WEBVTT - Tech Giants Face Wide Array of Legal Challenges (Audio) 0:00:00.080 --> 0:00:02.120 The US tech giants are going to be spending a 0:00:02.120 --> 0:00:04.600 lot more time in court next year, and not just 0:00:04.800 --> 0:00:07.760 on one front, but on several. For years, the country's 0:00:07.800 --> 0:00:12.840 biggest technology companies, Apple, Google, Facebook, Microsoft and Amazon seemed 0:00:12.880 --> 0:00:15.760 to occupy some kind of privileged position in this country, 0:00:15.800 --> 0:00:19.520 with no serious regulations touching them. But it's apparent that 0:00:19.600 --> 0:00:23.439 things are changing. Take the multiple congressional hearings last week 0:00:23.480 --> 0:00:27.920 over Russian meddling in last year's presidential campaign. Facebook, Google, 0:00:27.960 --> 0:00:31.360 and Twitter were unaccustomed to the tough questions and even 0:00:31.360 --> 0:00:35.040 sarcastic comments. Senator Richard Burr is chair of the Senate 0:00:35.040 --> 0:00:40.120 Intelligence Committee. This kind of national security vulnerability represents on 0:00:40.320 --> 0:00:44.879 unacceptable risk, and your companies have a responsibility to reduce 0:00:45.280 --> 0:00:49.720 that vulnerability. Our guests are Garrett E. Vank, Bloomberg News 0:00:49.760 --> 0:00:53.000 Tech policy reporter, and Eric Goldman, co director of the 0:00:53.040 --> 0:00:57.800 High Tech Law Institute at Santa Clara University School of Law. Garrett, 0:00:57.800 --> 0:01:00.480 in your article in this week's Bloomberg Big this week, 0:01:00.520 --> 0:01:03.760 you look at ten different areas where tech companies will 0:01:03.800 --> 0:01:09.039 face challenges in whether in court cases or legislation. They 0:01:09.120 --> 0:01:14.040 are not They're done alphabetically rather than in terms of important. 0:01:14.120 --> 0:01:17.960 So what is the top threat to them in your estimation? Well, 0:01:18.000 --> 0:01:20.240 I think in terms of top threat, I mean, it's 0:01:20.280 --> 0:01:22.199 interesting to see what's been going on in the US 0:01:22.240 --> 0:01:24.399 because of course we've talked about regulation of big tech 0:01:24.440 --> 0:01:26.640 companies for years in other countries, a little bit here 0:01:26.640 --> 0:01:28.680 in the US, but this year it really started to 0:01:28.720 --> 0:01:32.440 pick up steam steam. You even had people talking about antitrust, 0:01:32.520 --> 0:01:34.520 you know, concerns that Google was too big in the 0:01:34.560 --> 0:01:36.840 advertising business, that Amazon was too big in the e 0:01:36.920 --> 0:01:40.160 commerce business. So we'll have to see, you know, it 0:01:40.200 --> 0:01:42.840 definitely looks like that kind of noise, those kind of 0:01:42.840 --> 0:01:45.959 discussions happening at the political level have definitely been increasing 0:01:46.000 --> 0:01:49.000 over the year and is a year that we'll see 0:01:49.040 --> 0:01:51.520 whether or not real regulation comes down and what kind 0:01:51.560 --> 0:01:55.120 of effect that has in the companies eric, To what 0:01:55.280 --> 0:01:58.320 degree do the fact that they're facing more legal challenges 0:01:58.360 --> 0:02:01.920 in the United States, how much does it reflected you know, 0:02:01.960 --> 0:02:04.120 these big internet companies have kind of moved from being 0:02:04.160 --> 0:02:09.200 seen as innovators and convenience for consumers to threats to 0:02:09.240 --> 0:02:12.600 the way we like to live or to privacy. What 0:02:12.720 --> 0:02:15.480 way to think about is that, um, the government has 0:02:15.520 --> 0:02:18.840 gotten nervous about the consolidated power at the tech giants, 0:02:19.000 --> 0:02:22.400 and the government's used to having uh, the most power 0:02:22.400 --> 0:02:26.400 in our society, and that threat um has emerged that 0:02:26.520 --> 0:02:28.760 maybe they don't um. So I see a lot of 0:02:28.760 --> 0:02:32.200 it actually as the government reacting to the strength and 0:02:32.240 --> 0:02:37.680 power consulted in the private hands. They don't like the competition, Garrett. 0:02:37.840 --> 0:02:40.919 The Honest Ads Act, which was introduced in the US 0:02:41.000 --> 0:02:45.600 Senate in October with bipartisan support, would require Internet companies 0:02:45.639 --> 0:02:49.280 to reveal who's buying political ads and archived them for review. 