New Year, New Congress, New Tech

Will Rinehart raises concern over whether or not members of Congress should be more tech savvy. 

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After the “blue wave” that propelled Democrats to a majority in the US House of Representatives, Paul and Matthew invited tech policy expert Will Rinehart to join them as they suss out the implications for new legislation of emerging tech. While a split Congress often struggles to find bi-partisan agreement on major policy initiatives, there is a growing sense of unease in Congress in regards to internet privacy and social media monopolization.

Unfortunately, sometimes the cure can be as bad or even worse than the original problem. Some of the proposed regulations could handicap American tech companies in similar fashion to how new digital copyright and privacy rules have hampered the European digital economy. One of the most worrying trends is a prediction from last year come true, that the hollowing out of Section 230 of the Communications Decency Act, which has long protected online platforms from frivolous lawsuits and charges, was so weakened by anti-sex trafficking legislation (SESTA/FOSTA) that Congress will continue to carve out exceptions in other areas.

Will Congress need more tech expertise moving forward? What does the new Congress mean for innovation? What Section 230 of the CDA? Are big tech companies traditional monopolies? Do we need more transparency when it comes to big tech companies and what information they gather about us?

Further Reading:

Comments on Developing the Administration’s Approach to Consumer Privacy, written by Will Rinehart

Tech Expertise in Congress, written by Will Rinehart

Related Content:

Will EU Copyright Break the Internet, Building Tomorrow Podcast

How the FOSTA Rules Create a “Bootleggers and Baptists” Scenario for the 21st Century, written by Paul Matzko

Practical Problems with Regulating Tech in the Public, written by Will Rinehart

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00:05 Paul Matzko: Welcome back to Building Tomorrow, a podcast where we talk about how tech and innovation are making us healthier, wealthier, and wiser. Okay, maybe not wiser. We’ve all seen the caliber of intellectual that gets millions of followers and a blue check mark on Twitter these days. But today, Matthew Feeney and I are joined by a man wise in the ways of DC tech policy, Mr. Will Rinehart, the Director of Tech and Innovation Policy at The American Action Forum. Welcome to the show, Will.

00:32 Will Rinehart: Yeah, thanks for having me.

00:34 Paul Matzko: So Will, you have an extensive biography working on tech issues for various and sundry…

00:40 Will Rinehart: Yeah. About a decade now. A little over a decade, yeah.

00:42 Paul Matzko: I mean, everything. I saw tech freedom, internet law and policy foundry, Mercatus Center and some advisory boards for the FCC.

00:50 Will Rinehart: Yeah, advisory boards, the FCC, CAC, formerly worked for an organization that was called the Progress & Freedom Foundation. It’s actually kinda how I got my start in all this. I was an intern, so I was a lowly intern in 2009. I was coming actually to this building right when it was finished and talking to other tech nerds. So yeah, I’ve been in this for a little while, and I’ve been studying and doing economic analysis, and that’s kind of my background. So, it’s been an interesting decade so far.

01:25 Paul Matzko: So, spending a decade in this kind of insight about what tech policy locus. Have you seen Congress, your median congress person over the course of those years, do they know more about tech now? Are they more tech savvy now than they were a decade ago? And maybe you can talk about the preconceptions that the ordinary American Joe Blow public have about Congress, like Congress people when it comes to the technology.

01:54 Will Rinehart: Yeah, just like anything else, there’s a high amount of variability when it comes to Congressional members relating to their knowledge in tech expertise. I think there’s probably a couple of different ways to think about this. One is to obviously when you’re talking to Congress members, you’re not really talking to Congress members, you’re talking typically to their staff. And staff typically do have a pretty decent knowledge and expertise of tech issues, generally speaking. I would say, especially ‘cause a lot of them are pretty young. The Committees of Jurisdiction that are important here, so like Energy and Commerce, and typically Judiciary, I think they’re pretty well educated. And I’ve actually had a couple of pieces on this and kind of thinking through if we really do need more tech expertise. And I tend to think that those Committees of Jurisdiction actually do a pretty good job, all things considered. But I’m also, when it comes to this kind of tech expertise, and I know there’s been a lot of criticisms of Senator Lindsey Graham, and I’m forgetting who else recently was criticized for some of this, but Michael [02:56] ____ was criticized for this recently.

03:00 Will Rinehart: I think that one way to think about this kind of relationship between Congress and technology is also to realize that fundamentally congressional members and their staff are also very communication heavy as well, which I think is very, very important. So when there’s criticisms of Zuckerberg, people want a very astute, very narrow vision of what that tech… There’s this narrow vision of what that tech criticism from Congress should look like, and yet people often ask Zuckerberg, or they’ll ask, for example, Pichai, who was recently, this is Google CEO. “Oh, look at my Google rankings or my Facebook rankings.” But I think that actually is evidence of a very important fact of Congress, which most people don’t recognize, which congressional offices have this dual role, which is not just technology and assessment and talk policy assessment, but also, they’re political actors who are using these tools.

