Midterm stakes high for Silicon Valley

Midterm stakes high for Silicon Valley
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The outcome of Tuesday's midterm elections could have big implications for the tech industry.

Silicon Valley in recent years has found itself increasingly under fire from both parties.

President TrumpDonald John TrumpJudge rules to not release Russia probe documents over Trump tweets Trump and advisers considering firing FBI director after election: WaPo Obama to campaign for Biden in Florida MORE and Republicans have pressed companies over allegations of anti-conservative bias and raised antitrust concerns for tech's biggest companies.

Now, if Democrats retake the House, the industry could face itself fighting on a new front.


When former President Obama was in office, the tech industry was seen as closely allied with Democrats. Since then, Dems have taken an increasingly tougher stance toward tech over its handling of data security and foreign disinformation efforts.

Dem lawmakers in recent months have proposed tough measures to rein in the industry, bills that could see movement in a Dem House. Rep. Ro KhannaRohit (Ro) KhannaExpiring benefits raise economic stakes of stalled stimulus talks Overnight Defense: Pentagon IG to audit use of COVID-19 funds on contractors | Dems optimistic on blocking Trump's Germany withdrawal | Obama slams Trump on foreign policy Watchdog to audit Pentagon's use of COVID-19 funds on defense contractors MORE’s (D-Calif.) Internet Bill of Rights, for example, would shore up privacy protections for internet users and reinstate net neutrality rules.

If Democrats take the House, the industry can expect more aggressive oversight. Dems across House committees have called for subpoenaing tech companies accused of privacy violations.

The Trump administration's top tech regulators can also expect closer scrutiny from a Democratic House, eager to push back on regulatory rollbacks and toughen consumer protections.

Here are the tech issues at stake in Tuesday’s midterms.


Data privacy

As the ground has shifted under Big Tech’s feet, internet privacy has increasingly become a priority for lawmakers following a series of data scandals ensnaring Silicon Valley’s biggest companies.

The bipartisan momentum for a national privacy bill has been growing in recent months, and even has the backing of just about every industry trade group, many of whom are worry that other states will following the example of California, which recently passed the toughest privacy regulations in the country.

But the outcome of any national privacy legislation, and how much control and transparency it offers to internet users, will likely be shaped by the partisan balance in Congress. Republicans are largely skeptical of imposing burdensome regulations and empowering enforcers to impose harsh penalties on the industry for privacy and cybersecurity violations.

Democrats, on the other hand, are increasingly willing to go after the industry, which they think has been self-regulated for far too long.

Just this week, Sen. Ron WydenRonald (Ron) Lee WydenPlaintiff and defendant from Obergefell v. Hodges unite to oppose Barrett's confirmation Senate Democrats call for ramped up Capitol coronavirus testing House Democrats slam FCC chairman over 'blatant attempt to help' Trump MORE (D-Ore.), historically one of Silicon Valley’s strongest allies, unveiled a bill that would impose lengthy prison sentences for tech executives whose companies repeatedly violate their users’ privacy.

And in the House, where Democrats are much more likely to gain control on Tuesday, the party has already been exploring how it could wield the gavel on key panels, like the House Energy and Commerce Committee.

“We plan to put the consumer first by pushing policies that protect net neutrality, promote public safety, and provide meaningful privacy and data security protections that are seriously lacking today,” Rep Frank Pallone Jr.Frank Joseph PalloneHouse Democrats urge Amazon to investigate, recall 'defective' products Asbestos ban stalls in Congress amid partisan fight Pharma execs say FDA will not lower standards for coronavirus vaccine MORE (D-N.J.), who could take the gavel on the Commerce committee, said in an emailed statement.

“My colleagues and I have already introduced some good policy proposals in these areas, and a Democratic Committee working group has been seriously looking at privacy and data security issues for several months now,” Pallone said.


FCC oversight

Few agencies have been as effective at pushing a deregulatory agenda in the Trump era as the Federal Communications Commission, and along the way the agency’s GOP leadership has repeatedly butted heads with congressional Democrats.

The most attention-grabbing move came when the FCC under Republican Chairman Ajit Pai voted last year to repeal its net neutrality rules, popular Obama-era regulations requiring internet service providers to treat all web traffic equally.

The move was roundly opposed by Democrats, who believe the issue is a political goldmine for them and are backing litigation to block the repeal.

Pai has also angered Democrats over his moves to deregulate the broadcast industry, efforts that they believe will lead to a heavily-consolidated media landscape.

In the event that the Democrats take the House, Pallone, one of Pai’s biggest antagonists in Congress, could drag the FCC chair in front of the panel to challenge his deregulatory moves.

Pallone, who has accused Republicans of neglecting to hold enough hearings on the FCC or the industries it oversees, said it’s “important that the committee get back to conducting real oversight of the FCC, and that means regular oversight hearings with all commissioners.”


Net neutrality

It’s been nearly a year since Pai’s FCC voted along party lines to repeal the 2015 net neutrality rules, but that has not put the issue to bed.

A coalition of state attorneys general and consumer groups are locked in a legal battle with the FCC over the move, and a federal appeals court will have to decide the fate of the repeal. There are also efforts in the states to replace the federal rules with state law. That in turn has prompted a legal challenge from the industry and the Department of Justice.

With all of the uncertainty that the repeal has brought, Republicans, pushed by the broadband industry, want Congress to come up with a legislative replacement. But Democrats, angry over the rush to dismantle the rules and skeptical that any bill Republicans draft will be as strong as the Obama-era FCC regulations, have so far resisted.

They are also waiting to see the outcome of the court battle over the repeal, which could decide whether the FCC overreached with its order to deregulate the broadband industry.

If the Democrats take the House, though, they would have much more leverage in crafting any net neutrality bill, which may change the calculus around passing legislation. Still, it’s unclear whether there would be enough support behind a compromise net neutrality bill and if the two parties can find language that would satisfy both the broadband industry and consumer advocates.