0:02:49.360 --> 0:02:52.720 And it seems like, in this political environment, a no brainer. 0:02:52.800 --> 0:02:57.720 But why is Congress being so slow to pass it? Well, 0:02:57.760 --> 0:02:59.959 I mean a lot of people in Congress just general, 0:03:00.000 --> 0:03:02.799 really are against you know, disclosures of these kind of things, 0:03:02.880 --> 0:03:06.239 or they're sort of hesitant. I mean, obviously they want 0:03:06.240 --> 0:03:08.240 to be careful not to impinge on free speech. They 0:03:08.240 --> 0:03:11.440 want people to be able to buy political advertising, to 0:03:11.560 --> 0:03:14.480 share political speech whenever they want to, and whatever they 0:03:14.560 --> 0:03:17.520 way they want to. You know, the main impetus behind 0:03:17.520 --> 0:03:19.720 this bill is what we saw with Russia, you know, 0:03:19.880 --> 0:03:23.160 using show social networks primarily Facebook but also Twitter and 0:03:23.240 --> 0:03:25.520 YouTube to try to sort of you know, stir up 0:03:25.560 --> 0:03:28.040 debate in the US and potentially try to interfere with 0:03:28.080 --> 0:03:31.360 the election. So some of the people who are behind 0:03:31.360 --> 0:03:33.440 this bill are kind of using this as an opportunity 0:03:33.440 --> 0:03:36.200 to say, hey, let's bring the online platforms up to 0:03:36.240 --> 0:03:38.200 the level that we have for radio and television when 0:03:38.240 --> 0:03:40.560 it comes to having to disclose who paid for a 0:03:40.560 --> 0:03:43.640 political ad, you know. But other people are saying, well, 0:03:43.680 --> 0:03:45.520 let's be careful not to you know, make it two 0:03:45.560 --> 0:03:47.120 owners or push it too far. And of course the 0:03:47.120 --> 0:03:48.840 companies themselves want to do it on their own. They 0:03:48.840 --> 0:03:50.640 want to self regulate, they don't want someone telling them 0:03:50.680 --> 0:03:55.600 what to do. Eric to to what degree can we 0:03:55.680 --> 0:03:58.480 expect the companies to be able to navigate this, because 0:03:58.640 --> 0:04:00.880 it would seem as though if you got not just 0:04:00.920 --> 0:04:03.600 the United States, but other countries starting to regulate the 0:04:03.680 --> 0:04:08.000 content that is on these these platforms, it would be 0:04:08.040 --> 0:04:11.480 a real threat to their way of doing business. Yeah, 0:04:11.720 --> 0:04:15.320 there's no doubt that the regulators could undermine everything that 0:04:15.360 --> 0:04:18.920 we love about the Internet. Um and I'd like to 0:04:18.920 --> 0:04:22.320 think that the regulators recognize that capacity to make some 0:04:22.480 --> 0:04:25.960 really serious mistakes. On the other hand, regulators in the 0:04:25.960 --> 0:04:28.039 business regulation that's what they do. So I don't know 0:04:28.040 --> 0:04:32.560 that they can self control their impulses, and so I 0:04:32.600 --> 0:04:35.800 am nervous. We have seen across the globe, including here 0:04:35.800 --> 0:04:38.839 in the United States, that the forces of censorship, the 0:04:38.880 --> 0:04:41.680 idea that we can tell people what they can and 0:04:41.720 --> 0:04:45.120 cannot say, um are having a fantastic run um. And 0:04:45.200 --> 0:04:48.240 I think it would be uh somewhat disingenuous for us 0:04:48.279 --> 0:04:50.520 to think, Oh, that's just happening overseas, that's happening here 0:04:50.520 --> 0:04:53.720 in the U s as well, Garrett. The FCC is 0:04:53.760 --> 0:04:57.080 on track to undo the net neutrality rules by early 0:04:58.440 --> 0:05:01.640 How will that affect the big tech companies? Well, the 0:05:01.680 --> 0:05:04.159 nen new Childe rules that we came in under Barack Obama. 0:05:04.200 --> 0:05:06.640 We're sort of, you know, the reflective of the kind 0:05:06.640 --> 0:05:09.040 of original ethos of the Internet, which is, you know, 0:05:09.240 --> 0:05:12.120 this sort of idea that everything is should be fair 0:05:12.160 --> 0:05:14.360 and equal and that you can't you know, someone who 0:05:14.400 --> 0:05:18.200 owns a network can't charge you know, company A from 0:05:18.360 --> 0:05:21.200 more for using that network than they do to company B, 0:05:21.360 --> 0:05:24.600 or individual beer or politician A or whatever, what what 0:05:24.600 --> 0:05:27.440 whatever you have. And you know, we're seeing you know 0:05:27.520 --> 0:05:30.200 the potential of new rules coming down that are you know, 0:05:30.320 --> 0:05:32.080 kind of moved past that and are a little bit 0:05:32.120 --> 0:05:35.880 you know more and kind of the spirit of traditional capitalism, 0:05:35.920 --> 0:05:37.400 which says, you know, if you own the roadways, you 0:05:37.440 --> 0:05:39.760 get decide who goes on them and how much you 0:05:39.839 --> 0:05:42.880 charge them. So, you know, the largest Internet companies are 0:05:42.920 --> 0:05:45.599 so big and so powerful that they will be fine 0:05:45.800 --> 0:05:48.160 regardless of sort of tweaks or changes to the rules. 