As Tech Industry's Influence and Power Grow, So Does Political Scrutiny
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Twitter's decision to permanently suspend Donald Trump's account after the violent insurrection at the Capitol Jan. 6 was the culmination of an escalating debate among politicians and the general public about how much was too much when it came to the former president's tweets about election integrity and myriad other issues.
It pretty much fell along expected partisan lines: those on the left saw the banning by Twitter – and similar moves by Facebook and YouTube – as long overdue, while conservatives railed about the First Amendment, bias, censorship and "cancel culture."
There also was debate about Section 230, which protects social media from liability for contents users publish on those platforms. Both sides agree that Section 230, which was implemented in 1996 as part of the Communications Decency Act, needs to be updated, though the split comes when talking about how and why. Sen. Mark Warner, D-Va., earlier this month introduced legislation aimed at amending the law.
Tech's influence grows
Trump's ban from Twitter – which will remain even if he runs for office again and wins, Twitter CFO Ned Segal told CNBC Feb. 10 – is a high-profile example of the growing number of places that the ever-expanding tech industry and politics intersect. To be sure, clashes between politics and tech isn’t new: note the government's antitrust lawsuit against Microsoft in the late 1990s.
But that came at a time when technology, like PCs and the internet, were still tools people used in large part to get work done, and the bulk of technology was found in the back offices and data centers of big business. Two decades later, technology is omnipresent throughout society, from communications and entertainment to business and commerce. Given that, it's not surprising that technology is increasingly bumping up against politics and government.
"For the longest time, people did see tech as a separate thing and it's only now starting to hit people that it's part of almost everything and it's going to continue to be a part of everything," Bob O’Donnell, principal analyst with TECHnalysis Research, told Internet News. "It's kind of seeped in in a way that people didn't really understand. Now they're starting to understand and they're trying to figure out how to make sense of it."
Facebook initially was this cool way of enabling people to keep in touch with people in their lives, but it also is now a significant source of their news and information. Google is now much more than search and Amazon has grown far beyond simply e-commerce.
The COVID-19 pandemic has also brought to light how powerful these companies are. That can be seen in the enormous growth during 2020 in such sectors as remote collaboration. The global unified communications-as-a-service (UCaaS) market in the third quarter grew 30 percent year-over-year, according to Synergy Research Group, with offerings like Zoom and Microsoft Teams seeing tremendous growth, while the migration to cloud services accelerated. In a year when spending on on-premises data center infrastructure slowed, the cloud infrastructure space saw $37 billion of spending in the fourth quarter, a 35 percent jump driven by the likes of Amazon Web Services (AWS), Microsoft Azure and Google Cloud.
The tech industry has become a significant part of the economy, O'Donnell said. Tech based-companies "are going to start employing a larger percentage of the overall workplace and generating a larger percentage of overall GDP. That's not new, but it's slowly but surely growing, and I think over time that's going to become an issue," he said.
The relationship between government and tech will likely become more antagonistic as the former looks for ways to rein in the power and influence of the latter, the analyst said. And in a time of heightened partisanship in Washington, the need to address tech industry power and influence is a concern for both Democrats and Republicans, even if the problems or ideal solutions for both parties may not always match.
Partisan agreement: Tech is powerful
"Oddly, one of the few things both sides seem to agree on is that tech companies are getting a little bit too big and too powerful," O’Donnell said. “The different political parties are pushing it for different reasons, but at the end of the day, they're kind of coming together on the fact that they think there are some concerns there. I would not be surprised to see some regulation or something start to occur."
There are some areas ripe for attention, such as antitrust, given the size, influence and wealth of such companies as Amazon, Google and Facebook. He also expects scrutiny in such areas as search, privacy and security, with a lot of attention falling on the social media platforms.
Once the Biden Administration gets past the immediate challenges and issues facing it, from the pandemic and resulting economic turmoil to the current Trump impeachment hearings, some attention will be turned to the tech industry.
A fast-moving target
However, one of the challenges in the tech-government relationship has been the dichotomy in how the two sides operate, which isn't new but becomes more of an issue as the influence of technology grows. The tech industry is a fast-moving field leveraging a broad array of emerging technologies, from cloud to artificial intelligence (AI), fueling the rapid innovations that are driving an ever-evolving communications and business environment. By contrast, Congress by its nature is more slow-moving and contemplative.
"Political regulation happens at a snail's pace and the tech industry moves so quickly that by the time you try and regulate something, it's changed altogether," O’Donnell said. “It makes it harder clearly to come up with valid regulations and it encourages people to say, 'Oh, well, there's no point because you'll never be able to keep up.' It creates this sense of – I don't want to say despondency, but a sense of hopelessness. … Yet it has to be addressed. You have to fight back a little bit in terms of figuring that out and say, 'Hey, despite how hard it is, we need to make some of this happen.'"
State action looms
Not everyone is waiting for action at the Congressional level. State legislatures are continuing to push regulations aimed at the tech industry. The California Consumer Privacy Act was passed in 2018 and a similar bill in Virginia is being lined up. In addition, other states like Maryland, North Dakota, Florida and Nebraska are considering laws that would touch on everything from taxes on digital advertising to privacy, broadband, facial recognition and cybersecurity.
Chip industry seeks help
That said, the relationship between government and tech is not entirely antagonistic. The Semiconductor Industry Association sent a letter to President Biden Feb. 11 asking that funding be included in economic recovery and infrastructure bills that would go to chip manufacturing and research, noting that "semiconductors are critical to the U.S. economy, American technology leadership, and our national security." The letter was signed by executives from almost two dozen companies, including Intel, IBM, AMD, Qualcomm, Nvidia and Xilinx.
The same day, White House Press Secretary Jen Psaki told journalists that the Biden administration is working with vendors, manufacturers and trading partners to address a global semiconductor shortage that has impacted a range of industries, according to Bloomberg, and The Washington Post reported on a Biden Administration plan to prevent China from becoming dominant in technology.
O'Donnell said that on a radio show he hosted years ago, an ongoing joke was that the only politics on the show was Mac vs. PC.
“There weren't a lot of political issues to worry about, but the level of influence that tech has on society and the overall economy in general has become so huge that you can't help but deal with it," he said. "It's just going to lead to some challenges, it's going to lead to some educational efforts that have to happen, it's going to lead to a number of different things that are going to be important but are going to be difficult to navigate, which is going to make it kind of cumbersome and awkward for a while."