Business and technology advance quickly, usually much faster than the government can keep up. Elected officials tend to be from older generations and have trouble grasping exactly what’s happening. In US history at least, we see lots of regulation attempts that were well-intentioned, but entirely ineffective or even harmful. In the late 19th Century, for instance, policymakers largely agreed that America’s new robber barons and their mega-corporations required some sort of oversight, but they had little idea of what to do. One result was the Sherman Antitrust Act of 1890, a piece of legislation that was so rushed and poorly-written that it was actually used against labor unions for over a decade before Theodore Roosevelt first used it against a corporation in 1902.
We can see the same trends now. The current 115th Congress is one of the oldest in history, with an average age of 57.8 in the House and 61.8 in the Senate (though the incoming class has brought that average down a bit after the 2018 midterms). And that’s just the average. Some of the most influential members are much older, well into their 80s. I don’t inherently aim to discriminate against my elders, but have you ever tried explaining technology to your grandpa? That’s the equivalent of trying to fill in many of our policymakers on the intricacies of big tech. Let’s remember that Mark Zuckerberg had to explain to Sen. Orrin Hatch (85) that Facebook brings in revenue by selling ads. If our most powerful leaders are unaware of these extremely basic facts on how internet businesses operate, I don’t have much hope that they can agree upon an effective regulation strategy on their first try (or second, or third). They’ll probably get it right eventually – but then there’s no saying how long that will last before business changes yet again, making existing regulations obsolete. And so the cycle continues.
So while it’s definitely possible – probable, even – that we’ll soon see some new regulations on the tech industry, policymakers will have to do their homework to avoid regulations that are ineffective, counterproductive, or even harmful. We may well be in for a few years of false starts as regulators try and fill themselves in on the intricacies of tech regulation.