0:05:48.520 --> 0:05:51.120 You know. The concern here from critics of a Jedie 0:05:51.360 --> 0:05:54.240 at at at the regulator changing these rules are that, 0:05:54.279 --> 0:05:56.320 you know, smaller companies who want to compete with the 0:05:56.360 --> 0:05:58.560 netflix is of the world will have a tougher time 0:05:58.600 --> 0:06:03.240 doing it. Eric. Privacy is also an area that's been 0:06:03.279 --> 0:06:06.040 a very big deal because the for these companies and 0:06:06.360 --> 0:06:08.880 for people who are concerned about them, because they have 0:06:09.000 --> 0:06:10.960 so much information about their users, and a lot of 0:06:10.960 --> 0:06:13.360 their business models in fact, are built around that information. 0:06:13.800 --> 0:06:18.080 To what degree should we expect, you know, restrictions and 0:06:18.120 --> 0:06:23.000 requirements for the way that these companies handle private information 0:06:23.080 --> 0:06:27.200 of their customers. That's a pretty complicated question because there's 0:06:27.240 --> 0:06:31.360 a thousand different moving fronts on which the the regulators 0:06:31.440 --> 0:06:36.400 might move to help um impose privacy restrictions, but at 0:06:36.400 --> 0:06:39.760 the same time, there also might be movements to reduce privacy, 0:06:39.839 --> 0:06:42.160 such as the Honest Dad's Act that was mentioned earlier 0:06:42.160 --> 0:06:46.839 in this conversation, which actually designed to increase transparency in theory, 0:06:46.880 --> 0:06:50.599 actually reduced the privacy of quote advertisers and what they're doing. 0:06:51.120 --> 0:06:55.760 Um so, uh, no doubt though there's I think a 0:06:55.760 --> 0:06:59.960 lot of skepticism about, um the amount of private information 0:07:00.360 --> 0:07:03.880 under control of the tech giants, and I think that 0:07:04.120 --> 0:07:07.400 the combination of the fears about their power and the 0:07:07.440 --> 0:07:10.080 ability of that information to be used in ways that 0:07:10.280 --> 0:07:14.760 could could really um undercut our expectations as consumers. I 0:07:14.800 --> 0:07:17.680 think that creates a real recipe for some of those 0:07:17.680 --> 0:07:22.960 privacy regulations to succeed. In about thirty seconds, Garrett, are 0:07:23.000 --> 0:07:26.080 we already see any big announcements like we hear from 0:07:26.240 --> 0:07:30.000 the EU Competition Commission and Margaret Vestaire or is it 0:07:30.000 --> 0:07:32.840 going to be a little bit uh on the quieter 0:07:32.920 --> 0:07:34.840 side in the US just quickly, on any trust I mean, 0:07:34.840 --> 0:07:37.200 it's unlikely that you'll see the same kind of you know, 0:07:37.440 --> 0:07:39.720 aggressive movements that you've seen in in in the EU 0:07:39.880 --> 0:07:42.320 on antitrust here in the US, although people are talking 0:07:42.320 --> 0:07:44.200 more about it. But the thing that you want to 0:07:44.600 --> 0:07:47.200 look for is sort of you know, legislation like the 0:07:47.240 --> 0:07:49.680 Honest Ads Act, and there's another one. You should read 0:07:49.680 --> 0:07:51.600 our story that there's a lot going on, but yeah, 0:07:51.680 --> 0:07:54.080 it's more on the legislative side. It's a great story, 0:07:54.320 --> 0:07:57.920 has lots of charts and pictures to help you understand. 0:07:57.960 --> 0:08:01.040 It's usually that's a Garrett of Ink, Bloomberg News Tech 0:08:01.080 --> 0:08:03.560 policy reporter on Eric Gobin, co director of the High 0:08:03.560 --> 0:08:06.680 Tech Law Institutent Santa Clara University Law School. That's it 0:08:06.840 --> 0:08:10.000 for this edition of Bloomberg Law. We will see you tomorrow. 0:08:10.720 --> 0:08:13.720 This is Bloomberg Law on Bloomberg Radio.