Jul 24, 2021 7:00 AM

Biden Has to Play Hardball With Internet Platforms

The president needs to prioritize Americans' wellbeing over Big Tech's whims to begin a path to restoring democracy, privacy, and competition.

The federal government’s campaign to reform internet platforms dramatically escalated this week. The Surgeon General cited disinformation as a public health menace. The White House press secretary called on Facebook to remove 12 accounts that may be responsible for as much as 65 percent of the Covid disinformation on the site. In reference to Facebook, President Joe Biden said, “They’re killing people,” only to walk that back a day later. Then he appointed Jonathan Kanter, architect of the EU’s antitrust case against Google, to run the Justice Department’s Antitrust Division. The table may finally be set for necessary reform.

Facebook, Youtube, Instagram, and Twitter have become core communications platforms in our society, but they are collectively undermining public health, democracy, privacy, and competition, with disastrous consequences. Most Americans understand this, but don’t want to be inconvenienced by losing what they like about internet platforms. And they struggle to understand the problem’s scope. The platforms have successfully muddied the waters, using their massive wealth to co-opt huge swaths of academia, think tanks, and NGOs, as well as many politicians.

It’s easy to see why platforms fight so hard to resist reform. Covid disinformation, subversion of democracy, invasions of privacy, and anticompetitive behavior are not bugs. They are examples of the business models of internet platforms working exactly as designed. The problem is that platforms like Google and Facebook are too big to be safe.

At their current scale, with roughly twice as many active users as there are people in China, platforms like Google and Facebook are a systemic threat analogous to climate change or the pandemic. Fixing them would be a challenge under the best of circumstances. But today, the courts defer to economic power and Congress remains paralyzed, leaving the administration as our best hope. Forty years of deregulation and reduced funding have left our regulatory infrastructure with few tools and little muscle tone. Fortunately, the appointments of former FTC advisor Tim Wu to the National Economic Council, antitrust scholar Lina Khan as chair of the FTC, FTC commissioner Rohit Chopra to lead the Consumer Finance Protection Bureau, former Commodity Futures Trading Commission head Gary Gensler at the SEC, and Kanter are brilliant moves because those leaders understand the issues and will make the most of the limited tools at their disposal. The payoff from getting this right will be huge.

The first challenge facing the president and his team is to frame the problem properly. The tendency of policymakers to date has been to view the harms from internet platforms not as systemic, but as a series of coincident issues. With limited tools and time, the administration must look for high-leverage opportunities.

Internet platforms are media companies, dependent on consumer attention, but they have huge advantages over traditional media. They have unprecedented scale and influence. They are surveillance engines that gather data about users. They supplement that by acquiring location data from cell phones; health data from prescriptions, medical tests, and apps; web browsing history and the like. With all this, platforms create data voodoo dolls that enable them to both make predictions of user behavior that can be sold to advertisers and power manipulative recommendation engines. Platforms could use this power to make users happier, healthier, or more successful, but instead they use data to exploit the emotional triggers of each user because it’s easier to do and generates more revenue and profit.

The past five years have proven that internet platforms cannot be persuaded to reform themselves. They don’t believe they’re responsible for the harms caused by their products. They believe these harms are a reasonable cost of their success. That is why Facebook did nothing meaningful after learning it had been used to interfere in Brexit and the 2016 presidential election. Why the company shrugged after the ethnic cleansing of the Rohingya in Myanmar and the livestreamed terrorist attack in Christchurch. Why it ignored warnings about radicalizing users into QAnon and being used to organize and execute the insurrection. And why Mark Zuckerberg and his team pretend not to be responsible for spreading Covid disinformation. Since 2016, politicians, civil society groups, and activists like me have been trying to persuade Facebook to alter its business practices for the public good and the executives have consistently chosen company over country.

The second key challenge is that there is no way to fix what’s wrong with internet platforms without reducing their profits. President Biden must choose between the happiness of those who own the platforms and the safety and wellbeing of everyone else.