04:00 Will Rinehart: And so that’s the reason why they care about these in more mundane, like SEO type of ways, and that’s Search Engine Optimization. Why they care about it from a marketing perspective, which I think, to a lot of young people, millennials like myself, really just feels weird that they’re worried about these kind of placements within Google or placements within Facebook. But again, these are tools that they use. So these dual roles of both use, but also they see how other actors are using their visages and their likeness online. So, I think there’s this more interesting pull and push with technology that is a little bit more complex than a lot of criticism, which is that just generally the congressional members aren’t very educated.

04:46 Paul Matzko: And they feel like they can be pretty perform… It can be performative at times where…

04:50 Will Rinehart: Very much so. Very much so.

04:52 Paul Matzko: You’re a senator, you don’t wanna seem… You wanna seem like you know what you’re talking about, but you don’t wanna seem too tech savvy, ‘cause remember, your median voter and perhaps your median constituent donor is going to be a little bit older. The whole “kids these days” thing plays well with your constituency.

05:09 Will Rinehart: Yeah, exactly.

05:09 Paul Matzko: So by saying stuff like, “Oh, my grandson was showing me this on the Facebook there.” [laughter] It’s a way of… That’s a performative playing to an audience.

05:18 Will Rinehart: Exactly.

05:19 Paul Matzko: And so we see that as some people in our 20s and 30s and say, “These dunderheads don’t know what they’re talking about.”

05:24 Will Rinehart: Exactly, yeah.

05:25 Paul Matzko: But they’re doing a political performance. Yeah.

05:27 Matthew Feeney: But I do think part of the problem is that when you say something like technology policy, you might as well be saying something like economic policy.

05:35 Will Rinehart: Yes, just so very much so.

05:36 Matthew Feeney: It’s just such a huge broad thing. So the meetings that I’m sure Will and I have will be staff. You say, “Well, my boss wants to fix X problem, or is worried about X.” Right? And that can be a whole plethora of things, but it turns out that, at least speaking for myself, I have people with humanities degree sitting around a table in Washington with other typically, other humanities degree people, lawyers, there aren’t too many actual full-on technologists working in a lot of these staffs. And they’re thinking a lot about law and policy, and I think that’s a big challenge. And some people have discussed, “Well, one, should Congress and the government make a push to actually make sure that congressional staff can hire actual technologists, more computer scientists? And secondly, are we sure that would even make much of a difference?”

06:25 Will Rinehart: Yeah, and these are two… This is a huge, huge question, this is something that I’ve been thinking about a lot recently, especially with this kind of push, especially in the last Congress for more tech expertise, and it seems also that this is gonna be a big thing for the Democrats in the House this year. They have even the original… The rules, which I think were just… The House rules which I think were just adopted, I think yesterday.

06:52 Matthew Feeney: Yesterday.

06:52 Will Rinehart: Yeah, part of it includes this provision to basically modernize the tech element or at least to modernize some tech elements of the house. So there is this concern that perhaps some members don’t have the technical expertise. There’s two things I would mention about this, or at least one broad thing I would mentioned about this tech expertise issue, is that the more that you get… I think that there is a worry by people who are thinking through this tech expertise, there is kind of a balancing act here. There is clearly a worry that yeah, of course, that members probably don’t have the technical computer science degrees when they’re thinking through some of the legislation, and that does create a problem when you’re actually writing real legislation that’s gonna be impacting these. But then again, I’m also of the nature that perhaps the fact that you don’t actually know as much about the technology makes you a little bit more humble in what you’re gonna be able to do, and your likeliness and your likelihood to regulate.

07:52 Paul Matzko: Humility on the hill. [chuckle]

07:54 Will Rinehart: Yeah, yeah. And then kind of with thinking through that, I mean, do we… I don’t know… I really don’t know if I want to give Congressional staff… I don’t know that it’s the best thing to give congressional staff all the expertise in the world to understand how to prohibitively regulate every single technology that they encounter. That to me seems to be a bit of a problem. And again, we don’t see this with every single technology anyway, you don’t… You do have some congressional staff who know a lot about, for example, like oil and energy, but you don’t have the tech… You don’t have petrologists on staff doing that kind of work as well.

08:32 Will Rinehart: So, I don’t know, there’s this push and pull for me on these issues, and one of my big things for 2019 is to not really… Is to not succumb to binaries that say we need X, or Y, or this thing is good or bad. You can have both elements of the same thing. So the push for tech expertise, I think we should also recognize that the more tech expertise that you get, there may be some beneficial outcomes, but there’s also probably likely to be some pretty negative outcomes, which means more legislation and the things that I think could be very detrimental, especially to permissionless innovation, which I think is a big key thing that is going to be a key issue in 2019.

09:11 Matthew Feeney: So, you mentioned that… Mentioned the word “yesterday”, we should note that we’re recording this on January 4th.

09:18 Will Rinehart: Yes.

09:19 Matthew Feeney: Yeah, so the new Congress was, or the House was sworn in yesterday.

09:23 Will Rinehart: Yes.

09:24 Matthew Feeney: So looking at the incoming new folks in the House, and also perhaps also the people who have left, what does the incoming class mean for innovation and technology policy broadly? Have some of these new people said anything interesting, or is it too early to tell?

09:47 Will Rinehart: I think it’s a little bit too early to tell. For various reasons I seem to have been following a lot more with what’s happening in the Senate, just because it seems like some of the senators have been a little bit more outspoken on some of these. Alexandria Ocasio Ortiz, I always forget.

