Bipartisan internet bill must be spiked

For 30 years the broad advance of the internet has driven commerce, debate and the advancement of knowledge worldwide. A new bipartisan proposal by two senators for more regulation would slow development and slam the economy, especially in techcentric California.

Sens. Lindsey Graham, RSouth Carolina, and Elizabeth Warren, D-Massachusetts, wrote an op-ed in the New York Times touting their new bill, the Digital Consumer Protection Commission Act of 2023, which would dramatically alter the relationship between government and the internet.

Graham and Warren indulged in misguided rhetoric about tech companies. They claim their bill would “rein in Big Tech” and “set clear rules for tech companies and impose real consequences for companies that break the law” by establishing a federal commission directly tasked with regulating online platforms and data processors.

But the reality is that what Graham and Warren are proposing is likely to do more harm than good.

The first problem is “the Big Tech epithet is vague,” Spencer Purnell told us. Purnell is the director of technology policy at the Los Angeles-based Reason Foundation. “Does that mean artificial intelligence? Targeted advertising? Content production and editing? This runs the risk of regulatory overload.”

Indeed, the internet today already is governed by numerous laws, including the Telecommunications Act of 1996, the Communications Decency Act of 1996 and the Digital Millennium Copyright Act of 1998. The Federal Communications Commission, the Federal Trade Commission, the Justice Department and many other federal agencies, as well as state agencies, already have enough powers to deal with the concerns of the two senators.

Purnell warned the new commission actually could protect the big, established tech companies, which already have legions of lawyers protecting them. But startups with innovative new ideas couldn’t afford adequate legal protection to withstand the scrutiny of a federal commission in search of real or imagined problems. He pointed to the credit reporting industry, where “the four giant bureaus are the only ones that can comply with all the ridiculous regulations.”

Purnell notes the European Union’s 2018 General Data Protection Regulation, which operates much like the senators’ new commission, has stifled new investment in technology on the Old Continent. The GDPR made websites slower and surfing the net more difficult and confusing. According to the AdExhanger news site, as of 2021, “Investment in European startups has dropped by 36% compared to American or other global startups since the rollout of GDPR.”

A similar hit to the U.S. tech industry from the senators’ new bill especially would devastate California. Silicon Valley could lose its place as the global tech leader. The state budget, heavily dependent on the 13.3% income tax paid by tech employees, executives and investors, could lose tens of billions of dollars.

The World Wide Web really is global. If this bill by Graham and Warren is enacted and wraps even more red tape around American companies, startups elsewhere will step in and build the future.

We encourage California Sens. Dianne Feinstein and Alex Padilla to push “delete” on this misguided bill.