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Regulating Technology Firms in the 21st Century

The advancement of technology in America has driven the advancement of humanity nationally and globally. But technology has also outpaced our government’s understanding of it, and regulations are falling short of protecting us from Big Tech companies that are prioritizing profits over our well-being.

Today, we live in a hyper-connected environment, led by these tech companies, that has impacted our culture, lifestyles, families, and politics. The culture of innovation and the quality of human capital in America has fostered the growth of this industry over the past couple of decades to create trillion-dollar tech companies, in a framework of self-regulation.

But the benefits these services have given us have begun to clash with the wellbeing of society. 

Big Tech companies are the winners of the 21st century economy. They’ve amassed too much power, largely profiting from our personal data, and unaccountable responsibility—we have reached a point where the government needs to step in. And we’re starting to take notice, with about 50% of US adults1 favoring more regulation on tech firms. These companies themselves are asking for regulation (until you propose specifics).

Unfortunately, our government is unequipped to handle it. We dissolved the Office of Technology Assessment in 19952. Recent hearings3 with tech CEOs like Mark Zuckerberg exposed the lack of basic understanding of technology by members of our Congress. 

Digital giants such as Facebook, Amazon, Google, and Apple have scale and power that renders them more quasi-sovereign states than conventional companies. They’re making decisions on rights that government usually makes, like speech and safety. Their business models are predicated on keeping people engaged, driven by algorithms that are supercharged by technology to predict our behavior, such as artificial intelligence and machine learning, and that feed off of our data, creating an increasing asymmetry of power without any accountability. 

The most concerning of all is the effect technology and social media platforms are having on our kids. Technology, smartphones, and tablets are ubiquitous. Our kids have access to them from infancy. They’re getting hooked, from a young age, on apps and platforms that function as dopamine slot machines, potentially destroying the psyches of a generation. It’s affecting our kids’ mental and physical health, contributing to obesity, sleep deprivation, posture issues, stunting social skills, and blurring the lines between real and virtual relationships. It’s time to take action.

We need to come up with 21st century solutions to these problems. 

My approach is four pronged:

  1. Regulate the use of data and privacy by establishing data as a property right. The associated rights will enable individuals to retain ownership and share in the economic value generated by their data.
  2. Minimize health impacts of modern tech on our people, particularly our children. I will create a Department of the Attention Economy that focuses on smartphones, social media, gaming, and apps, and how to responsibly design and use them, including age restrictions and guidelines.
  3. Stop the spread of misinformation that is eroding trust in our institutions and fanning the flames of polarization in our society. I will scale up VAT on digital ads to hasten a shift away from ad-driven business models, require disclosures on all ads, regulate bot activity, and regulate algorithms, addressing the grey area between publishers and platforms.
  4. Adopt a 21st century approach to regulation that increases the knowledge and capacity of government while using new metrics to determine competitiveness and quickly identifies emerging tech in need of regulation. 

Applying 20th century solutions to 21st century problems is not the right way to go. Measures such as breaking up big tech companies to foster competition wouldn’t necessarily address the fundamental problems. Breaking up Google into 5 mini-Googles wouldn’t change much as people don’t want to use the fourth best search engine. Network effects would eventually turn out a dominant player. That’s why we are taking a modern approach. 

This is a New Way Forward. 

 

1. Data as a Property Right, and Increased Privacy Protections

Each of us generates a significant amount of data each day4 during the normal course of our activities, and our data is now worth more than oil.5 Our phones and computers track our movement and actions, while our browsers and websites track our online activities. As we’ve seen, some of the largest tech companies can know more about us and our lives than our families and those closest to us. That’s what happens when about 90%6 of all online searches globally are done on just one platform. 

As of now, that data is owned by the people who collect it, and they’re allowed to do anything they want with it. They’ve sold it, used it to target us with advertisements, and have analyzed the vast quantity of data to draw conclusions on whole populations, allowing them to monetize it.  At this rate, the extraction of personal data is America’s fastest growing industry, worth $197.7 billion by 2022.7

We’ve also seen it abused. Some companies haven’t done enough to protect our data, resulting in breaches that have made our private information insecure. Others have sold it to disreputable companies, allowing them to target us for everything from marketing fraudulent services to influencing elections. Companies themselves have asked for better and clearer rules. This breach in American privacy and data security requires regulation of ongoing data collection. 

If our data is being used, we need to know how it’s being used and how we’re being compensated for it. We also need to regain control of it when we want. By implementing measures to increase transparency in the data collection and monetization process, individuals can begin to reclaim ownership of what’s theirs.

