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Silicon Valley Gets Another President Skeptical of Big Tech

11/09/2020 | 11:27am

By Sarah E. Needleman and Deepa Seetharaman

As a candidate, Joe Biden lambasted Facebook Inc. for what he considered failures to contain the spread of misinformation. His presidential election win puts him in a position to do something about it.

Facebook, Apple Inc., Google and other tech giants are bracing for continued attention on their operations in a Biden administration, with issues such as competition, innovation and social-media platforms' policing of content likely to be in focus, according to industry executives, analysts and academics.

Companies are watching for hints of a Biden administration's disposition toward Section 230 of the 1996 Communications Decency Act, which provides legal protections to internet platforms for content that users post. Mr. Biden called earlier this year for revoking the liability shield for platform owners.

"Biden will be under significant progressive pressure to crack down on large platforms," said Darrell West, a senior fellow at Brookings Institution's Center for Technology Innovation.

A potentially divided Congress may limit Mr. Biden's efforts to pursue any policy overhaul. Industry observers have said his administration could turn to executive orders or federal agencies to push for changes at companies. Last month a Democrat-led House panel released a report scrutinizing four of the major tech companies -- Apple, Amazon.com Inc., Facebook and Alphabet Inc.'s Google -- and the market power they wield.

In a separate hearing, senators questioned the chief executives of Google, Facebook and Twitter Inc. on prospects for Section 230 changes.

With a divided government, Big Tech has "avoided some risk legislatively, " said Bradley Tusk, a tech investor and chief executive of the early-stage investment firm Tusk Ventures.

Mr. Biden will enter the White House following a shift in the way U.S. government officials view Silicon Valley. The nation's biggest tech companies were once embraced as economic engines and U.S. success stories, but Democratic and Republican lawmakers now view their clout with suspicion, and recent polls suggest people who use their products feel similarly.

Like President Trump, Mr. Biden has criticized Big Tech's market power and has said he would support stricter antitrust oversight, though industry observers have said they expect the president-elect to focus, at least initially, on battling the coronavirus pandemic, which he identified as a priority during his victory speech.

Roger McNamee, an early Facebook investor and critic of tech platforms, said he hopes the Biden administration will scrutinize the companies' approaches to competition, data privacy and consumer safety. He also hopes the administration will bolster funding for agencies such as the Federal Trade Commission and Justice Department's antitrust division, which could help support existing regulatory probes into tech giants.

Mr. Biden will inherit the Justice Department's antitrust lawsuit against Google, which alleges that the company uses anticompetitive tactics to preserve a monopoly for its flagship search engine and related advertising business. Google's legal chief, Kent Walker, said last month that the lawsuit was deeply flawed. Mr. Biden's campaign didn't respond to a request for comment on the matter.

Separately, Facebook, Apple and Amazon are facing antitrust scrutiny. Chief executives from all three companies have defended their practices and said they face competition across their respective businesses.

Mr. Biden has expressed concern about the effect tech innovations such as self-driving vehicles could have on people with middle-class jobs, and he has been outspoken about using regulation to force businesses including Uber Technologies Inc. to reclassify their independent contractors as employees. California voters approved a ballot measure exempting Uber, Lyft Inc., DoorDash Inc. and similar companies from a state law requiring drivers to be classified as employees, a move that potentially sets the tone for gig-worker regulation across the U.S.

Aaron Levie, chief executive of software maker Box Inc., said he expects improved relations between Big Tech and Mr. Biden's administration. "We're in for a new era of how the White House will collaborate with the technology industry," he said.

Mr. Levie, a critic of Mr. Trump, said the voices of tech companies haven't been heard over the past four years on matters such as immigration, consumer privacy, data security and China. "There have been no meaningful conversations on these topics," he said.

Early efforts by big tech companies and Mr. Trump to work together were quickly strained by the travel ban enacted in the first weeks of his administration. Tech leaders were among the earliest and most vocal critics of Mr. Trump's immigration order. Mr. Trump and his appointees went on to enact broad-scale regulatory scrutiny of tech companies, including allegations of anticonservative bias online, antitrust investigations of internet giants and actions against Chinese-owned apps such as TikTok and WeChat. The administration has underscored its aggressive efforts to improve the business climate, including for Silicon Valley, and to boost job creation.

The White House had a cordial relationship with Silicon Valley when Mr. Biden served as vice president, and the Obama administration chose not to pursue antitrust complaints against Google and other large tech firms. The vice-president-elect, California Sen. Kamala Harris, also has strong ties to executives behind the nation's technology giants.

Yet tech companies face significant regulatory risks, according to analysts. Tech companies in recent years have ramped up spending on federal lobbying, and that activity is expected to continue in the years ahead, analysts have said.

"Biden will be tougher than Obama on the tech sector because the party has shifted to the left on that issue," said Brookings's Mr. West.

Tech companies expect a warmer reception with a Biden administration on issues such as immigration after battling Mr. Trump over H-1B visa restrictions. The president-elect could undo some changes pushed by the Trump administration, though business groups have said Mr. Biden might favor stricter policies regulating H-1B visas to boost recruitment of workers already in the U.S. for in-demand occupations.

Okta Inc. CEO Todd McKinnon said the cloud identity-management company has shifted some research and development outside the U.S. during Mr. Trump's term. He said he is hopeful that Mr. Biden will make recruiting foreign talent easier.

Write to Sarah E. Needleman at sarah.needleman@wsj.com and Deepa Seetharaman at Deepa.Seetharaman@wsj.com

(END) Dow Jones Newswires

11-09-20 1126ET

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