Homes’ GOP turnover would change the direction of U.S. regulation on big tech

With the midterm elections approaching, time is running out to advance pending tech regulation bills before a new Congress sets new priorities.
Source: Pexel

US lawmakers are running out of time to pass several pending bills related to harnessing the power of Big Tech before the focus shifts to this year’s midterm election campaign.

Seats in both houses of Congress are up for grabs, and political analysts say Republicans have a strong chance of taking control of the US House of Representatives in the Nov. 8 midterm elections. If that happens, the new House leadership should set a different tone on tech regulation, with Republicans likely to resurface concerns about platform censorship over antitrust regulations, political experts said.

Historically, the party in charge of the White House loses seats in Congress mid-term.

“It’s not like Republicans are going to say ‘Big Tech is our friend,'” said Rodell Mollineau, co-founder and partner of Rokk Solutions, a Washington, DC-based, bipartisan public affairs and strategic communications firm. They will come to it from ‘These big corporations are crushing the voices of half the American population because of their…woke positions.'”

Legislation in limbo

Two antitrust bills face a rocky climb if they don’t pass this session of Congress and the GOP takes control of the House.

The American Innovation and Choice Online Act, presented last year by Sens. Amy Klobuchar, D-Minn., and Chuck Grassley, R-Iowa, seeks to ban Big Tech companies from promoting their own private label products and services over those of their competitors, a practice known as self-preference. For example, the bill would prevent Inc. from promoting its Amazon Basics products over similar products from third-party sellers.

Proponents of the bill say it would spur competition; opponents believe it would undermine consumer choice. The bill has yet to be voted on by the Senate, and members of Congress are increasingly focused on issues such as inflation and abortion.

Klobuchar, who is leading the charge on the bill, has not returned S&P Global Market Intelligence’s inquiries about the timing of a possible vote on the bill.

“If it doesn’t get over the hurdle this year, I find it hard to believe the next Congress is going to make it easier with Republicans in charge of the House,” Mollineau said. “A divided government tends to favor the status quo.”

Some Democrats have had reservations about the wording of the bill. Meaning. Tammy Baldwin, D-Wis.; Ben Ray Luján, DN.M. ; Brian Schatz, D-Hawaii; and Ron Wyden, D-Ore., wrote a letter to Klobuchar in June, raising concerns about the impact the bill might have on content moderation policies. Democratic senators suggested they would support the bill if it included a section clarifying that the legislation would not prevent a platform from moderating content such as hate speech.

The Open App Markets Act, whose co-sponsors include Klobuchar and Marsha Blackburn, R-Tenn., could also be in jeopardy if not passed soon. Drafted in tandem with the U.S. Online Choice and Innovation Act, the bill would prevent companies such as Apple Inc. and Alphabet Inc.’s Google LLC from requiring developers to use their online payment systems. ‘apps.

Epic Games Inc. sued Apple and Google in 2020 for allegedly abusing their market power after the tech companies pulled Epic’s Fortnite game from their app stores when the developer implemented its own system integrated payment.

Although Apple partially won the lawsuit against him, the court sided with Epic in forcing Apple to allow developers to offer other payment methods in addition to Apple’s own system.

Failure of any tech-related antitrust bill would mean companies can focus on growth and enjoy “one less immediate threat from Congress,” said Carl Szabo, vice president and general counsel at NetChoice. , a trade association whose members include Amazon and Meta Platforms. Inc.

Amazon, Meta, Apple and Google did not respond to requests for comment on the U.S. regulatory outlook.

READ MORE on the impact of the US midterms on our sectors in this issue in brief.

Changing focus

It’s possible the pending tech bills could progress into a single, voted-for package by the end of the year, said Alex Petros, policy adviser for Public Knowledge, a nonprofit public interest group in Washington. , DC.

But the proposals could be rebuffed by Republicans such as Rep. Jim Jordan, R-Ohio, who is running for re-election this year, and House Minority Leader Kevin McCarthy, R-Calif., who is running to become chairman of the House if the Republicans regain control of the majority of this House. Representatives from the offices of Jordan and McCarthy did not respond to inquiries from S&P Global Market Intelligence regarding lawmakers’ technology regulatory priorities.

Both lawmakers are “not fans of these bills,” Petros said. “There’s a feeling that if the Republicans take control of the House, that’s going to be quite an obstacle to getting these bills on the floor of the House.”

Jordan has repeatedly expressed concern about Big Tech platforms’ treatment of conservative views in content moderation. The legislature has sponsored a bill called the “Protect Speech Act” that would change the liability protections provided to online platforms regarding content moderation. The bill has made no progress since it was introduced in June last year.

Most recently, Jordan, along with Rep. Cathy McMorris Rodgers, R-Wash., and Rep. James Comer, R-Ky, introduced the “Protecting Speech from Government Interference Act” in August, which would ban President Joe Biden’s administration from promoting speech censorship or pressuring social media companies to censor speech.

If the House majority changes in the midterm elections, Jordan is potentially on track to succeed Rep. Jerrold Nadler, DN.Y., as chairman of the House Judiciary Committee, which would increase Jordan’s ability to advance or block bills.

Voters’ sentiment

As the midterm elections approach, American voters worry about day-to-day issues like inflation and the economy.

According to 451 Research’s “Voice of the Customer: Macroeconomic Outlook, Consumer Spending (Population Representative), Cost of Living 2022” survey conducted in July, 59.2% of respondents said inflation in the United States was the biggest threat to their personal finances, while 34.7% cited energy prices and 17.8% pointed to rising interest rates. Only 3.6% of respondents said financial regulation was a threat.

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Republican election candidates focus on public dissatisfaction with these kinds of issues, while Democrats try to capture public reaction to the Supreme Court’s recent decision to overturn Roe v. Wade. which created a federal right to abortion. .

As attention shifts to other priorities, it gives tech companies cover “as these more political and partisan fights unfold,” Mollineau said.

451 Research is part of S&P Global Market Intelligence.

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