10:07 Matthew Feeney: Cortez.

10:08 Will Rinehart: Cortez, I’m sorry. I always, again, we were just joking about this, I always see her as AOC now. So, I am always like…

10:15 Matthew Feeney: The AOC.

[laughter]

10:16 Will Rinehart: Yeah. She seems to be pretty, or at least interested in doing some dancing.

10:22 Matthew Feeney: Yes, dancing. [laughter]

10:24 Will Rinehart: Well, so I assume she wants to probably regulate big tech giants. So that type of element seems to exist within a lot of new House members in the same way that you’ve seen some of the old leadership also within the Senate and in the House. You’ve seen a lot of the mentions of potentially regulating technology companies. I mean, that’s a pretty broad, again, as we kind of laid out here, that includes a whole bunch of different things which I know we’re gonna get into.

10:57 Will Rinehart: There is… Hopefully however, there is some positive things from the new Congress, which is that we do have a bit of a younger, at least in the House side, we do typically have a bit of a younger element which I think could be a little bit more interesting, that could turn out kind of bad in the sense that there is a bit of a… Especially for our generation, there is a little bit more negativity towards these kinds of tools than I think is probably warranted. But there’s just generally it seems a bigger appetite for the first time in really the majority of the time that I’ve been working in this space. There’s… I feel like this Congress, there really is just a bigger appetite to do something and really anything on tech, and that includes a lot in privacy, in AI regulation and a whole bunch of other spaces and broadband. It just seems perhaps because a lot of the other low-hanging fruit has already been picked, but also that it seems to be much more of an issue, a topic in hand, especially regulating tech companies.

12:01 Matthew Feeney: I’d like to get your thoughts on what I think many Americans view as the biggest tech news of the last year, especially as it relates to Congress. So many people remember that the CEOs of the big tech giants were hauled before different committees for hearings, and these big tech giants have been at the forefront of debates that seem to be happening about namely so-called censorship, but also anti-trust is another thing. And this has actually, I think, raised a really interesting opportunity to talk about the legislation that allows the internet to work as we know it. So Will, could you actually explain to listeners who might have been in headlines, heard of Section 230, which seems to get discussed all the time. What is that? What does it do, and why does it seem to be cropping up so often in these kind of conversations?

13:03 Will Rinehart: Yeah. So, Section 230 is actually a specific section of what was called the Communications Decency Act, which I think it was either 1995 or 1996. I always forget this one. I think it’s 1996, yeah. CDA, and it’s literally CDA Section 230, was part of a bigger legislative package that really came about because of the Telecommunications Act of 1996. And so these two Acts came together, and Communications Decency Act itself had actually a lot of elements of effectively controlling various elements of the internet to make it more family friendly, and a lot of that was basically kicked out at the Supreme Court level in a series of really important cases.

13:51 Will Rinehart: But what since has survived is this section 230, which basically it limits the liability of these platforms, these large platforms to any content that is going on their network. Originally, it seems it meant really to apply to ISPs, but the way that it’s written, it seems to apply to ISPs and content providers. I mean, it does apply to both ISPs and content providers. And really what it was allowed and meant to do is really for these network providers, both ISPs effectively and these large content players that we now know as Facebook and Twitter and Google. It allows them to do a bit of editing but also doesn’t necessarily require them to go after every single element of potentially nefarious content that’s going through their networks, which there is some interesting elements obviously that I think could change in this next Congress.

14:54 Will Rinehart: I should say that this… And it’s generally considered it’s called an intermediary, it’s intermediary liability such that the network itself is not liable for the content that’s going across the network. That however isn’t an absolute though, and it should be noted that there are a lot of carve outs to that. Copyright is carved out from it so that you can’t… They have to, they have due diligence, they’re required to do due diligence on these copyrighted elements. Recently there was a change to the law that effectively allowed these content that potentially could be used for sex trafficking, and this was FOSTA-SESTA, last year. So there are some carve outs to the law themselves, but there is a bigger, broader question about CDA Section 230, and whether or not we should generally change it, and it’s potentially a big, big operational change.

15:51 Matthew Feeney: Yeah, I think it’s perhaps worth noting that these kind of discussions on 230 have emerged out of debates about interference in our elections, people upset about bots. And I believe one of the original drafters are the supporters of 230. Senator Ron Wyden has actually expressed openness to this kind of stuff. And I don’t think it’s hyperbolic to say that Section 230 really does allow most of what we view as social media to exist. I think what Will’s saying… Maybe an example would be good. So if you post illegal or harmful content on your Facebook wall, Facebook can’t be sued or have action taken against them because of that, which is different than if Will wrote something libelous in a newspaper, that would be a different kind of proceeding. Is that right?

16:54 Will Rinehart: Yeah. Generally speaking though there was a lot of case law that comes into play here, so this isn’t… I would say that generally speaking that that’s correct, however there is again, there’s a lot of case law that goes behind this, which if you would really wanna do an in-depth review, I would suggest that would be actually a really interesting podcast. [laughter] I however am not a lawyer, a Section 230 lawyer, but that space is… The big question I think that people are trying to grapple with right now is whether or not certain kinds of effectively state law torts, which exist out there right now like defamation, false light, public disclosure of private facts, if those type of things should get, not a carve-out, but should also now be included such that the large providers, the large intermediaries as they’re known, they should be effectively liable or have to have some element of taking this type of content down.

