As 2023 comes to a close, we’re taking the time to look back and analyze some of the biggest developments in tech policy. The following represents the technology and innovation team’s year in review.
2023 was the year that Artificial Intelligence (AI) passed the threshold of popular interest following the release of OpenAI’s generative pre-trained linguistic transformer ChatGPT. The disruptive effect of the technology on virtually every sector relying on the written word amplified long-standing concerns about these technologies in the everyday lives of citizens, according to AEI scholar Bronwyn Howell. Tech industry leaders testified before Congress on issues potentially arising from AI: from algorithmic discrimination to liability in autonomous systems.
While no major legislation was enacted, the Biden Administration released an Executive Order tasking agencies with developing frameworks for managing AI risks within their regulatory domains. Key aspects of the Order include setting new privacy, anti-discrimination, and safety standards for AI within the executive branch. According to John Bailey, The National Institute of Standards and Technology (NIST) will be foundational in the development of guidelines and best practices for “developing and deploying safe, secure, and trustworthy AI systems.” Developers of new “dual-use foundation models” that could pose risks to “national security, national economic security, or national public health and safety” will need to report safety testing results to the federal government before and after deployment.
Meanwhile, the European Union proposed draft AI rules in June 2022 which gained momentum when a plethora of AI developers penned an open letter begging for their sector to be regulated, analyzed by Bronwyn Howell at the time. In December, the EU finally reached an agreement on the terms of its AI bill. Meanwhile, similar activities took place in countries, such as Canada and the United Kingdom.
In October, the US trade delegation to the World Trade Organization (WTO) announced that the US was withdrawing from talks to introduce new digital trade rules into the multilateral trading system. The Office of the US Trade Representative (USTR) argued that nations were rethinking digital rules to allow more “policy space” and regulatory oversight. The announcement and subsequent policy defense raised the possibility of overturning US bipartisan digital trade policy going back to the Obama administration and reinforced in law by provisions in the 2018 US-Mexico-Canada Agreement.
Appeals to White House economic and security officials illustrate the strong sense among members of Congress and the business community that USTR misled them before the WTO decision. After weeks of silence, the USTR now argues that USMCA digital provisions are outdated and it would be “malpractice” to ignore claims that Big Tech has free rein under USMCA rules. This stands in direct contradiction to Sen. Wyden who labeled USTR’s WTO action “malpractice.”
According to Claude Barfield the withdrawal weakened the drive for market-friendly digital trade rules and undercut key allies such as Australia, Japan, Singapore, and South Korea, that have adopted advanced digital trade regimes. US vacillation and possible retreat will certainly strengthen the hand of China, which is itching to establish “digital sovereignty” as the norm for international digital trade policy.
The Federal Trade Commission (FTC) began the year losing a lawsuit to stop Meta’s purchase of Within Unlimited. According to Mark Jamison, the case was ill-conceived but aligned with the FTC chair’s desire to build a new antitrust regime. The Department of Justice (DOJ) antitrust case against Google for its search practices also went to trial, with the DOJ saying the case could reshape the future of the online ecosystem. Despite serious problems noted by Dr. Jamison, the DOJ launched another case against Google with the potential to remake the online ad market by distributing revenue away from Google. The capstone for the year was the DOJ’s and FTC’s release of new draft merger guidelines. The draft guidelines demote economic analysis, prompting seventeen former DOJ and FTC chief economists to release an open letter asking the agency heads to give economics its space in the merger guidelines.
Elsewhere, the Federal Communications Commission (FCC) and the National Telecommunications and Information Administration (NTIA) sought to bring broadband under the FCC’s outdated telephone regulations (misleadingly labeled as net neutrality) and its digital discrimination regulations, which according to Mark Jamison, would get the FCC deep into network planning, expand who the FCC oversees, and hold these entities liable for violating rules that the FCC could define after the fact. The NTIA, which runs the $42.45 billion Broadband Equity, Access, and Deployment (BEAD) program, is also pressing states to regulate the broadband providers’ prices.
As Clay Calvert’s work this year illustrates, social media platforms were front and center on the US Supreme Court’s 2023 docket. In May, the Court in Gonzalez v. Google dodged the issue of whether Section 230 of the Communications Decency Act protects platforms from liability when their “algorithms . . . suggest or recommend third-party content—not just host it.” In September, the Court agreed to examine two cases, Moody v. NetChoice and NetChoice v. Paxton, involving state statutes that compel large social media platforms “to host content and users against their will and individually explain content-removal decisions.” These cases will be momentous in defining the platforms’ First Amendment right of editorial autonomy, freedom from government interference, and the “[t]he First Amendment’s unenumerated right not to speak.”
In October, the Court heard arguments in the consolidated cases of Lindke v. Freed and O’Connor-Ratcliff v. Garnier. They involve the First Amendment rights of citizens who are blocked by government officials on private social media accounts. The Court will decide when an “official’s account usage sufficiently relates to their government position and public duties to trigger state action.” The Court will likely rule by mid-spring. In October, the Court took up the jawboning and politically fraught case of Murthy v. Missouri (formerly Missouri v. Biden). The case will tackle whether Biden administration officials and agencies “violated the First Amendment when they vigorously lobbied social media companies to remove or suppress conservative-tilting content that, among other things, questioned the efficacy of COVID-19 mask mandates, shutdowns, and vaccines.”
Yet, no social media company faced more scrutiny than TikTok. The platform owned by Chinese company ByteDance came under fire due to concerns that the Chinese government might use the platform for propaganda or intelligence purposes. After a raucous congressional hearing featuring TikTok CEO Show Zi Chew, numerous states banned the app on government-owned devices. As Daniel Lyons chronicled, some lawmakers called for a complete ban—a proposal that Montana enacted into law in May, but which is currently blocked by the court due to concerns that such a ban violates the First Amendment rights of TikTok and its users.
Though FTX fell in 2022, the past year was truly the year of the incompetent crypto charlatan. FTX founder Sam Bankman-Fried was convicted on seven counts, exposing lurid mismanagement of a company to which investors and customers accorded far too much credit. According to Jim Harper, the news helped crystallize opposition to crypto among the likes of Senator Elizabeth Warren (D-MA) and SEC Chairman Gary Gensler. Warren sought to turn the Hamas attack on Israel into a crypto issue, for example, and Gensler has grown more outspoken against crypto throughout the year.
Like all prior years, a comprehensive federal privacy statute didn’t pass in 2023. Federal privacy legislation might protect big companies from competition and other threats to their power. It might further erode the constitutional arrangement of powers, among American governments and disempower consumers even further. And it might not improve people’s privacy, as Jim Harper suggested. However, the US and EU have created a third agreement to enable the transfer of personal data from the EU to the US in a manor that is complaint with the EU GDPR. The new data privacy policy advanced by this agreement in the EU and US creates new guidance and governance measures around documenting data lineage, improving cataloging and tagging, instituting broader access reviews, deleting outdated and unnecessary data, and prioritizing data quality. Shane Tews has argued that as more data and critical systems migrated to the cloud, federal and state governments proposed more stringent governance rules on access controls, encryption standards, vulnerability testing requirements, and breach notification policies.