Facebook, Instagram, and YouTube turbocharge their profits by using algorithms to amplify and recommend emotionally engaging content. Content that triggers fear and outrage is particularly valuable, especially disinformation, hate speech, and conspiracy theories. The platforms’ profits depend in part on giving disproportionate weight to society’s most radical viewpoints. With billions of users, harm is inevitable. The companies know this and do everything in their power to protect the business model. To paraphrase The Atlantic’s Adam Serwer, extremism is the point.

There is no silver bullet. Despite Biden’s appointments of major tech reformers, he has a steep hill to climb. Reform will ultimately require legislation and legal action in three arenas: consumer safety, privacy, and antitrust. Biden needs a plan that addresses all three, and must buy time to execute it.

For one, there needs to be legislation to require that all technology companies anticipate and mitigate harms prior to shipping a product. This would require an amendment to Section 230 of the Communications Decency Act, which gives internet platforms legal protection from responsibility for harms and crimes committed by others using their technology, even when the platform encourages such behavior. Imposing liability and placing limits on recommendation engines and algorithmic amplification for attention are the minimum requirements to protect consumer safety. A promising bill was introduced in the last Congress by representatives Anna Eshoo and Tom Malinowski and an updated version will soon be reintroduced with a larger list of sponsors. But an appropriate consumer protection law may take years.

The US has no national law to protect consumer privacy. As a result, nearly every major corporation has embraced some form of surveillance capitalism, converting human experience into data for the purpose of predicting and manipulating human behavior. For marketers, data is like a drug, providing an illusion of precision that has never been available before. For consumers, surveillance capitalism leads to a loss of autonomy. A functioning democracy would side with its citizens, eliminating third party use of sensitive data, such as location, health, and browser history, while forcing corporations to ask permission every time they want to use other personal data. Europe’s GDPR and the various state laws do not come close to the minimum required to protect consumers. With its new iOS 14.5 operating system, Apple became the first entity—government or corporate—to take meaningful action that actually protects consumers. As with consumer protection, privacy laws are just beginning their Congressional journey. Biden needs a different way to buy time.

Antitrust is the only regulatory vector that offers the prospect of quick results. Opposition to royal monopolies was one of the drivers of the American Revolution. When the Industrial Revolution ushered in a new era of concentrated economic power, the country fought monopolies again for nearly a century, until Robert Bork began emasculating antitrust laws in the 1970s. Since then, the economically powerful have enjoyed almost complete freedom. Even when they were fully enforced, existing antitrust laws never contemplated the kind of economic power deployed by internet platforms, something made obvious by the opinion of a federal judge who threw out antitrust cases against Facebook filed by the FTC and state attorneys general.

Fortunately, Biden and his new appointees can still play hardball with existing antitrust laws. The game-changing opportunity would be for the Department of Justice to join or take over the (apparently strong) price fixing case against Google and Facebook filed by the attorney general of Texas. As it happens, the penalty for price fixing typically includes prison time for executives. A federal prosecution with felony indictments would likely change those executives’ incentives.

Similarly, Biden might also direct the Securities and Exchange Commission to investigate Facebook, and potentially others, for potential revenue recognition fraud. Facebook has been accused of overstating user counts and has admitted to overstating ad views. While advertisers have chosen not to pursue a legal case, the SEC should determine whether the harm to shareholders justifies a fraud case. In addition, the advertising markets created by Google, Facebook, and others, which have roots in Wall Street’s high-frequency trading, should be subject to regulation by the Commodity Futures Trading Commission, which would open them up to scrutiny and possibly limit anticompetitive behavior.

If President Biden forces internet platforms to stop amplifying and recommending disinformation, he will go a long way toward his top priority of ending the Covid pandemic. He has the right team for the job. If he lets that team play hardball, it will also help restore democracy, privacy, and competition.

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