Speaker 1: Hello, and welcome to the Votes and Verdicts podcast hosted
Speaker 1: by Bloomberg Intelligence, Bloomberg LP's investment research platform. In this
Speaker 1: podcast series, we talk about the intersection of business policy
Speaker 1: and law.
Speaker 2: My name is Matt Schuttenhelm.
Speaker 1: I'm an analyst with Bloomberg Intelligence covering US litigation and
Speaker 1: policy in the TMT space. I'm joined today by my
Speaker 1: Bloomberg Intelligence colleague in London, Tamlin Basin, who covers tech
Speaker 1: litigation and policy in Europe. Today we're going to walk
Speaker 1: through some of the biggest issues around US and EU
Speaker 1: tech regulation with the goal of getting you up to
Speaker 1: speed on our latest thinking on the current state of
Speaker 1: play on all things tech. With one exception, we won't
Speaker 1: be discussing antitrust in the tech space today. For that,
Speaker 1: look for a future podcast from our Bloomberg Intelligence colleague,
Speaker 1: Jennifer Reed.
Speaker 3: Hi, Matt, I'm happy to be joining you today. It
Speaker 3: seems like the tech industry has been caught in the
Speaker 3: regulatory crosshairs of European regulators for a few years now,
Speaker 3: and in Europe at least, the tough rhetoric has been
Speaker 3: backed up by some fairly onerous regulations and it's starting
Speaker 3: to feel like the US may be starting to catch up,
Speaker 3: certainly catching up on the rhetoric side, at least. I
Speaker 3: look forward to our discussion. I think we're going to
Speaker 3: have any to talk about, even without waiting into those
Speaker 3: competition issues that Jim will handle, right.
Speaker 1: Yeah, So today, on the US side, we will walk
Speaker 1: through questions on data privacy regulation, section two thirty of
Speaker 1: the Communications Decency Act, a potential TikTok ban, and broadband regulation.
Speaker 1: And then on the E side, we will talk about
Speaker 1: GDPR enforcement, some new content moderation regulations, Europe's own response
Speaker 1: to TikTok, and the fair shared debate. So with that,
Speaker 1: let's let's dive right into the questions, and I'll start
Speaker 1: with one for you, Tamlin. Years ago, we heard a
Speaker 1: lot about how GDPR was going to massively change how
Speaker 1: companies operated in Europe. Yet, at least from my perspective
Speaker 1: here in the US, it seems like it hasn't had
Speaker 1: that dramatic impact.
Speaker 2: Can you talk us through what's what's going on there
Speaker 2: with GDPR? Yeah, sure, Matt.
Speaker 3: And we're actually nearing the five year anniversary of GDPR
Speaker 3: first taking effect. That was in May eighteen when it
Speaker 3: first really began to take effect, and it's true that
Speaker 3: there hasn't been a sea change and how large platforms
Speaker 3: have operated in Europe during that time, I would say
Speaker 3: that there are some signs that its beginning to have
Speaker 3: an impact now. The threat of GDPR, which stands for
Speaker 3: the General Data Protection Regulation, was always basically twofold. One
Speaker 3: was the direct financial liabilities and this is because GDPR
Speaker 3: allows refines up to four percent of a company's total
Speaker 3: annual revenue. The second, and arguably in the grand scope
Speaker 3: of things, the larger threat, was on whether there was
Speaker 3: going to be a significant change to how these platforms
Speaker 3: collected and used personal data. Now, on the first threat
Speaker 3: and looking at sort of damages and fines, there has
Speaker 3: yet to be any one massive, multi billion dollar penalty
Speaker 3: issued against the platforms. However, in twenty two alone, Ireland's
Speaker 3: Data Protection Commissioner, which has jurisdiction over most of the
Speaker 3: big platforms, issued a total of five decisions against Meta
Speaker 3: for an aggregate of over one billion euros and financial penalties.
Speaker 3: The highest of these was a four hundred and five
Speaker 3: million euro penalty find based on how Instagram was collecting
Speaker 3: and processing data on children in January it announced a
Speaker 3: total of three hundred and ninety million euros and fines
Speaker 3: for how the platform's Facebook and Instagram were allowed to
Speaker 3: change their terms of service in order to gain a
Speaker 3: legal basis for the collection and use of personal data
Speaker 3: now here the Irish Commisioner. The Irish Commissioner ultimately said
Speaker 3: that they couldn't sort of bake the terms bank consent
Speaker 3: into their terms of service. But this is where we're
Speaker 3: sort of going to detour. The reason that GDPR is
Speaker 3: sort of slow moving is because it was designed to
Speaker 3: get consensus from all of Europe's data regulators and the
Speaker 3: way to do that is again, Ireland is sort of
Speaker 3: the regulator of primary authority. But when Ireland wants to
Speaker 3: issue you a financial penalty or say a platform does
Speaker 3: or does not violate GDPR, and when it's a large
Speaker 3: platform that sort of works across all countries in the EU,
Speaker 3: it has to publish a sort of draft opinion and
Speaker 3: get the essentially work towards towards consensus with the regulators
Speaker 3: and the other countries. So going back to this terms
Speaker 3: of service, Ireland's data regulator initially said that Facebook and
Speaker 3: Instagram could do this. However, then when it sent that
Speaker 3: draft opinion to other regulators, there was objections. Ultimately it
Speaker 3: went to the European Data Protection Board. There was designed
Speaker 3: to sort of resolve differences among regulators. Now the Data
Speaker 3: Protection Board sided with someone's other regulators and said that
Speaker 3: these terms of service could not be changed. So what
Speaker 3: that means is Iron's diary regulator then had this fine opinion,
Speaker 3: wasn't one that it initially agreed with, but one that
Speaker 3: it had to enforce on Facebook, and it said that
Speaker 3: it could not change those terms of service. That decision
Speaker 3: is ultimately going to be appealed up to Europe's top court,
Speaker 3: and that is going to take a few years. But
Speaker 3: that takes a lot of time, which is makes a
Speaker 3: lot of sense because GDPR was a massive new legislative
Speaker 3: development and it's going to take its time to work
Speaker 3: through the courts. It's still early days for GDPR, and
Speaker 3: I think it's going to take some time to develop
Speaker 3: and find out where the boundaries of those data collections are.
Speaker 3: And I think that actually brings it back to you, Matt,
Speaker 3: because because again GDPR began about eight nine years ago
Speaker 3: when discussions initially began, but it seems like data previously
Speaker 3: legislation at least in the last few congresses, has really
Speaker 3: picked up for a few years now, and it seems
Speaker 3: like there might be some momentum to actually getting something done.
Speaker 3: Can you tell us how that stands?
Speaker 2: Yeah, yeah, Camlin, it's been on the US side. I
Speaker 2: think you're right.
Speaker 1: You know, it's definitely lagging behind and trying to catch
Speaker 1: up to what Europe moved ahead with first.
Speaker 2: But you know, it's remarkable.
Speaker 1: You know, twenty years ago there was this bipartisan consensus
Speaker 1: that that the Internet works best with with with the
Speaker 1: regulators staying out of the way. Now that's that's basically
Speaker 1: completely reversed, and everyone agrees there needs to be regulation
Speaker 1: of these businesses. The problem is that no one's been
Speaker 1: able to reach a consensus on how to do it here.
Speaker 2: Here in the US.
Speaker 1: But you're right, there has been progress for the first time,
Speaker 1: and I think it's useful to step back and go
Speaker 1: to what you were talking about, how how this can
Speaker 1: impact the business model. You know, you know, Google and
Speaker 1: Facebook make hundreds of billions of dollars a year using
Speaker 1: data for advertising. And what we're talking about here is
Speaker 1: is legislation or regulation that goes directly to imposing limits
Speaker 1: on how they can use that data, and that can
Speaker 1: be really impactful for these businesses. You look at, for example,
Speaker 1: what Apple did with its change in app tracking, and
Speaker 1: Facebook alone said it's change in the ability to track
Speaker 1: data across different apps using Apple's products cost Meta ten
Speaker 1: million dollars last year. We're potentially talking about more significant
Speaker 1: changes in limits on how data is used, and so
Speaker 1: it can have a really meaningful impact on these companies
Speaker 1: depending on how this legislation takes shape. So far in Congress,
Speaker 1: nothing has really gotten close to the finish line. But
Speaker 1: we did, as we said, get closer than ever. I
Speaker 1: think last term in Congress, when the House of Representatives
Speaker 1: passed a law that made it out of the House Committee.
Speaker 1: Now it ran into trouble because some in the Senate
Speaker 1: didn't think it went far enough, it didn't regulate aggressively enough,
Speaker 1: and some in California, which has adopted its own law,
Speaker 1: we're concerned that this federal law would trump the state's
Speaker 1: ability to do more in terms of regulation and so
Speaker 1: and now we have a Congress that is more divided
Speaker 1: than it was last year, with Republicans controlling the House
Speaker 1: of Representatives and Democrats still controlling the Senate and the Presidency.
Speaker 1: I think that makes it tougher for Congress to get
Speaker 1: anything over the finish line. Given the difficulty of these
Speaker 1: issues and how they're sometimes politicized. What I think is
Speaker 1: really worth watching for investors in the near term, though,
Speaker 1: is the Federal Trade Commission is trying to move ahead
Speaker 1: with its own rules. It says, Okay, Congress, you're not
Speaker 1: going to do this. We'll move ahead. We have the
Speaker 1: power to make rules defining what is an unfair or
Speaker 1: deceptive practice, and we're going to have We're going to
Speaker 1: go ahead and tackle what what FTC chair Lena Khan
Speaker 1: has called the surveillance advertising business market and tackle it
Speaker 1: with regulations. And while I think that's going to take
Speaker 1: some time, the FTC rulemaking process is extremely slow and
Speaker 1: it's rarely been used before, and I think it's likely
Speaker 1: to run into legal problems. If they go aggressive with
Speaker 1: these new rules, as I think they will, I think
Speaker 1: it still matters.
Speaker 2: For these companies for this reason.
Speaker 1: I think even if the whole effort fails in court,
Speaker 1: I think those new rules end up shaping the debate
Speaker 1: about what it is to regulate in an aggressive or
Speaker 1: strong way, and So what now might be perceived as
Speaker 1: strong regulation could change after the FTC moves ahead with
Speaker 1: its proposals, and that could be a meaningful impact for
Speaker 1: these companies.
Speaker 2: So what I'm telling clients now is to keep an.
Speaker 1: Eye on the advance of that FTC rulemaking because it
Speaker 1: could be significant.
Speaker 3: And that's really interesting, Matt to see how that's developed
Speaker 3: over the years. Talking about how you know things potentially
Speaker 3: failing in court, I want to bring your attention to
Speaker 3: sort of the liability shield for Internet companies. This is
Speaker 3: I think Section two thirty and I believe there was
Speaker 3: a Supreme Court challenge to Section two thirty just a
Speaker 3: few weeks ago, and you actually, I believe went to
Speaker 3: the oral arguments. Can you tell tell us how those
Speaker 3: arguments shaped out and what's going on there?
Speaker 2: Yeah. Sure.
Speaker 1: So that's a big deal because we again for the
Speaker 1: you know, since since nineteen ninety six here in the US,
Speaker 1: we've had this this protection in federal law that says
Speaker 1: that anytime something bad in the real world happens that's
Speaker 1: linked to the Internet, you can't sue the platform for that.
Speaker 2: You can you can sue the.
Speaker 1: The poster of that content, but not the platform that
Speaker 1: hosts it. That's why Section two thirty is very important. Plus,
Speaker 1: it says that the platforms have the ability to restrict
Speaker 1: content if they're acting in good faith, they can go
Speaker 1: clean up their sites and remove speech without facing liability
Speaker 1: for that. And we've had again, the courts have adopted
Speaker 1: a very broad reading of that liability protection over the
Speaker 1: last twenty years, and so most cases against Internet platforms
Speaker 1: tied to content posted by others, those cases get tossed
Speaker 1: out very quickly with a motion to dismiss in court.
Speaker 1: The companies don't face costly discovery, and so that's been
Speaker 1: the status quo for a long time. But there's increasingly
Speaker 1: been a lot of noise on both sides of the
Speaker 1: political aisle suggesting maybe we need to change that liability shield,
Speaker 1: and Congress has tried to do it, not really gotten
Speaker 1: very far with serious efforts. But yes, the Supreme Court
Speaker 1: sort of out of nowhere. There was no split in
Speaker 1: the courts, which is usually why the Court steps in.
Speaker 1: It took this case about Google, and that was surprising
Speaker 1: in itself. Why would the Court take a case about
Speaker 1: a statute that the courts aren't even divided about how
Speaker 1: they read how they read it, and so that suggested
Speaker 1: real risk. And the idea here pushed by the Biden
Speaker 1: administration in the court case was that, Okay, maybe Google
Speaker 1: and Facebook and these other platforms shouldn't be responsible for
Speaker 1: content posted by third parties. That's what the liability shield does.
Speaker 1: But if they recommend that content, and then they're taking
Speaker 1: an affirmative act and they should be liable potentially at
Speaker 1: least shouldn't be shielded by Section two thirty when they
Speaker 1: take that affirmative step. And so that's what this case
Speaker 1: was about. That was argued in February, and we went
Speaker 1: into it with real concerns that the platforms could see
Speaker 1: significant disruption. But what came out of the argument was
Speaker 1: then a little bit surprising because despite the Supreme Court
Speaker 1: sort of surprisingly taking this case, the justices didn't really seem.
Speaker 2: Too anxious to make major changes in Section two thirty.
Speaker 1: There was a real concern about disrupting how the Internet
Speaker 1: operates because the meta Google, their whole system is built
Speaker 1: on using algorithms to organize content and recommend content. And
Speaker 1: the justices, I think we're worried that if the companies
Speaker 1: face liability for that one, you're going to see it
Speaker 1: just the court's flooded with lawsuits against these companies and
Speaker 1: I think it could mean hundreds of millions of dollars
Speaker 1: of new litigation expense for the companies, and the court
Speaker 1: was concerned about that. But more than that, the court
Speaker 1: was concerned that, you know, they might break the Internet,
Speaker 1: and that these are nine judges that don't know very
Speaker 1: much about how this stuff actually works. I think they're
Speaker 1: a little bit wary about what they're stepping into there.
Speaker 1: So what looked like a significant threat I think might
Speaker 1: not turn out to be. I expect we'll see a
Speaker 1: decision in the second quarter of this year on that.
Speaker 1: And with that, let me let me toss it back
Speaker 1: to you, Tamlin. So, Europe recently adopted two new sets
Speaker 1: of rules that were again aimed at the tech industry,
Speaker 1: the d m A and the DSA. Can you tell
Speaker 1: us what those are about?
Speaker 3: Yeah, absolutely, Matt. So I'm gonna focus mostly on the
Speaker 3: Digital Services Act or the DSA. And this sort of
Speaker 3: builds off what you were just talking about because we
Speaker 3: can sort of think of this as the counterpart to
Speaker 3: Section thirty two thirty, although it's a much updated counterpart
Speaker 3: as it just took effect this year, and actually, in
Speaker 3: fact companies still have a few months until they must
Speaker 3: fully comply. However, light two thirty Section two thirty there
Speaker 3: is protection for the platforms against liability for the post
Speaker 3: name of third party content, which is a huge thing because,
Speaker 3: as you said, so many people are saying roll this back,
Speaker 3: and you really risk some unintended consequences for the Internet. However,
Speaker 3: the updated law treats platforms differently based on bizarre or
Speaker 3: we'll say delightful acronym v LOOP, which stands for a
Speaker 3: very large, large online platform. Now, for these platforms, there
Speaker 3: are going to be heightened obligations relating to transparency for
Speaker 3: how content moderation policies are made and how these policies
Speaker 3: are carried out. Now, this is an update to the
Speaker 3: former law which was called the e Commerce Directive, and
Speaker 3: unlike the e Commerce Directive, under the DSA, there are
Speaker 3: significant penalties in the wings if very large, very large
Speaker 3: platforms run a fowel of these moderation rules. This is
Speaker 3: even more than GDPR because it's up to six percent
Speaker 3: of total global revenue. So there's definitely some degree of
Speaker 3: added risk here for the platforms. I think it's going
Speaker 3: to take time to find out how strict these rules
Speaker 3: are being applied. I'll just say anecdotally, so far, the
Speaker 3: one firm that is getting the most attention under the
Speaker 3: DSA is Twitter, and the reason is because regulators have
Speaker 3: been very interested in how all of the layoffs and
Speaker 3: how all of the volatility within that company is impacting
Speaker 3: its ability to monitor against illegal or harm content, which
Speaker 3: was one of the motivating factors for sort of updating
Speaker 3: the DSA. Turning over the DNA, which stands for the
Speaker 3: Digital Markets Act. Now, this primarily targets what it calls
Speaker 3: gatekeeper platforms, and it's going to harness those platforms with
Speaker 3: a wrap of obligations intended to allow new players to entermarkets.