17:53 Will Rinehart: There’s also, I think, kind of an interesting… Again, there’s other interesting potential carve-outs. One of them would… And I know that this has been talked about, is something related to opioid, the opioid epidemic. So if there’s any material… I forget exactly what the… How that this bill would be defined, but the conversation basically is, “Well, we obviously have these opioid problems, there’s… But it seems that a lot of this happens in online spaces where you have suggested advertisements from some doctors.” It may happen for example, in some groups within, say for example, Facebook or Twitter or even on Google. And so, the idea is then to attack the opioid problem through that by making it such that these platform providers have to go after these, some of these, what it seems like there’s online opioid… I don’t wanna say peddlers but, uh…

18:57 Paul Matzko: Dealers?

18:58 Will Rinehart: Yeah, something along those lines. So yeah, I mean, there’s a lot of conversation about changing this. Again, I don’t know. I don’t really see. I mean, there’s a lot of really interesting cases that are related to this that test really the waters on a lot of Section 230 issues. I also, I mean, generally, I think that the fact that platforms haven’t really been required to be liable on a lot of these things has led to a general flowering of the internet and has increased content pretty dramatically, and has given America its own… Has given America, really a leg up in this. I also really do worry, because having spent a number of years, and I’ve done enough traveling to Europe and talked to enough people in the UK, to know that a lot of times, when you’re talking about these defamation lawsuits, it really is a… There’s some really unfortunate cases in Italy and some unfortunate cases in Germany that some of the defamation cases are far more political in nature, so it really undermines political conversations and the political free-flowing flowing of thought. So, I don’t know. There’s a lot to… There’s a conversation to be had here about Section 230, but I also really do worry about our efforts to try to get rid of the censorship problem or try to root out the censorship problem through Section 230 modifications.

20:30 Will Rinehart: I think our… Actually, our first article for the Building Tomorrow column that we have on libertarianism.org, was about SESTA-FOSTA and the unintended ill consequences that… This was on the front-end, right before or right as it was passing.

20:44 Paul Matzko: Yep.

20:45 Will Rinehart: And, part of the concern was we’re gonna puncture a new hole in Section 230. And there already were some carve-outs for copyright and whatnot.

20:53 Paul Matzko: Yeah.

20:53 Paul Matzko: But, a lot of content moderation beyond copyright was, it was frowned upon. The idea was that if we make an exception, say, “Well, because we’re so worried about sex trafficking, we’re gonna weaken this kind of protection for platforms.” Well, what will be the… It sets a precedent. People will start arguing for other carve-outs.

21:14 Will Rinehart: Yep.

21:15 Paul Matzko: And, and then also, the unintended ill consequences. We’ve already seen a lot of that come to light. It doesn’t look like it’s been very effective at actually combating sex trafficking, and it’s been very effective at basically removing prostitutes from advertising online, shutting down forums that prostitutes use, which then actually shoves them into a black market, which they’re more likely to be out on the street, rather than advertising online, so lots of ill consequences on that end. But, I think the concern here, I think it’s interesting to bring up proposals for new carve-outs.

21:52 Will Rinehart: Yup.

21:52 Paul Matzko: We’re already seeing that in possibly, in 2019, that, well, because in SESTA-FOSTA, we punctured a hole in 230, why not do so for opioid dealers online?

22:01 Will Rinehart: Yeah.

22:02 Paul Matzko: And if that goes, why not this? Why not that? Why not… I mean, you can see the kind of a slippery slope.

22:08 Will Rinehart: Yeah. I mean, Joe Manchin has… Senator Joe Manchin has suggested this. Incoming Senator Josh Hawley has said that we need to take a new look at Section 230 and concerns about de-platforming. Ben Sasse, Senator Ben Sasse for being an interesting senator, and I think he’s… He often provides sometimes a balancing act. He, himself, has also suggested that perhaps we should be talking about de-platforming as well. So, or that, what this relationship between Section 230 and de-platforming and really what can be done at least at the federal level. So, Ben had a, had an op-ed about this, not too long ago, I’m fairly certain. I think it was in the… On NRO. But yes, there is this…

23:00 Will Rinehart: I mean, there is a very real, and oftentimes, this slippery slope fallacy isn’t really particularly great to go down. But, I actually do think this is one of the few cases where we’re seriously talking about changing this kind of fundamental law. Also, at the same time, not just to say too much about Republicans, like Josh Hawley and Ben Sasse, but again, Manchin and Mark Warner has also talked a little bit about this. His white paper that had a long list of potential regulatory bills, which was, I think it was 15 pages, and included something like [chuckle] 20 potential regulatory bills that could be out there, which was just to me a little shocking. But he also talks very much about this, about perhaps state torch. And as I mentioned kinda earlier, perhaps state torch should have carve-outs here within section 230. So, it’s an important, I think a really important thing to be watching for this year.

24:01 Matthew Feeney: But the Warner paper, if I recall, was it sometime over the summer, right? August?

24:08 Paul Matzko: Yes, yeah.

