Rep. Zoe Lofgren Recognizes The Nuances And Complexities Of Regulating Internet Companies

from the there-are-so-many-tradeoffs dept

It’s taken as given among many politicians (and much of the media) that “something must be done” about “big tech” companies. The public seems a lot less concerned about it all. Unfortunately, as we’ve noted repeatedly, many in the government are focused on specific regulatory levers that seem incredibly unlikely to work (and which have a high likelihood of making any of the problems discussed even worse). A big one is antitrust. We keep hearing grandstanding politicians talk about how they need to break up “big tech” without any of them getting into how that will solve any particular issue. In the House, Rep. David Cicilline has been the poster child of this approach — insisting that antitrust is the answer, but refusing to actually explore the nuances and tradeoffs of that approach.

One of the big problems with the antitrust approach is that the traditional remedies of antitrust do very little to fix the issues that people insist come about due to the big internet companies. Big fines seem mostly meaningless to them (though they will shift some behavior). And breaking them up really doesn’t do very much at all. The value of the internet is the ability to communicate with everyone, and you can’t create “BabyBooks” for Facebook in the same way it was possible to create “BabyBells” out of AT&T in the 1980s (and, we can all see how well that worked in the long run).

Some of us have suggested alternative approaches that might lead to more real competition and better end-user control over data. Over the last few months, I have been having more discussions with various different government officials about exploring some of these alternative remedies, but I have been less and less sure if any government official would ever actually pay attention.

So it’s actually nice to see Rep. Zoe Lofgren, responding to Cicilline’s giant confusing mess of a “Digital Markets” report by posting her own thoughts on better ways to think about regulating the internet. I don’t agree with all of Lofgren’s points, but it’s one of the most sane and reasonable documents I’ve seen coming from a government official in a long, long time regarding issues on regulating internet companies. Unlike so many, it acknowledges the nuances and trade-offs inherent to this discussion, and the lack of any silver bullet fix.

The more difficult questions are in deciding how and when to regulate single-firm conduct, which the report often describes as a platform exercising its ?gatekeeper power? over who uses it and under what terms. Our laws should promote open platform ecosystems as a central objective, but this is far from a simple matter in practice, because many of a digital platform?s assertions of gatekeeping power can be good faith efforts to serve user interests ? such as privacy, security, and/or quality of service ? and may protect the long-term health of the larger ecosystem. In certain instances, platforms may need to exclude certain parties or content outright ? for example, moderating hate speech and the advertisement of fraudulent or harmful products ? to ensure that a platform otherwise remains open and vibrant for other speakers and transactions.

A platform company could also abuse gatekeeping power ? to promote its own products and services, to lock in users from leaving for other platforms, and so on. The challenge for Congress is to craft a legal framework to allow regulators to distinguish abusive gatekeeping from legitimate efforts to serve user interests and prevent ecosystems from breaking down. These sorts of cases will often resist easy categorizations and generalized answers, as regulators are forced to consider how deeply to intervene in the details of a platform?s operations, such as its precise terms of services or particular design aspects of its user interface.

The document also talks about privacy issues, and whether or not antitrust is truly the tool to deal with that.

The Report contends that privacy abuses by online platforms are symptoms of inadequate competition. This can be true in some cases, and in those instances competition policy could play a useful supporting role to give consumers more privacy-protective alternatives in the marketplace. But it is a mistake to treat privacy largely as a competitive problem with competition-focused remedies. Abusive data practices are found not only in large platforms but also from many smaller companies, as the latter are more likely to buy and sell sensitive user data to data brokers and other third parties. Even in more competitive digital markets, users often do not have enough visibility or understanding into how their personal data is being collected, used, and disseminated, and face insurmountable barriers to defending their own privacy interests, through either individual or collective action.

Effective privacy and data regulations can and will promote competition, both by restricting abusive business models that otherwise can trigger a race to the bottom, and by giving users more practical control over who holds their data and how it is used. The Report?s call for greater authority to promote data portability and interoperability is important. However, as with other privacy measures, it?s unlikely this can be accomplished through the ex post enforcement of generalized antitrust laws. Instead, it requires more specialized, expert, and prospective privacy regulation.

I still worry that we run into the same issues with most privacy legislative proposals as we run into with antitrust remedies: those putting in place the rules will misunderstand the nature of the problem and the remedy, and create results that only favor the largest companies who can comply with silly rules that don’t always make sense.

