President Biden’s New Order Focuses on Big Tech
by Daniel Newman | July 14, 2021

The Six Five team discusses the new Executive Order from President Biden focusing on Big Tech.

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Daniel Newman: So last week, on Friday, President Joe Biden dropped an executive order zeroing in, not entirely focused on, but zeroing in on big tech. This was interesting, Pat, I think it was over 70 different recommendations and legal actions suggested in this tape and it covered a lot of ground. I think it was covering a wide swath of potential issues. But the focus once again, is really on unity among policy and lawmakers to put more and more pressure on the big tech environment.

So, what was in this thing? Just a couple of headers. It asked the FTC to put more energy into challenging bad mergers that may have taken place in the past. So, it’s a look-back recommendation. It was encouraging the FCC to restore net neutrality that were undone under Trump. There was a lot of support for net neutrality. So, that’s an interesting one to look at, but then there were some interesting ones in there, Pat, banning occupational licensing restrictions. Why would they do that? Well, so that people can basically have more economic mobility. It was asking for a limit or ban altogether of non-compete agreements. That’s pretty interesting. Giving a lot of power to employees who are going to be paid exorbitantly to bring ideas to companies and then be able to take their ideas elsewhere. I don’t know, an interesting one. Then there was even stuff as far out there as lowering prescription drug prices, supported by state and tribal efforts to import cheaper drugs from Canada.

A couple of quick takes on this one, Pat. The unity is all about the first one I mentioned, the challenging of bad mergers, bringing this to the attention, a look-back period. Right now we are in the middle of … we’ve got suits, FTC, the Facebook one just ended. Broadcom just got brought into a significant suit for the way they were making chip … Basically the broadband providers, they were threatening, supposedly, if they did not buy exclusively from them. So, that’s going on. You’ve got the 36 suits that we mentioned on this one. You’ve got probes into Amazon. Amazon’s MGM deal is now getting probed by the way. You’ve got the Nvidia Arm deal, that’s going to go through significant … I mean, big tech, Pat, is under a spotlight like never before. The unity among lawmakers is what probably scares me the most, is that you have right and left actually agreeing on something and-

Patrick Moorhead: For different reasons. For different reasons too.

Daniel Newman: For totally different reasons. And you have five laws that have passed the House that are going to die in the Senate in their current form, but will likely be revived and rewritten and passed in some other form in the near future, that are going to give more power to regulators and lawmakers to break up big tech. The challenge, Pat, I’m going to speculate and I’m going to then throw this back to you because I could talk about this for a long time, but I don’t want to take the entire topic over here. We are at an impasse now where we are asking lawmakers and policymakers to potentially play God. I want to be very clear what I mean by that, because that could be pretty metaphoric in its stance.

But when Google, for instance, bought Android, there were certain promises made about how they would run Android. There was a certain window of time to understand how it added or created competition, and lawmakers at that moment in time had to make a decision based upon basically the road they could see, how far the sight line of what would happen and they had to allow it to pass because at that period of time, it was not monopolistic. It was not creating any sort of unfair practice or aggressive practice in stifling competition or harming consumers. 15, 18 years later, as the platform grows, the environment changes. You could actually have the same argument for Facebook being allowed to acquire Instagram or WhatsApp down the line. You could make the same argument about the NVIDIA Arm deal. You could make some speculations of what it is today and what it could be in 20 years. But the point is, is that the law is changing into a format that allow policy lawmakers to basically decide on a conflict based upon what might happen, is the reversal of what the law is all about.

The law is about enforcing current laws that are in showing to a burden of proof that companies are committing antitrust violations that are harming consumer and stifling competition, not the prospectus of that happening at some point in the future. If anything, all of this effort, all this energy, whether it’s Biden’s EOs, the new laws that are going in the house, and the regulation that’s going against the probes, is are we going to go after companies who are committing antitrust violations or are we trying to give so much power to lawmakers that they could actually make decisions based on what they feel might happen? That scares the crap out of me.

Patrick Moorhead: Daniel, gosh, we could do an entire show on this. I mean, first of all, what was interesting is it’s an exec order, but the exec order was really about recommending that the FTC and the DOJ and the FCC do some things. So, was this really an exec order? I don’t know.

Daniel Newman: It has no teeth.

Patrick Moorhead: The fairness too, of the idea that something was approved, and they’re going to go back and have a look at this? I don’t know, maybe this is just my Midwestern in me. I just think that’s horrible. Daniel, to your point on the potential to be a monopolist, or use monopolous power, as opposed to actually bringing harm to consumers or competitors, we saw that rear its ugly head with Qualcomm. There was no evidence that was even presented that there was actually damage done in Qualcomm suit, so I think that’s kind of scary.

Net net, I do think that we need to provide an open playing field, or a more open playing field for smaller companies to come in. History shows that when big companies get bigger, they do get less competitive. We haven’t seen it yet. So I know that sounds like I’m speaking out of both sides of my mouth, but if you go in and look at what some of our biggest innovations were driven by, they were by innovators, either creating new markets and with the tech companies getting as big as they are, is there still an open playing field now that we have all of these walled gardens? Or do all of these new innovators and entrepreneurs have to play in the sandbox of all these big companies? That scares the crap out of me, that not only do we have consumer walled gardens, we’re increasingly seeing enterprise walled gardens with Microsoft, what Salesforce is building, and even what Google has.

So yeah, I am talking a little bit out of both sides of my mouth. I do like the scrutiny of it. One thing though, I’m not going to stand for, that I don’t like it all and I don’t support, is the political politicization of it. I mean, let’s do it for the old fashioned rules of anti-competitive, as opposed to what politics might be. I say that on both sides of the aisle. By the way, I can’t imagine right now what big tech mice might be thinking because they supported Biden so much for Biden to come in and make their life very, very difficult. I find that incredibly ironic. This is not editorial. I mean, if you look at who gave to which campaign, the resounding majority of big tech gave to Biden’s campaign. So, something is going to change Daniel. I don’t know exactly what is going to stick and what is not, but it sure is great fodder for conversation.

Daniel Newman: Yeah. You made some great points and like you said, I could go back and we could go back and then you could go back and then I can go back. I guess balance is the one thing I want everyone to leave here in mind. Big tech has a lot of flaws. Just like we talked about Amazon, there are gaps to fill. The company can do more, do better, but will never do enough, same with big tech, but we want to act like everything in this world is binary. One of the biggest opportunities as a society we have is to start seeing the gray area again. There are things that can be done. There are regulatory and efforts that can be put into place that can make things more fair. We can do more to give people access to their data, to give people a chance to opt in and out of things more freely.

But at the same time, what big tech has offered our society, what it’s given us, whether it’s the ability to hail an Uber safely and make secure payments on any platform, or connect to our friends and family and stay in touch with people around the world seamlessly for pennies. We want to either villainize it or support it and it’s not that simple. It’s like everything in the world right now. We need to start to open our minds to a gray area. That’s what I hope all this does in the end, as we start to return to normalcy post-COVID, clear the fog of the COVID brain and start seeing the fact that there is a gray area. Big tech’s not perfect, but it isn’t the scapegoat for everything that is wrong in the world. Until we find balance, we may never be able to function normally as a society.

About the Author

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio