Business Standard

A big defeat for Big Tech

Tech firms realise that open debate favours consumer data security concerns, so they try to ensure no such debate could ever occur

- The writer, a former chief economist of the World Bank, is professor at Columbia University, and a Nobel laureate in economics. ©Project Syndicate, 2024

Last year, US President Joe Biden’s administra­tion infuriated lobbyists representi­ng Big Tech firms and others that profit from our personal data by denouncing a proposal that would have gutted domestic data privacy, online civil rights and liberties, and competitio­n safeguards. Now, Mr Biden’s new executive order on Americans’ data security reveals that the lobbyists had good reason to worry.

After decades of data brokers and tech platforms exploiting Americans’ personal data without any oversight or restrictio­ns, the Biden administra­tion has announced that it will ban the transfer of certain kinds of data to China and other countries of concern. It is a small, but important, step toward protecting Americans’ sensitive personal informatio­n, in addition to government-related data.

Moreover, the order is likely a precursor to additional policy responses. Americans are rightly worried about what is happening online, and their concerns extend well beyond privacy violations to a host of other digital harms, such as mis- and disinforma­tion, social media-induced teenage anxiety, and racial incitement.

The firms that make money from our data (including personal medical, financial, and geolocatio­n informatio­n) have spent years trying to equate “free flows of data” with free speech. They will try to frame any Biden administra­tion publicinte­rest protection­s as an effort to shut down access to news websites, cripple the internet, and empower authoritar­ians. That is nonsense.

Tech companies know that if there is an open, democratic debate, consumers’ concerns about digital safeguards will easily trump concerns about their profit margins. Industry lobbyists thus have been busy trying to short-circuit the democratic process. One of their methods is to press for obscure trade provisions aimed at circumscri­bing what the United States and other countries can do to protect personal data.

It might seem obvious that a US president should protect Americans’ privacy and national security, both of which could be jeopardise­d depending on how and where the vast amounts of data that we all generate are processed and stored. Yet, amazingly, former President Donald Trump’s administra­tion sought to prohibit the US from placing any restrictio­ns on “the cross-border transfer of informatio­n, including personal informatio­n” to any country if such transfers were related to the business of any investor or service provider operating in the US or other countries signing the agreement.

The Trump administra­tion’s proposal to include this rule in the World Trade Organizati­on did provide for one exception, which ostensibly would allow some regulation “necessary to achieve a legitimate public policy objective,” but it was designed not to work in practice. While Big Tech lobbyists cite the exception to rebut criticism of the broader proposal, the provision’s language comes straight from a WTO “General Exception” that has failed in 46 of 48 attempted uses.

The ban on cross-border data regulation was just one of four proposals that Big Tech lobbyists convinced Trump officials to slip into the revised North American Free Trade Agreement and to propose at Wto-related talks. Written in arcane jargon and buried among hundreds of pages of trade-pact language, these provisions were misleading­ly branded as “digital trade” rules.

By prohibitin­g government­s from adopting certain policies, the proposal’s industry-written terms threatened bipartisan efforts in the US Congress to counter Big Tech’s abuses of consumers, workers, and smaller businesses. They also undercut the US regulatory agencies responsibl­e for protecting our privacy and civil rights, and for enforcing antitrust policy. In fact, had the Trump-era rules banning government restrictio­ns on data flows gone into effect at the WTO, they would have barred the Biden administra­tion’s own new data-security policy.

Few people realised the Trump-era proposal even existed — except, of course, for the lobbyists who had been quietly commandeer­ing trade talks. While no previous US trade pacts had included provisions pre-empting executive and congressio­nal authority over data regulation, digital platforms suddenly would have been granted special secrecy rights. The kinds of algorithmi­c assessment­s and AI pre-screenings that Congress and executive-branch agencies deem critical to protecting the public interest would have been banned.

After Trump’s loss in the 2020 election, industry lobbyists still hoped to make these anomalous rules a new norm. Their plan was to get the same provisions added to a Biden administra­tion agreement called the Indo-pacific Economic Framework. But instead of going with the lobbyists, Biden administra­tion officials worked with Congress to determine that the Trump-era proposals were not compatible with congressio­nal and administra­tion goals for digital privacy, competitio­n, and regulation.

Now, we can understand why tech lobbyists were so incensed by the Biden administra­tion’s decision to withdraw support for the Trump-era proposal. They recognised that by casting aside Big Tech’s favoured “digital trade” handcuffs, the Biden administra­tion was reassertin­g its authority to regulate the large platforms and data brokers that Americans across the political spectrum think have too much power. Trade agreements have gotten a bad name precisely because of this kind of behaviour by corporate lobbyists.

The US needs a robust debate about how best to regulate Big Tech, and over how to maintain competitio­n while preventing the digital harms that are stoking political polarisati­on and underminin­g democracy. Obviously, the debate should not be tethered by constraint­s imposed surreptiti­ously by Big Tech through trade agreements. US Trade Representa­tive Katherine Tai is exactly right when she says that it would be “policy malpractic­e” to lock in trade rules limiting action on these matters before the US government has establishe­d its own domestic approach.

Whatever one’s position on the regulation of Big Tech — whether one believes that its anti-competitiv­e practices and social harms should be restricted or not — anyone who believes in democracy should applaud the Biden administra­tion for its refusal to put the cart before the horse. The US, like other countries, should decide its digital policy democratic­ally. If that happens, I suspect the outcome will be a far cry from what Big Tech and its lobbyists were pushing for.


Newspapers in English

Newspapers from India