24:09 Matthew Feeney: And, but some of it was just, it seems to me, just unworkable, given the Constitution of the United States. But this sort of, the…

[laughter]

24:17 Will Rinehart: Yeah, yeah. That whole thing. Yeah.

24:18 Matthew Feeney: But the introduction of something like a European Right to be Forgotten, and of course, the staff will say, “Look, hey, we’re just toying with ideas here.” And maybe it’s worth… I think it’ll be good to get Will’s thoughts on all of this talk about what we’ve been discussing. Solutions to problems, right? Some that might be imaginary and some that might be actual, right? So…

24:42 Will Rinehart: Yes. Yes. What are those?

24:43 Matthew Feeney: Right, so some people are concerned about these big tech companies or monopolies. People are worried that these tech companies are violating our privacy. Some people are worried that these big companies, for all intents and purposes, are the public forum and are censoring whole swaths of the American political commentaria. So we’ve talked a little bit about the regulatory pushes that some members have, but are they swinging a ghost here, or… I don’t know what the metaphor I’m looking for is, but are these actual problems that Congress should be dealing with?

25:22 Will Rinehart: That’s never stopped Congress…

25:23 Matthew Feeney: In 30 seconds or less.

[laughter]

25:25 Will Rinehart: Are these problems? That’s never really stopped Congress from trying to enact policy and legislation based on perceived problems. You hit on at least three different ones here. One of them was the monopoly question, which I think is really big. Another one is this privacy question, and then another one is obviously this public forum, which I think kind of relates to the question of censorship just generally speaking. You know, monopolies, I’ve written a lot about the question of monopolies. And you know, I have, in like two weeks, I’m gonna do a talk about this question. Monopolies, it’s really a difficult question when you look at, at least some of these major platforms, when you’re talking about monopolies in the traditional sense, because typically, when you look at monopolies… Okay, you’re looking at a monopolist who is raising prices to effectively decrease input. You don’t really have to… When you’re talking about a platform, on one side of the platform, you really don’t have any prices, per se.

26:24 Paul Matzko: Right. Facebook’s free.

26:26 Will Rinehart: Yeah.

26:26 Paul Matzko: Yeah.

26:26 Will Rinehart: Facebook and Google are free and Twitter is free, so you don’t really have the traditional monopoly problem. And, you get to, “Well, okay.” But there’s only effectively a single provider in each of these spaces. But then you ask, “Okay, well then if there’s only a single provider, then what you’re actually competing on is advertising,” for example. So perhaps the monopoly industry is advertising, but there’s good reason to believe that in that, and there’s some really interesting NBER research on this, that the more effectively when it comes to online platform. So first off, you have to consider the fact that online advertising is not the only version of advertising. There’s TV advertising, radio advertising, newspaper advertising is just dwindling, but it’s still there. So you look at all advertising. Okay, still… I forget the percentage, but it’s still not, it’s not still not the absolute majority. And even if… When it is the…

27:23 Will Rinehart: When you are considering still digital advertising, and it’s still… The question is, is well, okay, Does the current structure increase prices and decrease the benefit to the other side? Is there some kind of impact to the consumer of advertising that we can solve? And when you start asking questions of remediability, what is the problem of advertising that we’re trying to solve within this bigger monopoly question? That, again, is not really an easy answer because the more… Interestingly enough, the more concentrated a platform is, the more information you have about all of the users and because you have… Because you’ve effectively solved this kinda weird asymmetry problem, you actually do have better advertising prices for more and broader platform. I can send this report to you guys if you’re interested. I actually was very, very intrigued by this.

28:16 Paul Matzko: Yeah. It’s still linked in the notes. Yeah.

28:17 Will Rinehart: Yeah, and so, the monopoly question is… It’s not easy. It’s not an easy question and I don’t wanna take too long on this point, but the FTC has been grappling with this question of, “Well, what does monopoly really look like in kinda these big platform providers?” I think they’re now on their, I wanna say eighth or ninth of these hearings, but they spent the majority of 2018 and I was watching a lot of them, going through these hearings, and asking, “Okay, what are the monopoly questions that we’re talking about with these large platform providers?” And it’s not clear. It’s really not as clear as I think we would hope. And then the other problem is, “Well, what do you do about it?”

28:54 Paul Matzko: Well, and add to that question, we had Mike Masnick from Techdirt come on a couple of episodes ago, and the irony is that sometimes, efforts to combat this perceived monopoly can actually backfire and entrench monopoly. So he noted that the EU’s digital copyright scheme, which among other things, whether you call it link tax or not, part of the intent was to take power from, or market share, from big aggregators like Google, when it comes to showing Google News and clips and links to articles, and trying to shift that digital advertising market back down to the papers themselves, to online papers. But the net effect of the rules, even in the few short months since the rules have been proposed, and parts of it has been passed by the EU, has been to actually shift more power to Google. It’s actually… The thing meant to erode their monopoly has actually empowered this monopoly.

29:58 Will Rinehart: Yes.

29:58 Paul Matzko: And so we have to be cautious when we get to questions of like, “How can you try to regulate against natural monopoly?” Are you just gonna end up fueling the beast? And it’s an open question. I mean… What’s been proposed here? And so, we’ve had hearings in Congress and they’ve drug a bunch of reluctant CEOs in front of them and it all makes for, I guess, decent television, but it’s maybe for television content.