But taking approaches that (1) lead to more interoperability, (2) more end-user control, and (3) greater transparency have always seemed to be the approach that might eventually have a real impact. It’s good to see that Lofgren seems to be thinking along similar lines.

And, she also notes that many other private interests are trying to use these discussions to get their own favored results, and Congress should be wary of that. She doesn’t name them, but Hollywood, the telcos, and the legacy newspaper business (not to mention big lumbering old tech companies like Oracle and IBM) have been actively trying to co-opt this process in a punitive way against companies which effectively out-innovated them. This gets far too little discussion, but it’s great to see Lofgren point out the risk:

In all of this ? competition, privacy, and or any other fundamental objective in platform regulation ? we must be vigilant against regulatory and legislative agendas being co-opted to serve narrower interests. As I noted above, the rise of digital platforms unleashed a flood of new competition for earlier incumbents in many other industries. While these incumbents can have legitimate complaints about their treatment within platform ecosystems, this does not justify special regulatory protections that would lock down such ecosystems, favor conventional business models against digitally-native content and services, or attempt to restore markets to their pre-digital states.


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Comments on “Rep. Zoe Lofgren Recognizes The Nuances And Complexities Of Regulating Internet Companies”

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Anonymous Coward says:

Really the trade offs of data transportibility and user level transparency have been security as noted from the start despite legislatures acting shocked. Namely that by definition it creates a hole for mass exfiltration of files without any protection. If the companies are legally obligated to hand over all data on the user then it means once somebody gets into an account once they are obligated to hand it over.

Anonymous Coward says:

Taking a side note and running with it...

What’s all this talk I hear about you fooling around with the college widow? No wonder you can’t get out of college. Twelve years in one college! I went to three colleges in twelve years and fooled around with three college widows.
— Professor Wagstaff

… in the same way it was possible to create "BabyBells" out of AT&T in the 1980s (and, we can all see how well that worked in the long run).

How DID that work out in the long run?

  • long distance service is no longer a per-call item (though inter-lata service may be a line item on your bill).
  • different phone handsets, that you can own yourself. (Remember the phone company "owning" your handsets?)
  • line-sharing between companies, allowing for at least some overlap of service districts and "minor phone companies"
  • wireless phone handsets
  • cell phones
  • Instead of one telephone company screwing people over, we have three. And you might also count the cable companies, who also offer phone service.

How much of that is simply technology catching up with the phone companies? Eh, probably most of it. But made ya look!

MightyMetricBatman says:

I should hope Representative Lofgren is familiar with the difficulties of proper regulations for the large internet consumer service companies. For Representative Lofgren, this is a local issue. Zofgren is the representative of the California 19th district at the bottom of the Bay Area representing San Jose and Santa Clara of Silicon Valley, and outlying areas of Gilroy (hopefully the garlic festival is back this year) and Morgan Hill.

Though the more prominent companies of Silicon Valley in Google, Netflix, and Facebook are not in the district.

ECA (profile) says:

Over the last 20

What has really happened?
huge amounts of people that HAD ideas created TONS of sites that did everything, we wanted.
Corps got pissy, cause they hadnt figured HOW to get ahead of the curve, Started suing Everything thing.
The movie/music industry WENT NUTS, and found something to blame for Loss of revenue, and tied up courts for YEARS.
Nations ran around in a hissy fit, Wondering HOW everyone could HAVE AN OPINION AND EXPRESS IT, and be anon.
The OLD internet went underground with all of its OLD ways of doing things, and HIDING.
Privacy, SAID to be a concern with every nation, WENT BY BY.

We opened a book on freedom of Expression and Found that REALITY even invades the internet, and we can now see the Core of what Everyone is.
What do the corps and gov. Want of the net? SOME CONTROL. They dont get that Part of that is being Anon. That many of our laws ASK the companies NOT to sell our data.
They want to control what they Think they see happening and that 90% of some of these problems Are created by corps thinking they know everything. Connect tot he net and find they have lost control of their own servers. They want to hide control of infrastructure connections, and Find that there is a security hole, and then BLAME the internet for something They did, or didnt understand HOW to do it properly.
Many things being shown as faults on the internet reflect back to HOW BAD our own reality is. If someone can connect to the power grid from the net, its reflects on US, that Some corp took allot of short cuts in building things. It reflects on our OWN infrastructure.
Love the idea in our nation of freedom of information. NOW we can get it from All over the nation. ASK 1 question and get 300 million answers.
The Bias you see is Ours. The hate you see is OURS. Everything you see is what we do to ourselves and those close to us.