Data generated by each individual needs to be owned by them, with certain rights conveyed that will allow them to know how it’s used and protect it. These rights include:

  • The right to be informed as to what data will be collected, and how it will be used
  • The right to opt out of data collection or sharing
  • The right to be told if a website has data on you, and what that data is
  • The right to be forgotten; to have all data related to you deleted upon request
  • The right to be informed if ownership of your data changes hands
  • The right to be informed of any data breaches that include your information in a timely manner
  • The right to download all data in a standardized format to port to another platform

Consent should be informed and active – companies are responsible for ensuring that they collect a positive opt-in from each user before collecting any data, and this opt-in should be accompanied by a clear and easy-to-understand statement about what data is being collected, and how it is going to be used. You can waive these rights and opt in to sharing your data if you wish for the companies’ benefit and your own convenience – but then you should receive a share of the economic value generated from your data.

As President I Will…

  • Use a VAT on digital advertisements and data use to ensure every person whose data is used for tech companies to sell ads and sustain their business model will get a slice of every digital ad.
  • Establish a Digital Bill of Rights that clearly outlines how data is allowed to be collected and used.
  • Allow individuals to port their personal data to and from platforms of their choosing.
  • Mandate that platforms offer users the option to delete customer data after using it.
  • Mandate that all platforms have the option to use their service without collecting data or personal information on the user.

 

2. Minimize health impacts of modern tech on our people, especially our children

We are beginning to understand exactly how much of an adverse effect some of these new technologies are having on the well-being of society, especially on our children.

There are serious concerns about their effects on our kids’ brains, socio-emotional states, and cognitive and physical development at a time when 22% of young children, 60% of tweens, and 84% of teenagers currently use a smartphone and social media apps.8

Without real accountability, platforms like Facebook, Twitter, and Instagram are ignoring the negative impact of their services on our children. As the father of two young boys, I worry about what this will mean for the generations growing up with these technologies. Our kids have access from infancy. They’re getting glued on apps and devices that are functioning as dopamine slot machines.

I look back at my childhood and I remember riding a bike around the neighborhood, but now tablets, computers, and mobile devices have shifted the attention of youth. Today, more than half of children aged 8-12 have their own tablet and a quarter of them have their own smartphone.9

The effects are worrying. There has been an unprecedented surge in depression,10 anxiety, and suicide, and a marked decrease in sociability. Teenagers are spending more time worrying about whether their online acquaintances like their recent post than spending time with their friends in person and developing social skills. The average teenager spends Friday nights at home, interacting with a machine, instead of being out with friends.

Even the content for children on these platforms isn’t subject to any rules and standards the way they are on TV. This lack of regulation means that our children are exposed to extreme and inappropriate content at younger and younger ages.

It’s also causing other risks to health. Studies have found adverse associations between screen time and sleep deprivation.11 Extended screen time has also been linked with obesity in children. The health of our kids, and potentially of generations after, are at risk. We must take action.

Those who have worked within the industry describe the work they’ve done in stark terms. They say that the smartest minds of a generation are spending their time getting teenagers to click on ads and obsess over social media posts.

In short, many experts are worrying that the widespread adoption of a poorly understood technology has caused mental health and developmental problems for an entire generation. We can’t just accept that our kids aren’t all rightwe need to do something about it.

As President I will…

  • Create a Department of the Attention Economy that focuses specifically on how to responsibly design and use smartphones, social media, gaming, and chat apps. It will include overall guidelines, as well as age-based ones.
  • Provide guidance (and regulation, if needed) on design features that maximize screen time for young people, like removing autoplay video for children under 16, removing the queues that allow infinite scrolling, capping the number of recommendations per day, reducing notification signs and “like” counts, and using artificial intelligence and machine learning to determine when children are using devices to cap screen hours per day.
  • Establish rules and standards around kid-targeted content to protect them from extreme or inappropriate content.
  • Incentivize content production of high-quality and positive kids programming similar to broadcast TV.
  • Require platforms to provide guidance on kid-healthy content for parents, and provide incentives for companies that work to make user data of minors available to their parents.
  • Include classes on the responsible use of technology in public school curricula and teach children how to distinguish reliable from unreliable news sources online.

 

3. Stop the spread of disinformation

Social media platforms have catalyzed mass disinformation campaigns over the past decade, threatening not just our wellbeing but our democracy. Despite efforts by the tech companies themselves to combat internet disinformation, political disinformation campaigns have reached over 70 countries. Facebook has become the number one social network for disinformation.12

Algorithms driving recommendations towards conspiracy theory content or other types of disinformation need to be reined in. Same goes for bots, which have exacerbated the situation.