Speaker 3: It goes into effect later this year. It's definitely something
Speaker 3: to keep an eye on. But this is is primarily
Speaker 3: a competition based law, so we're gonna leave it there
Speaker 3: for now. I do, however, Matt, want to turn it
Speaker 3: to your favorite app, TikTok, And there's a lot of
Speaker 3: noise I think on both sides of the Atlantic about
Speaker 3: potential risks that TikTok poses and whether or not TikTok
Speaker 3: should be banned. So can you tell us what's the
Speaker 3: likelihood of TikTok being removed from everybody's stone in the US.
Speaker 1: Yeah, that's a great question, Tamlin and I and this
Speaker 1: is really I think, you know, great news for companies
Speaker 1: like like Meta and Alphabet, which have faced so much
Speaker 1: scrutiny over the past couple of years here here in DC,
Speaker 1: to finally shift the focus to to someone else in itself.
Speaker 2: Is is a good thing?
Speaker 1: Is it going to be stripped off of your phone
Speaker 1: in the US? I'm I'm pretty skeptical that that's going
Speaker 1: to play out, But but you're absolutely right that this
Speaker 1: is this is a growing movement I think where and
Speaker 1: you're you're seeing bipartisan interests in in upping the pressure
Speaker 1: on on TikTok. You right now, you have the Biden
Speaker 1: administration going through what's known as it's scipious process uh
Speaker 1: TO to review TikTok for national security reasons. At the
Speaker 1: same time, you have states moving ahead with bans on
Speaker 1: use of the app for government employees. You saw the
Speaker 1: federal government do that and and ban use for federal
Speaker 1: government employees, and and you see Republican House members advancing
Speaker 1: bills last week, you saw in the Senate Mark Warner,
Speaker 1: a leading Democrat, advance a bill that would give the
Speaker 1: Biden administration new power outside of the scipious process to
Speaker 1: step in and mitigate or prohibit security threats, and TikTok
Speaker 1: could potentially be on the list of things that that
Speaker 1: the Biden administration could use for that new power. Now,
Speaker 1: there is momentum for these things that's different though than
Speaker 1: I think, suggesting that this is likely to lead to
Speaker 1: a band that makes you know, Facebook and Google see
Speaker 1: a competitor disappear here in the United States.
Speaker 2: And I said that for two reasons.
Speaker 1: One, TikTok is extremely popular here, and there is potential
Speaker 1: political risk I think for this administration if it were
Speaker 1: to move ahead and take that, you know.
Speaker 2: Most extreme step for.
Speaker 1: People, unless you know, maybe you and I are a
Speaker 1: little more engaged in this than a lot of America's
Speaker 1: younger voters, and I think there could be a concern
Speaker 1: that their reaction to this might not be a great
Speaker 1: thing for the next presidential election. I think that's a
Speaker 1: concern for the administration if it were to go to
Speaker 1: that most extreme step.
Speaker 2: Number Two, there's a First Amendment problem here.
Speaker 1: The Trump administration tried to move ahead with a TikTok
Speaker 1: band and it ran into trouble in court for two reasons. One,
Speaker 1: the statute didn't let it do what it wanted to do,
Speaker 1: but also the First Amendment. Now, Congress can fix the
Speaker 1: statute part and remove that as a legal problem, but
Speaker 1: Congress can't change the Constitution, and the First Amendment is
Speaker 1: still going to be a problem. And basically courts are
Speaker 1: going to say, Okay, maybe you have an important interest
Speaker 1: in going after TikTok here, but are you tailoring your
Speaker 1: response appropriately or are you blocking more.