30:21 Will Rinehart: Yeah. It’s pretty good.

30:22 Paul Matzko: What’s actually being proposed? What are they talking about doing? So far, it’s just been a bunch of show.

30:28 Will Rinehart: Yeah, yeah.

30:28 Paul Matzko: Not a lot of substance.

30:29 Will Rinehart: Yeah. Probably the most important piece and probably the one… So there’s a couple… When we were talking about privacy legislation, and it should be noted, there’s a bit of a… Even though these are obviously very associated, there’s… I think it is important to separate out this privacy question, and privacy concerns, which really are GDPR and CCPA, which is the California Consumer Privacy Act. Those types of pieces of legislation really need to be separated from these larger kind of anti-trust questions. Even though when we talk about anti-trust and monopolies, the big tech platforms tend to get just kind of thrown in that bucket. Now, obviously, we haven’t seen a lot of legislation because currently we’re in, I think, the second day of the new congress.

31:18 Paul Matzko: Yeah, yeah. Give them time, give them time.

31:19 Will Rinehart: Yeah, of course, of course. But there were a couple of pieces of legislation that came out towards the end of last year and throughout the 115th Congress, which was the last Congress. Senator Brian Schatz had a bill, which was called the Data Care Act of 2018. That, I think, was… As far as the overall pieces of legislation that have the possibility of passing, that, even though I think it does have some problems, that is probably… That does have, it seems like pretty broad buy-in. There’s about 15 different senators who have bought into this. So there’s 15 different co-sponsors. I wanna say that it is bipartisan with the co-sponsorship, but don’t quote me on that.

32:02 Will Rinehart: Still, Schatz has really, has shown himself to be hugely important in this space. He’s a senator, he’s… I think, generally, I find him and his staff pretty knowledgeable about these issues and they’re… While, again, while I disagree, I think that piece of legislation, the Data Care Act of 2018 is probably among the most important to be watching. So, there’s a couple of things it does, but the main thing it does is it creates this kind of, this new set of duties. So, it creates a duty of care, a duty of loyalty, and then a duty of confidentiality. And even though he doesn’t say it within the piece of legislation, the name for this is called an information fiduciary and this is an idea that a law professor named Jack Balkin has been pushing for quite some time, and Tim Wu has been pushing and [32:49] ____ have been talking about this idea of an information fiduciary. So, this is really, I think, probably the first piece of legislation that really exemplifies that. Again, this is on the Senate side.

33:00 Will Rinehart: The other one that, I think, again, it has problems, it’s another important bill to be watching is the Browser Act because… And we’re still waiting to see how it kind of separates out, but it seems as though, Senator Blackburn, who was previously last Congress Representative, is now a Senator. She is probably gonna be on the judiciary and that means that it looks like she’ll probably be pushing the Browser Act within the Senate. The Browser Act really creates a lot of opt-in requirements for data collection and kind of goes towards more of like an opt-in data collection realm. So it’s a little bit… So, while Schatz’s bill is a little bit more focused on these kind of information fiduciaries and creating these new duties, duty to care for, like I said, duty to care, duty to loyalty, and duty to confidentiality. Hers is a little bit more focused on these opt-in and data collection questions, so it’s a little bit of a different perspective and a little bit of a different approach to each one of them.

34:00 Will Rinehart: And of course, there are some other senators and again, a lot of this work has been done in the senate so far just because they have been thinking about this for, I think, for a little bit longer and also, there just hasn’t been as much mix-up in the leadership, but there’s also a, it seems like… And maybe I missed it, but it seems like there’s also a bill coming from Wicker and… Senator Wicker and Senator Blumenthal, so that would be bipartisan legislation as well. That, some of these proposals really do worry me pretty extensively because I think the real big impact, which is what you’ve seen in GDPR, is an entrenchment of the biggest players, because it creates, as one of your colleagues, Julian Sanchez, said, “It’s a consent monopoly.” It really does require these platforms or it requires the entire system to be run on consent. You have to have opt-in approval that you have to say, “Yes, I want this to happen to my data.” And because the biggest players are the ones who can consistently get that consent, they’re the ones who have access to the information, whereas, the new entrants, the people who potentially could come in and disrupt those big tech providers really are gonna face bigger hurdles. So, there are clear impacts to these laws, if they actually do get passed.

35:14 Matthew Feeney: There’s also the so-called Internet Bill of Rights that’s been proposed by, I guess, Congressman Khanna, right?

35:24 Will Rinehart: Yes.

35:25 Matthew Feeney: That includes some of this opt-in stuff. But, and given that the Democrats now have the house, do you think we’ll see movement on those kind of proposals?

35:38 Will Rinehart: The two things that, at least, on the tech front, that the Democrats have talked pretty extensively about are broadband development, and rural broadband development, at least this is what they’ve said to some of the media that I follow pretty closely. The two big things are just the rural broadband development question, and then the other one is privacy and just doing something on privacy. So the end package, I think, is gonna be interesting to see because it could combine a lot of these efforts. It could take a little bit from the Browser Act, and sort of the opt-in approvals. It could take a little bit from the information fiduciaries. It could take it a little bit of these, the Bill of Rights from Rep. Khanna and kind of mix them all together and see, kind of create an American version of the GDPR, which I know that a lot of people want. There’s obviously a lot of problems with some elements of the GDPR, but there’s also a lot of organizations and advocacy organizations who are really pushing for a comprehensive, as they call it, a comprehensive baseline legislation that effectively creates one law to rule them all [36:41] ____.

