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Regulating digital industries might require a new U.S. agency

U.S. senators and industry experts are pushing for a new agency to regulate digital industries and tackle competition, privacy and content moderation concerns.

Regulating digital industries, including online search, electronic commerce and social media, will require a new federal agency specially designed to focus on those platforms.

That's according to the Brookings Institution's Mark MacCarthy, who recently published the book Regulating Digital Industries, which explores the idea of setting up a new agency to govern companies such as Amazon, Meta and Google. MacCarthy, a nonresident senior fellow in governance studies at the Center for Technology Innovation, spoke about a new agency for digital industries on a panel hosted by Brookings.

MacCarthy argued that a specialized regulatory agency focused on digital platforms would function similarly to the Federal Communications Commission, which focuses specifically on cable, broadcast, satellite and internet. MacCarthy isn't alone in his support of a new agency for digital industries. Sens. Elizabeth Warren (D-Mass.) and Lindsey Graham (R-S.C.) in July 2023 introduced the Bipartisan Digital Consumer Protection Commission Act, which would create a new commission to regulate online platforms.

During the Brookings panel discussion, some panelists, including former Federal Trade Commission Chair Jon Leibowitz, argued that the FTC should remain in charge of policing digital industries. While MacCarthy agreed that the FTC is a good starting place, he believes the federal government will eventually go further.

"I'm happy to start with the FTC, but I think over time it will become clear that the FTC can't be both a general-purpose regulator for antitrust and consumer protection that goes across the entire economy and also a sector-specific agency focused on electronic commerce, search and social media," MacCarthy said. "They can't do both."

Keeping new agency focused on digital industries

A new agency should be narrowly focused on digital platforms with competition, privacy and content moderation issues -- recurring concerns with today's digital industries that MacCarthy believes should be tackled together rather than separately.

MacCarthy said those issues often go hand in hand for digital platforms and "you can't do one without thinking about the other issues at the same time."

When passing laws to regulate competition, privacy and disinformation, "you have to set up a regulator who can handle all three of those issues at the same time," he said.

Christopher Lewis, president and CEO of tech policy group Public Knowledge and one of the panelists, agreed with MacCarthy that the U.S. needs a new agency that "understands the interconnectedness of those different harms." He said that even if Congress advanced something like a federal data privacy law, it would only tackle one of the issues facing digital platforms.

"We can't last much longer with the situation we have where privacy, content moderation, competition and other values are left hanging," Lewis said during the panel. "We may get one, but we will not have healthy information systems, a healthy internet and platforms that we want unless we get all of them. We have to push for a regulator that can do those things."

Setting up a new digital industries agency

Congress is already leaning toward one agency overseeing digital platforms, as tasks such as boosting competition among digital platforms, establishing privacy rules and implementing transparency requirements for social media are being turned over to the FTC.

You need that structural solution to a structural problem.
Harleen GambhirCounsel, Office of Sen. Elizabeth Warren

MacCarthy said a new agency, rather than the FTC, should receive oversight responsibilities. He argued that the FTC, a law enforcement agency, is not a regulator, and its focus is not specific to digital platforms but encompasses all industries.

"The U.S. Congress is moving toward thinking of the FTC as a single unified digital regulator," MacCarthy said. "I think the almost accidental approach the U.S. is taking is the right way to go. You put those responsibilities in the same agency."

Harleen Gambhir, counsel for the Office of Sen. Warren and a panelist, agreed with MacCarthy that a digital regulator is needed.

"You need that structural solution to a structural problem," she said.

Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget Editorial, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.

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