Speaker 2: Speech than is necessary?
Speaker 1: And that effectively is going to make the Biden administration
Speaker 1: use a total ban as sort of a last resource.
Speaker 1: It's going to have to pursue other alternatives first, and
Speaker 1: I think that's where we're more likely to land. Is
Speaker 1: some sort of divestiture or other measures too to reduce
Speaker 1: China's potential influence over TikTok. But I think it's unlikely
Speaker 1: that that they'll go to a total band, that that
Speaker 1: that is a major gain for for the competitors, for Google,
Speaker 1: for Facebook, and just to see this this competitor fall
Speaker 1: away in the US, that seems unlikely.
Speaker 2: What about what about in Europe? What are you seeing
Speaker 2: on on on the TikTok side there.
Speaker 3: Yeah, so it's actually a bit similar to what you
Speaker 3: were describing in the US. So we have seen some
Speaker 3: moves to ban the apps from the phones for staff
Speaker 3: of the European Parliament, some moves like that. TikTok is
Speaker 3: trying to peers in Europe. It's sort of proactively taken
Speaker 3: measures to update and enhance its privacy and data security practices,
Speaker 3: trying to sort of mute a lot of the criticism
Speaker 3: criticism it's facing. So it's still early days here, but
Speaker 3: TikTok is definitely facing some headwinds. I like you, I'm
Speaker 3: a bit skeptical that there's going to be a total
Speaker 3: ban in Europe. On the popularity that you mentioned as
Speaker 3: a counterweight to a potential ban, it is one reason
Speaker 3: that's also relevant here. On the flip side, though, I'll
Speaker 3: note that there's a bit of a corollary in Europe
Speaker 3: that might not necessarily be present in the US, and
Speaker 3: that's what happened a few years ago with regards to Huawei. Now,
Speaker 3: in terms of positioning and network infrastructure, the Chinese firm
Speaker 3: didn't have all that much of a foothold in the US,
Speaker 3: but it's kit had been heavily leveraged to build four
Speaker 3: G networks in Europe. However, pressure and a lot of
Speaker 3: it that came from the US government on the inclusion
Speaker 3: of Huawei and five G network builds caused a lot
Speaker 3: of European carriers to sort of turn against it and
Speaker 3: in some place rip out the existing Huawei infrastructure and
Speaker 3: replace it. The beneficiaries of that have primarily been Nokia
Speaker 3: and ericson, So so there, you know, there things can happen,
Speaker 3: and its potential that that the push to ban TikTok
Speaker 3: could accelerate. That said, I think there are a few
Speaker 3: reasons to think that a popular customer facing app like
Speaker 3: TikTok would be treated differently than Huawei was, which, at
Speaker 3: least with respect to network build outs, Huawei was fairly
Speaker 3: far removed from the public's awareness. It's will definitely have
Speaker 3: to wait and see how it's developing, because it does
Speaker 3: definitely seems like every week there's a little bit more
Speaker 3: momentum and people are talking about a potential ban a
Speaker 3: little bit more. But right now I'm a bit dubious
Speaker 3: that it goes that way. I'm gonna I'm gonna one
Speaker 3: final question, Matt, and this this is one of your
Speaker 3: favorite topics going back quite a few years, and it's
Speaker 3: net neutrality. Seems like we've been talking about net neutrality
Speaker 3: for a decade, maybe longer, but in the last few years,
Speaker 3: I haven't seen on that much about it. Is Is
Speaker 3: there a chance that Biden's FCC might revive some of
Speaker 3: those rules.
Speaker 2: Yeah, there's there's a chance.
Speaker 1: I mean, that's sort of the remarkable thing is is
Speaker 1: what a hot topic net neutrality was here in DC
Speaker 1: for so long, and now how so much of the
Speaker 1: focus has shifted from the platforms that deliver you the Internet,
Speaker 1: the wires and the wireless delivery of that. We're talking
Speaker 1: you know, your your internet service provider, Comcast, AT and T, Verizon,
Speaker 1: T Mobile. It's now shifted so much to what we've
Speaker 1: We've spent most of this call on the the actual
Speaker 1: Internet platforms themselves, Meta and Facebook and Google and and
Speaker 1: so net neutrality has really been by it for a
Speaker 1: couple of years now, since the Trump administration tore down
Speaker 1: the rules that the Obama administration had had put in place.