[laughter]

36:41 Will Rinehart: Yeah, no, no, no, not at all. Not at all. And what we’re faced with on the other side is a very real deadline, which we haven’t really mentioned at all and I’ve kinda hinted at, which is California. California has a law. It has CCPA, it has a… It has really the first privacy law proposed by any state in the United States. It will come into effect in 2020, so the beginning of 2020. So we have potentially one year to do something, federally. There’s really big problems with that law itself. Just in definitions, it’s about 10,000 words long. It’s among the most complicated pieces of legislation I’ve ever seen. It’s pretty poorly written from, and a lot of… They’ve already had… I think that about every… So, it was passed in June. Yeah, let me see here. My notes say June 28th, CCPA was passed. Within a month or within two months, there was two major amendments that were passed to it.

[chuckle]

37:44 Will Rinehart: And they’ve been amendments and proposing various amendments ‘cause of just, I think clearly, how poorly it’s written and how it’s really not been thought through. And we’ll see. I mean, there is… Unfortunately, there is appetite for other cities. New York City has said that they want to create their own privacy, so that means New York City would have privacy and California would have privacy. We assume probably Hawaii would probably do this. Illinois, my home state would probably do this. Washington, Oregon…

38:13 Paul Matzko: Who’s gonna be able to keep up with this patchwork of privacy laws against big incumbents and the small insurgents are gonna have a hard time. Yeah.

38:21 Will Rinehart: Exactly, exactly. The big players will be able to do something. They’ll be able to deal with it, I think pretty… Not easily. They’ll have to spend a lot of money to deal with it, but they have the money to deal with it…

38:32 Paul Matzko: The competitive advantage though, really.

38:34 Will Rinehart: Exactly. But it also affects a whole bunch of industries that you wouldn’t think that would be included, like retail would be included in this, Walmart would be included in things like this, and basically anyone that’s doing any work on data at all. Any company that does any… Stores any information related to data.

[chuckle]

38:52 Paul Matzko: Who doesn’t? I mean, right. That’s crazy. It’s crazy.

38:53 Will Rinehart: That’s what I don’t think that consumers and people who are really pushing for this understand, that if you’re in a modern business context, every single company has some sort of data and if you have to abide by all of the potential regulations that… Or I shouldn’t say potential regulations because we really don’t know. I wanna say to this that… I was talking to a company and they said that they don’t know if they can even… You know, I’m not gonna say who they are, but they said they don’t even really know if they can comply with this. They’ll be defensible, but they don’t know if they can comply because the law itself can’t be complied with.

39:31 Paul Matzko: It’s so vague. Oh, oh, yeah.

39:32 Will Rinehart: Yeah. Yeah.

39:33 Paul Matzko: Contradictory even.

39:33 Will Rinehart: It’s just there are so many conflicts within the law that you can’t even comply with it.

39:37 Paul Matzko: Wow, yeah.

39:37 Will Rinehart: You can’t do two things at the same time. So they’ll be defensible. And I think that’s what a lot of companies are looking to be, is defensible, but not compliant, and that’s… I think that’s a big, big issue.

39:47 Paul Matzko: There’s a lot of the lawyers who become really wealthy defending those [39:50] ____.

39:51 Will Rinehart: And it’s of course a whole bunch of lawyers who helped to write the law in California and a whole bunch of the class action lawsuits, which are a big, big question within California because it kind of opens up the door to… It opens up the door to pretty huge class action lawsuits which of course the plaintiffs’ bar really, really likes. So yeah, there’s… This opens up a really… To me, a very worrisome bag of worms that I really just… I hope we kinda deal with them and federal legislations are probably gonna have to be… Unfortunately, the way we deal with it.

40:27 Paul Matzko: So I think our listeners are going to share a lot of those apprehensions and we have been very focused on social media, online platforms, kinda that’s been our tech focus here in the conversation so far. But I’m also interested in picking your brain, Will, about potential overlaps. So, if you’re a libertarian or just libertarian loving listener to this show, what aspects of overlap are there with the newly empowered, like Representative Khanna is a very progressive representative. And there’s gonna be a greater willingness to regulate things coming out of this tech regulation of this Congress. Are there areas of overlap where you can see more libertarian leaning folks and tech progressives, like Khanna and others, where we share interest? And maybe this isn’t online.

41:19 Will Rinehart: Yeah.

41:20 Paul Matzko: Digital content, but it’s… I don’t know, with driverless cars, or encryption or drones or… Are there areas where we can see stuff that libertarians can say, “That’s good regulation on the horizon that we can work across kind of ideological divide on?”

41:34 Will Rinehart: Yeah, I think that, generally speaking, the goals are… I think that, for a lot of progressives, that the end goal is innovation. Now, I think there’s a big disagreement between, effectively, I don’t wanna do this is as an us and them, but between us and them on how we get there.

