Sunday, September 25, 2022

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    Biden’s executive order could spell trouble for big tech – and adland, by extension

    Today, President Biden will reportedly sign an executive order outlining new guidelines for federal agencies to come down on tech companies whose growth and competitive advantage relies on the collection, storage and use of large quantities of consumers’ personal information. The move comes amid a scad of action in both the private and public sectors to both limit corporate power and introduce more comprehensive consumer data privacy protections. 

    President Biden is today expected to sign an executive order that aims to help limit the outsized competitive advantage of major tech companies and crack down on their use of consumers’ personal information. The administration has said that the market dominance of top players puts small businesses and laborers at an unfair disadvantage, and that the exponential growth of the Googles, Apples and Facebooks of the world can in some part be attributed to their use of consumer data, especially for advertising purposes. 

    The executive order will incentivize federal agencies to be more scrupulous in their assessments and approvals of mergers and acquisitions in big tech. If Facebook or Google snaps up an emerging competitor, the argument goes, competition in the market is stifled and big tech companies inch closer and closer toward a monopoly-like state. It could also help consumers, argue some experts. “Support for agencies like the FTC to vet and consider consequences of additional mergers will...allow for more consumer protection and transparency from companies that have historically had one-sided relationships funding their expansion,” says Paul Roberts, founder of ad fraud protection company Kubient.

    The order will also urge the Federal Communications Commission (FCC) to reinstate ’net neutrality’ regulations that disallow internet providers from slowing service delivery or monetizing faster, more open access to the internet. And critically, the order will encourage the Federal Trade Commission (FTC) to establish detailed regulations concerning tech companies’ use of consumer data. The decision is part of a larger initiative by the Biden administration to limit corporate power. 

    “President Biden’s executive order is a welcome indication that the administration recognizes the urgent need to safeguard consumer privacy to protect civil liberties and to address growing power asymmetries in our society and economy,” says Polly Sanderson, policy counsel at the Future of Privacy Forum, a Washington DC-based think tank focused on bipartisan privacy initiatives. 

    The role of legislation v private sector decision-making

    Sanderson notes that while the FTC is already considering rulemaking, Congress is better-positioned to pass regulations that will stick. “I hope that today’s executive order will invigorate lawmakers to finally act on this fundamental issue,” she says. “Industry would be wise to prepare for new rules, whether they come from Congress, the FTC or the states.”

    Indeed, the executive order comes amid a flurry of recent advances for consumer privacy rights: last month, Colorado became the third state to pass a comprehensive data privacy bill, while stagnation on Capitol Hill has prompted tech players Google and Apple to introduce their own data privacy policies – the most recent of which were announced in anticipation of the rollout of iOS 15. However, critics point to the fact that Google and Apple already operate so-called ’walled gardens’ – since they exert arguably unmatched control over the consumer data ecosystem – and should therefore not be the ones making the rules for how consumer data is handled.

    The order is Biden’s latest move to limit the power of big tech companies. Late last month he appointed antitrust legal scholar Lina Khan to head up the FTC – a decision that clearly signifies his interest in taking a strong stance against tech’s dominating forces. The move followed Biden’s decision in March to appoint Tim Wu, who has spoken candidly about his support of breaking up tech conglomerates, to the National Economic Council. In the meantime, the House is navigating heated debates over proposed antitrust regulations designed to target big tech.

    Since the executive branch’s powers are limited, today’s executive order seeks to incentivize agencies such as the FTC and the FCC – which are tasked with enforcing laws concerning communications and antitrust issues – to take a hard stance against oversteps by the likes of Apple, Google and Facebook. The move could potentially help even the playing field for smaller companies and increase market competition. 

    “The idea that companies like Google and Facebook have and continue to use anti-competitive tactics to maintain their respective dominance in areas like search and advertising is well established at this point,” says Kamyl Bazbaz, vice-president of communications at privacy-centric search engine DuckDuckGo. “While Google’s anti-competitive practices hurt companies like us, the negative impact on society and democracy wrought by their surveillance business model is far worse. Marketers and advertisers have often little choice to work with companies other than Google and Facebook, so efforts like this to encourage competition can lead to better products and services that the community has been asking for.”

    It remains to be seen how the executive order will influence the enforcement of such laws – and whether or not Congress will pass new antitrust or data privacy legislation in the coming months.

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