We are no longer held in check by the TV, and by only what we can see. We can expand every book, by asking the authors, and they can get greater ideas for the NEXT book.
We can go look at contract history to the public and see the ramifications, and NOW we can publish and create Music DIRECT to our public, and ask for a Donation.
We can get Direct access to (at this time) most of the populus in the nation IF WE WANT TO KNOW.
Those people that Think knowledge should be shared, can NOW publish Plumbing information, and how to fix a faucet. Mechanics can NOw give you expertise on what to Fix, that Auto makers have SCREW’D UP in your car.(harley david twin cam, and many car motors did the SAME thing). REPAIR manuals you DONT have to buy. Computer expertise that you Couldnt get with 4 years of schooling, and 20 years of experience.

And in all of this, the gov. wishes to use a License to USE the internet? to tell if you are an ADULT and can get into porn sites? The credit card corps Kinda HAte the internet. They cant control or monitor things fast enough. They cant figure out how to see Every transaction, before its made.

The deeper you go, the bigger the hole. And they want to LIMIT how big it gets. Cap it off. Dont give access to things that you CANT purchase from a reseller in the USA. We are NOW an international market place, and China has some REAL good prices. Insted of buying from Local companies the same product, we can get it here in 2-6 weeks, at 1/4 the price. AND YES, we taught China the capitalist ways. As people Buy more, they RAISE prices. But our gov. has no control over international banking, and cant monitor how much you spend.

TKnarr (profile) says:

The biggest problem with privacy issues is that the Internet companies tend to give you Hobson’s choice: you either accept them doing whatever they want or you don’t use their service at all, even when it’s entirely possible for the service to work fine without collecting all that user data. Mostly that happens because they’ve settled on a business model that depends on selling that data for their revenue, without that they have no other source of revenue.

I don’t like the idea of legislating business models, it tends to be too easy to abuse that power. For these cases I don’t think it’s necessary though. Just legislate liability: any company that collects personal information is 100% liable for the actual costs or a statutory damage amount, whichever is greater, plus legal costs and fees for every person whose data is compromised where that compromise can be traced back to their collection of the data. That means that if company A collects data and sells it to a data broker and that data broker’s systems get compromised the data broker would be liable <i>and</i> company A would be liable. For companies it’s then a business decision whether the risks associated with collecting personal information are worth the costs.

Anonymous Coward says:

Re: Re:

The biggest problem with privacy issues is that [] companies tend to give you Hobson’s choice

Fixed that for you. If you’ve ever had to sign a contract to get dental work done, or to get in to see a doctor, get plumbing done, buy a car, get a job, many other things, you’ll have faced the Contract of Adhesion – take it or leave it.

And whether the contract exposes your privacy to data brokers or not depends both on the contract … and on the interpretation the lawyers for the company put on it. You can read one of those two….

ECA (profile) says:

Re: Re:

There seems to be a problem with privacy.
More corps (banks, bill collectors) WANT you to have privacy.
But its 2 edged. That privacy means they KNOW you have this and that, and can PROVE IT.
What would happen if we gave everything out to the crooks around the world. Could they Prove you bought this or that, and NOW have to pay THEM?
Your privacy is abit illusion. As it can restrict you.
If you are the poorest person in the world, and someone runs a credit card scam, the banks cant take your money, Can they?
Being the richest person, you would demand that they prove it was you. But thats not how it works in the USA. The corps Just goto the Judges and declare you did it.
If all our info was/is released tot he wild. What can the banks do? Do understand this as 1 of the Major credit agencies was HACKED. Most medical facilities have been hacked. There have been so many hacks, you could create a 200 page report on all the hacks and still not have all of them.
The Banks want you to think its still protected, but THEY share your info also.

That Anonymous Coward (profile) says:

"A platform company could also abuse gatekeeping power – to promote its own products and services, to lock in users from leaving for other platforms, and so on."

You mean like banning community broadband?
Like banning 1 touch make ready?
Like allowing them to lock specific buildings into 1 carrier options?
Like allowing them to lie about speeds, availability, uptime with no penalties?

Big Tech is the whipping child for the GQP whining that they have been silenced, while ignoring the real reason. They trained an AI to flag & remove hat speech… I couldn’t tell the GQP from NeoNazis.

