No Longer Enamored, Washington Looks Critically at Silicon Valley
December 27, 2019
The era of Silicon Valley operating largely free from government
regulation may be coming to an end.
In 2019, lawmakers grilled tech executives at multiple hearings in
Washington and federal regulators slapped record fines on tech firms.
They promise action in the coming year on a host of issues: competition,
online privacy, encryption and bias.
U.S. tech companies such as Apple, Facebook, Google and Amazon are
girding themselves for more federal scrutiny.
“As the internet companies matured without a lot of regulation, some
issues have emerged where attention is needed,” said Rep. Zoe Lofgren, a
Democrat representing Silicon Valley since 1994 and who has introduced a
national online privacy bill.
“I think it’s fair enough to examine what kind of rules should be set in
certain elements of the tech economy,” she said.
For years, Washington was enamored with the technology industry and its
iconic companies that fueled economic growth. They created new tools for
campaigning and reaching voters, and enjoyed an aura of cool.
Online privacy and user data
Now, there are threats of fines over things such as violating users’
privacy or stifling competition.
In 2019, the Federal Trade Commission issued a record $5 billion fine
against Facebook for “deceiving users about their ability to control the
privacy of their personal information.” It also issued a $170 million
fine against Google for violating children’s privacy on YouTube, which
New laws, such as the one Lofgren proposes, could give American users
more control over their online data and limit companies’ ability to
collect user data. Those moves could limit companies’ ability to sell
advertising, which funds the free internet.
Antitrust and competition
Both Democrats and Republicans criticize “Big Tech,” as it is now
called. And in the coming year, the pressure will likely increase.
“Whenever the word ‘Big’ is placed before your industry, it’s not a good
thing,” said Carl Guardino, president and chief executive of the Silicon
Valley Leadership Group, which represents many of the region’s tech
firms. “It’s now ‘Big Tech,’ and you know it’s not used as a term of
Foreign users of American tech products could also see changes if
Washington follows through on threats to break up large companies like
Facebook. Presidential candidate Elizabeth Warren is reportedly drafting
a bill to toughen the country’s rules about antitrust and competition.
The Federal Trade Commission is reportedly looking into stopping
Facebook’s further integration of Whatsapp and Instagram, in case it
would one day see a need to break up the social network giant.
Washington seems to have woken up to the dangers of technology companies
that have become the gatekeepers of communications and commerce, said
Sally Hubbard, the director of enforcement strategy at the Open Markets
Institute, a research group that focuses on antitrust issues.
traction has definitely really intensified over the last year,” she
said. “There’s also just a growing awareness that these companies are
causing a wide range of harms, whether it’s harms to our democracy,
harms to innovation, harms to entrepreneurship. They are playing the
game and controlling it, too.”
China and 5G infrastructure
Meanwhile, there is growing concern over China’s expanding role in
advanced global communications and whether the authoritarian country can
be entrusted with user data. The U.S. government has warned other
countries not to work with the Chinese telecommunications giant Huawei,
which sells equipment that is building the new 5G networks around the
Much is at stake. With more than a majority of the Earth’s 7 billion
people online, Washington’s rules for the U.S. technology industry and
its global competitors could determine the future of communication.