We must address once and for all the publisher vs. platform grey area that tech companies have lived in for years. Facebook, Twitter, and other social media sites are using algorithms to make recommendations. These recommendations drive the majority of traffic, up to 70% for Google owned YouTube.13

Section 230 of the Communications Decency Act14 absolves platforms from all responsibility for any content published on them. However, given the role of recommendation algorithms—which push negative, polarizing, and false content to maximize engagement—there needs to be some accountability. 

As President I will…

  • Amend the Communications Decency Act to reflect the reality of the 21st century— that large tech companies are using tools to act as publishers without any of the responsibility.
  • Assist companies in detecting bots and penalize them if they don’t meet minimum effectiveness thresholds at regulating the spread of information, especially from foreign actors.
  • Work with companies to create algorithms that minimize the spread of mis/disinformation, and information that’s specifically designed to polarize or incite individuals.
  • Require algorithms on platforms that allow political advertisements or the sharing of news stories to be open source, or confidentially disclosed to the Department of the Attention Economy.
  • Require large, clear labeling on all advertisements shown on an online platform. 
  • Require the publication in a conspicuous location of how purchases and data is being used to target the individual with other advertisements.
  • Place a higher VAT on digital advertisements in order to incentivize companies to shift to an ad-free, subscription model.
  • Include classes on the responsible use of technology in public school curricula and teach children how to distinguish reliable from unreliable news sources online.

 

4. A modern approach to antitrust and regulation requires a 21st century framework

In order to regulate technology effectively, our government needs to understand it. It’s embarrassing to see the ignorance some members of Congress display when talking about technology, and anyone who watched Congress question Mark Zuckerberg is well aware of this. Without a base level of understanding, it’s unreasonable to expect proper regulation of major tech companies, or the drafting of legislation that addresses the critical technological issues that we’ll continue to face in artificial intelligence and cybersecurity. 

Yet, the Office of Technology Assessment (OTA), which provided valuable research and briefings to inform our legislative branch, was phased out in 1995.15 

Free of the bias of private industry or think tanks, the OTA provided neutral information on the latest technological developments to legislators. Many of these reports, despite being a quarter of a century old, show an amazing prescience on topics that are still relevant to this day. This vital institution needs to be revived, with a budget large enough and rules flexible enough to draw top talent away from the very lucrative private sector, and with the mandate to ensure that our legislators are up to the task of regulating the biggest technological issues of our time.

Additionally, it’s high time we created a Department of Technology at the Cabinet level. Technological innovation shouldn’t be stopped, but it should be monitored and analyzed to make sure we don’t move past a point of no return. This will require cooperation between government and private industry to ensure that developing technologies can continue to improve our lives while keeping our data safe and ensuring our autonomy. 

This Department, based in Silicon Valley and initially focused on Artificial Intelligence, will be led by a Secretary of Technology who will spearhead public-private partnerships to tackle emerging threats and maximize the benefit of technological innovation to society. 

Once the government is up to speed on technology, and measures have been implemented to curb the negative effects on society, we must ensure that control over the most powerful technologies in history don’t accrue in the hands of a few. However, we must recognize that 20th century frameworks of breaking up companies just based on size or pricing impact on consumers won’t be effective. Network effects will always ensue, as a dominant player invariably emerges. And no one wants to use the fourth best search engine. 

There are certainly times when parts of a tech company should be divested based on traditional metrics, but other metrics beyond size and consumer impact—such as data assets, vertical integration, or lack of new business formation—should be considered as well.

Determining monopoly power requires us to make clear distinctions on market player vs. market platform. If Amazon is the marketplace, it shouldn’t be competing as a market player, as well. It’s difficult for Amazon or Apple to guarantee credibility to other market actors that they won’t take advantage of their access to information and their ability to shape the market conditions. Consolidation of data assets, shutting down competition (even if it won’t affect prices), and the lack of competitive business formation should all be considered when determining whether the government needs to take action against a business.

Finally, government needs to be forward-thinking and informed on the latest technological developments, so that new regulations can keep up with innovation. We shouldn’t stifle innovation, but we also shouldn’t let it outpace our ability to regulate it.