Elected officials are used to having platforms that never challenge them, even as they are clearly lying.
Along comes Big Tech who kept hearing all about how fake news was so bad… so they started removing fake news… funny how that managed to "cancel" some GQP members.
The GQP hides behind the ‘its because I’m conservative’ sign, refusing to admit its because I am a spineless liar who will repeat whatever it takes to keep Trump from Primarying me.

Much like the 230 battle, the biggest problem is what people imagine it is about.
They refuse to find actual facts, preferring rumor & outright lies to support their position.
The government sucks at immediate solutions to immediate problems. (Patriot Act anyone?)
Because it is the rush to act first & maybe in 10 yrs decide it might have been bad but we’ve done it this long might as well keep doing it.

Once upon a time they would do studies & get actual data to show what drove their decisions, now its they picked on me we need to break them up!!!!!!

Maybe the simplest solution would be my bill that makes elected officials who lie get horsewhipped. (Yes I am well aware many of them probably pay sex workers extra for this on their private time) One has to hope that being called out & actually punished for lying might make some of them stop, otherwise we can all watch the must-watch tv spectacle of the televised whipping of the liars on friday nights.

If they can’t define the actual problem using actual evidence, perhaps there isn’t really the problem they claim. Maybe a few lashes will teach them to hold their tongue & think before they speak.

ECA (profile) says:

Re: Re:

Iv suggested to persons, that there IS’ Brain washing in the USA.
Based ont he idea that the only people thy vote for are those on TV. They dont look up the list of WHO is running.
Then, even with the internet, they dont look up a persons History and school records WHICH should be on the net, as they ARE public figures.(all our data has been lost to the net, why isnt theirs).
Almost every election has 1000 people running for President. But only those on TV ever get elected.

Then I suggest that the President is a figurehead more then anything, he is the last to Sign the bill, not the creator of the bills. That the other 500+ people we ELECTED, are the big ones to replace. But even state wide, whats your choice? Do you really have one.

Then a suggestion, Of something that happens with all us workers. WE get evaluated all the time and at least 1 time per year. LETS do the same with our elected. WE may not be able to get them OUT of office easily, but WE CAN dock their wages for being Idiots, and NOT giving Good customer service.

Anonymous Coward says:

I dislike the continued insistence that interoperability will be a massive boon and solution to a wide range of issues. Continually holding out and waiting until a "Protocols, Not Platforms" watershed moment comes along feels like it’d hurt more than help.

I’m looking at most public-facing attempt to create an open interoperable standard, Twitter’s Project BlueSky, and how next to nothing has come out of it except endless proposals being passed back and forth. That, and the fact that they were still looking for a project lead as late as January of this year and as far as I can tell they still haven’t found one, doesn’t give me much hope for new developments in that area any time soon.

In the meantime, other things are moving forward. Twitter looks to be pushing ahead with a subscription service called "Twitter Blue" and a "Super Follow" function that lets you access additional content from people you follow. This means payment processor companies will likely be getting more involved with Twitter to handle subscriptions and other stuff. And when payment processors get involved, adult content creators usually end up suffering.

eBay is making the move to stop the selling of a lot of adult content. Twitter is gunning for these paid premium features that may bring in payment processors that traditionally despise adult content. Apple’s anti-porn stance is becoming become more pronounced as time goes on, and this combined with their chokehold on what goes on iOS devices affecting companies like Discord (they had to change policies recently specifically for iOS and some servers would be inaccessible to users on iOS because of that), is shitty. All of this is getting people nervous that Twitter might do a Tumblr-style purge of all adult content on their platform.

There’s a likely scenario where Twitter decides to nuke all adult content, and then sometime afterward finally goes through with a proposal for BlueSky. Decentralization occurs, and Twitter users can now go wherever and do more, including making/sharing adult content again. Adult content creators with years of work building a following and a porftolio on Twitter that got tossed out by a Twitter porn purge would be rightfully pissed.

What I’m getting at is this: Holding out for interoperability and decentralized protocols to swoop in and save the day has its own set of problems. The lengths of time and endless deliberation to get these projects off the floor leaves room for shitty policies to be enacted in the meantime and no way for people whose livelihoods were harmed by those shitty policies to recover everything they lost.

NaBUru38 (profile) says:

"But it is a mistake to treat privacy largely as a competitive problem with competition-focused remedies."

I’d rather say: It is a mistake to socio-economic issues largely as a competitive problem with competition-focused remedies.

Car seat belts were optional, and most people refused to pay for them (not to mention wear them). Same with airbags.

Competition doesn’t prevent people from eating junk food, much less avoid casinos.

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