For big tech regulation, one-size-fits-all won't work
Economist Carl Shapiro said to get big tech regulation right, Congress can't lump Google, Apple, Amazon and Facebook into the same category.
When it comes to big tech regulation, not all problems can be solved with legislation that lumps Google, Apple, Amazon and Facebook together. From a regulatory standpoint, these firms are vastly different from one another.
That's the view of Carl Shapiro, an economics professor at the University of California, Berkeley, who is urging Congress to focus on the issues facing these companies separately rather than try to regulate them through broad bills.
Shapiro, outlining his concerns during a recent Bipartisan Policy Center webinar, said most of the problems facing big tech today are not "fundamentally competition problems." Instead, they cover a range of issues such as content moderation and privacy and need to be handled separately.
Shapiro has concerns with proposed legislation such as the American Innovation and Choice Online Act introduced by Sen. Amy Klobuchar, D-Minn., and Sen. Chuck Grassley, R-Iowa. The bill seeks to keep companies like Amazon and Apple, which operate online platforms and simultaneously sell products on those platforms alongside competing products, from preferring their own products over competitors'.
If the bill passed and a platform like Apple with a product like Apple Music wanted to improve its product in a way that would threaten competing businesses on the platform, such as Spotify or Pandora, the company would have to treat those competitors equally. This could hinder product improvement, Shapiro argued.
"It sounds sort of good, but in an innovative world and with how products get improved, how does it work?" he said. "It's very tricky, and I'm concerned it would cause a lot of damage if not done well."
Shapiro said the source of this legislative problem is clear: Lawmakers are thinking too broadly.
"It's very common to lump together the big four, Apple, Amazon, Facebook and Google," he said. "You can worry about YouTube, Twitter, any social media platform with content moderation, but that's completely different than what's going on with Amazon and Google. If you lump them together, you're going to get the wrong solution because it's different problems."
For issues like content moderation, modifying Section 230 of the Communications Decency Act to create liability for online platforms would be a good start, he said. Section 230 shields platforms like Facebook and YouTube from liability for third-party content shared on their platforms.
Carl ShapiroProfessor of economics, University of California, Berkeley
Privacy on online platforms could be addressed with regulations empowering enforcement agencies like the Federal Trade Commission (FTC) to establish tougher rules to protect consumer privacy, Shapiro said.
If the problem is an anticompetitive practice like exclusive dealing or mergers, Shapiro said antitrust problems can be dealt with by enforcement agencies like the FTC. If the concern is that antitrust law is too weak, Congress could consider tightening antitrust law to make it easier for the federal government to stop a dominant firm from buying a potential competitor, he said.
The problem facing big tech regulation efforts today is often a lack of technical expertise within Congress that leads to legislation that might cause more harm than good, Shapiro said.
When it comes to crafting legislation for these kinds of problems, lawmakers can establish an expert organization within an enforcement agency like the FTC to provide guidance to Congress. He pointed to the U.K.'s Competition and Markets Authority as an example.
"It's a regulatory authority but with a lot of expertise," he said.
Also this week
- The FTC is now requiring businesses to seek acquisition approval before moving forward with deals. On Monday, the FTC issued the Prior Approval Policy Statement after it voted earlier this year to reinstate prior approval requirements. "Restoring the long-standing prior approval policy forces acquisitive firms to think twice before going on a buying binge because the FTC can simply say no," Holly Vedova, director of the Bureau of Competition, said in a news release.
- During its annual Facebook Connect conference, Facebook CEO Mark Zuckerberg announced that the company would be rebranded as Meta. Although the social media platform Facebook will retain its name, the new company brand Meta reflects Zuckerberg's interest in the so-called metaverse, and the company's directional focus on connecting digital environments.
Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.