41:49 Paul Matzko: Yeah.

41:51 Will Rinehart: I’m hesitant in the general communication, advanced communication and tech space, I’m… I think that the history of tech regulation really speaks to the problems of this kind of regulatory solution-ism and I do see a lot of people on, that are… That they consider themselves on the left, or would be considered leftist or progressives, who really do kind of ultimately believe in that, that smart regulations really, really, really can create better outcomes. But there are other countries, and I think that the big thing to look at are, is countries, and especially I think the European Union, really is kind of the big foil to the United States in this, that they are… There’s… Again, the European Union provides an example of what kind of the solution-ism, the regulatory solution-ism mindset would really get to you. So, while I think that we generally agree that we want innovation, and that we want a robust civic society, and that we all agree that we want to generally empower people with technology, I think there is a very big and divergent view, and I hope that people would understand there’s a big and divergent view between those two places when it comes to the means to doing it.

43:12 Will Rinehart: I would much rather see, perhaps more transparency, so you have disclosure over the kind of information that is generally collected. I’m not particularly opposed to those sorts of things. Transparency about what is being known about you. But at the same time, when you do look at how consumers interact online, they tend to go towards these larger platforms because the larger platforms actually do give them the accessing ability to do change around their privacy settings. So, one of the best and under-reported polls came from Reuters last year that found that something like 75% or almost 80% of all people actually do know their privacy settings and do know how to access it, but they just don’t really do that.

43:55 Will Rinehart: And that’s because these large platforms are actually… There’s a lot of opportunities to go in and change around your information. A lot of people don’t do it and a lot of people do actually do this, but making that more complicated, I don’t think necessarily gets you to a better world. And there’s also this big question, which again, has been hinted in this conversation about the First Amendment, which is that, every time that you… One of the big problems with baseline privacy legislation is something that Eugene Volic has talked about in, probably, I think, probably one of the most important papers, which is that, limiting the right of a platform to speak about you is a First Amendment violation and it is.

44:36 Will Rinehart: And a lot of the privacy legislation is gonna have to come up against the First Amendment. And that’s also something that I think that if you’re more liberty-minded, that you really need to do, you probably need to be thinking about “Well, wait a second.” The fact that these privacy legislations is, even if you do believe in curtailing the largest platforms, So yeah, this is gonna be an interesting year and it’s gonna be a weird year, and unfortunately, I think it’s gonna be for people who are in this space, for myself included, I think it’s gonna be kind of a bad year.

45:22 Matthew Feeney: Yeah, well, on that note.

[laughter]

45:26 Matthew Feeney: I thought, well, we could do a whole other podcast. Glad to have you back on this.

45:30 Will Rinehart: Yeah, I’ll come back.

45:31 Matthew Feeney: The privacy paradox that you’ve just mentioned ‘cause I could…

45:34 Will Rinehart: Yeah.

45:35 Matthew Feeney: I don’t know. I could talk for England on privacy and tech, because that’s… But I think there’ll be plenty of other opportunities. I do think that we need to be careful when we’re talking about privacy and tech of not assuming the right kind of privacy that people should want or have.

45:52 Will Rinehart: Yeah.

45:52 Matthew Feeney: And thinking, actually, you don’t even know how bad this is gonna be, so let us step in and restrict the amount of information you were sharing. It’s much better to, I think, have it on control. Paul, I don’t know if you wanted to…

46:07 Paul Matzko: Yeah, no, I think that’s a great place to leave this. We’ll have to have you back on. Will, thanks for coming on.

46:11 Will Rinehart: Absolutely. Yeah. Of course, of course.

46:13 Paul Matzko: Even though…

46:14 Will Rinehart: By the way, I’m a huge fan of this podcast, so it’s actually really fun to be on it.

46:17 Paul Matzko: Oh, that’s great to hear.

46:18 Matthew Feeney: Thank you.

46:18 Will Rinehart: Yeah.

46:18 Paul Matzko: Yeah, we’ll have to have you on again, and this is a never drying up well of content here right now.

[laughter]

46:24 Will Rinehart: Never-ending.

46:26 Paul Matzko: And we should do a special. We should do something, ‘cause if the EU is the foils the US often on matters of tech regulation.

46:33 Will Rinehart: Yeah.

46:34 Paul Matzko: Man, the s*** show that is civil liberties, and digital civil liberties, that is Great Britain right now, is a real mess.

46:40 Will Rinehart: Yeah, yeah.

46:41 Matthew Feeney: Oh god, yeah.

46:42 Will Rinehart: And its huge impact on investment in this space. I mean, there’s really good even at early evidence on how this has affected the internet ecosystem in the EU, that it’s actually seriously suffered in the last two quarters because of it, so yeah. Good for them.

46:56 Paul Matzko: That’s right.

46:58 Will Rinehart: That’s right.

46:58 Paul Matzko: Well, and on that note, until next week, be well.

[music]

47:03 Paul Matzko: Thanks for listening. Building Tomorrow is produced by Tess Terrible. If you enjoy Building Tomorrow, please subscribe to us on iTunes, or wherever you get your podcasts. If you’d like to learn more about Libertarianism, find this on the web at www.libertarianism.org.