Speaker 1: There is very little broadband regulation in federal law right now.
Speaker 1: Some states are moving ahead and though the FCC under Biden,
Speaker 1: I think, would like to move ahead with restoring aggressive
Speaker 1: broadband regulation. It's had trouble getting anything off the ground,
Speaker 1: and one of the reasons for that is that the
Speaker 1: FCC is still.
Speaker 2: Stuck in a dead block.
Speaker 1: There are two Democrat commissioners and two Republican commissioners, and
Speaker 1: President Biden has been unable to get the Senate to
Speaker 1: confirm a third Democrat, and he's just about to start
Speaker 1: over in that process to nominate a new candidate. That
Speaker 1: in itself is likely going to drag for months. And
Speaker 1: so even if the FCC wanted to start on something
Speaker 1: controversial like this, it doesn't have the votes until it
Speaker 1: gets that that fifth member. Then even when that can
Speaker 1: get started, it takes a long time to get through
Speaker 1: the regulatory process.
Speaker 2: And the courts are are pretty.
Speaker 1: Aggressive lately in terms of limiting agency's power to adopt
Speaker 1: major rules. And and what I'm referring to here is
Speaker 1: is the major Question doctrine the Supreme Court announced last year.
Speaker 1: I think you're going to see that new doctrine used
Speaker 1: against the FCC if it moves ahead with aggressive broadband regulation.
Speaker 1: So there are there are substantial hurdles facing broadband regulation
Speaker 1: here in the US, and so I think the the
Speaker 1: internet service providers should should feel pretty good in the
Speaker 1: near term that that they shouldn't see major disruption on
Speaker 1: the regular tory side anytime soon. How About in Europe
Speaker 1: there seems to be some sort of net neutrality like
Speaker 1: arguments brewing there.
Speaker 2: Can can you walk us through that? Yeah?
Speaker 3: Absolutely, and yeah this is very recent In fact, in February,
Speaker 3: the European Commission launched a twelve week consultation on, among
Speaker 3: other things, whether all stakeholders are contributing a fair share
Speaker 3: to making sure networks are really sufficiently equipped to meet
Speaker 3: these really bold connectivity and broad band goals that the
Speaker 3: EU has put in place. It really In short, the
Speaker 3: question is whether services like TikTok, Netflix, YouTube and potentially Meta,
Speaker 3: whether they should be forking over more funds to reduce
Speaker 3: the capital intensive burden on telecom carriers as they build
Speaker 3: out these five G networks. Now, unsurprisingly the idea was
Speaker 3: welcomed by some of those telecom carriers, and there's pretty
Speaker 3: serious opposite from the tech terms. I'll note that my
Speaker 3: colleague Matthew Bloxham is going to go to in the
Speaker 3: greater detail at a during a webinar later this month,
Speaker 3: which is actually going to have stakeholders from both the
Speaker 3: sort of big tech content side as well as the
Speaker 3: carrier side. So I strongly encourage listeners to check that
Speaker 3: out to get a deeper understanding of how this argument
Speaker 3: is beginning to shape up in Europe. So it's definitely
Speaker 3: another one to watch for, and I think over the
Speaker 3: summer we're going to see a lot of lobbying by
Speaker 3: votes or the platform side and the carrier side to
Speaker 3: really try to shape how this consultation goes. And now, Matt,
Speaker 3: I think that wraps up what we have time for today.
Speaker 3: As a reminder, you can find Bloomberg Intelligent Research Intelligence
Speaker 3: research on all of the topics that we've discussed today
Speaker 3: and on many more on the Bloomberg terminal by typing
Speaker 3: big bi for Bloomberg Intelligence. Thanks a lot for joining me,
Speaker 3: and let's definitely try to reconnect in a few months
Speaker 3: to see what else is growing across the tech regulation landscape.
Speaker 2: Sounds good, Thanks dam Ling.