Two recent examples that highlight the problems: cryptocurrencies, and video game loot boxes. Both are areas that many legislators are blind to, or completely unprepared to understand the technical aspects of. This is creating an unregulated marketplace in both areas. The lack of regulation is having disparate impacts:

  • Cryptocurrencies are seeing levels of fraud because of the lack of regulation. Other countries, which are ahead of us on regulation, are leading in this new marketplace and dictating the rules that we’ll need to follow once we catch up.
  • Loot boxes are impacting our children, causing them to spend more time and money on these video games, without many parents being aware of their existence.

Cryptocurrencies and digital assets have quickly grown to represent a large amount of value and economic activity, outstripping government’s response. A national framework for regulating these assets has failed to emerge, with several federal agencies claiming conflicting jurisdictions. 

Currently, different departments of the federal government consider digital assets as property, commodities, or securities. Some states have onerous regulations in the space, such as New York’s BitLicense. Navigating this has had a chilling effect on the US digital asset market.

Separately, loot boxes are a mechanism in games where digital items can be purchased to add to the experience, but they’re done in a “blind” manner—you don’t know what you’re receiving until after you pay for it. These mechanisms can seem similar to gambling because of the random outcome, keeping players (usually kids) engaged on the platform for longer or costing them hundreds or thousands of dollars in addition to the base cost of the game. Some games have a “free-to-play” model, where the game itself is free but they’re funded by the purchase of these loot boxes.

Regulation that requires online game publishers to increase transparency of draw probability for virtual items, and limitations on number of loot box purchases, would be a start. We also need increased parental control for these items so that children don’t end up responsible for large charges.

In short, our government’s knowledge of technology and ability to regulate it and the market is being outpaced by innovation. We need a new generation of leadership that understands these new and emerging technologies so that proper frameworks can be developed to protect consumers and ensure innovation and competition.

As President I will…

  • Revive the Office of Technology Assessment and establish a Department of Technology.
  • Set new standards and metrics for antitrust, including size of data assets and lack of business formation.
  • Require platforms that are market players and market platforms to maintain an even playing field for competitor products or services on their platforms, or exit the market.
  • Promote legislation that provides clarity on cryptocurrency/digital asset market space by:
  • Defining what a token is, and when it is a security
  • Defining which federal agencies have regulatory power over crypto/digital assets space
  • Provide for consumer protections
  • Clarify the tax implications of owning, selling, and trading digital assets
  • Promote the nationwide adoption of recognition of protections afforded by a series LLC
  • Preempt state regulations, when possible, to create one national framework
  • Regulate mechanisms in video games that allow people to “gamble” on random items that are purchased with real money to prevent over-purchasing by minors and to increase transparency in what is being received and the value of it.
  • Ensure that “free-to-play” games marketed to minors do not rely on exploiting child psychology for profit, and guarantee that every in-game purchase is approved by an adult.

It’s right to embrace technology and all the conveniences and advantages that come with its advancement, but we can’t do it at the cost of our humanity. At the core of our technology use, needs to be our well-being and that of future generations. We owe it to ourselves to pursue a new way forward in this technology-driven era, while we still can. 

-Andrew

 

Footnotes:

1 – https://news.gallup.com/poll/265799/americans-split-regulation-big-tech.aspx 

2 – https://ota.fas.org/otareports/year/1995a/ 

3 – https://www.nytimes.com/2018/04/12/technology/mark-zuckerberg-testimony.html

4 – https://www.weforum.org/agenda/2019/04/how-much-data-is-generated-each-day-cf4bddf29f/ 

5 – https://www.economist.com/leaders/2017/05/06/the-worlds-most-valuable-resource-is-no-longer-oil-but-da ta 

6 – https://www.statista.com/statistics/216573/worldwide-market-share-of-search-engines/ 

7 – https://assets.futuremajority.org/uploads/report-for-future-majority-on-the-value-of-people-s-personal-data-shapiro-aneja-march-8-2019.pdf

8 – https://www.commonsensemedia.org/sites/default/files/uploads/research/census_researchreport.pdf

9 – https://www.apa.org/helpcenter/digital-guidelines 

10 – https://www.npr.org/2017/12/17/571443683/the-call-in-teens-and-depression 

11 – http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=EDU/WKP%282019%293&docLa nguage=En 

12 – https://comprop.oii.ox.ac.uk/wp-content/uploads/sites/93/2019/09/CyberTroop-Report19.pdf

13 – https://www.pewresearch.org/internet/2018/11/07/many-turn-to-youtube-for-childrens-content-news-how-t o-lessons/ 

14 – https://www.eff.org/issues/cda230

15 – https://ota.fas.org/

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