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Biden’s Misguided Call for Internet Regulation
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Biden’s Misguided Call for Internet Regulation

Going after Big Tech by reforming Section 230 and limiting data collection would stunt American technological innovation.

U.S. President Joe Biden has proposed regulating social media companies by reforming Section 230 and called for limiting data collection. (Photo by Alex Wong/Getty Images.)

Last fall, President Joe Biden earned mocking headlines for spelling out the word “D-O-T” while reading out a website address from a teleprompter. It is no surprise that a president born closer to Abraham Lincoln’s second inauguration than to his own would be unfamiliar with internet terminology. Yet Very Online progressives made Biden a social media star of sorts with a bespoke meme repurposed from anti-American Chinese propaganda known as “Dark Brandon,” the laser-eyed scourge of malarkey.

Dark Brandon’s 15 minutes of memedom have not stopped the regular ol’ Joe Biden from settling on internet regulation as a major emphasis for 2023. A variety of proposed internet rules fell just short of passage last year—including a proposal to cartelize newspapers so they can extract revenue from Apple and Facebook—but the administration appears to see reining in Big Tech as fertile ground for the kind of bipartisan cooperation needed to move legislation through a sharply divided Congress. 

To that end, Biden took to the editorial pages of the conservative-leaning Wall Street Journal last month. The resulting op-ed reveals Joe Biden to be hopelessly out of touch with the nature of the internet. His proposals, if enacted, would take a laser to the foundations of 21st century American prosperity and threaten the U.S.’s position at the forefront of internet innovation. 

Biden’s call for regulation is rooted in fearmongering. He accuses social media companies of running an experiment on children, charges online forums with promoting offline violence, and implies that platforms aid and abet a wide range of online criminal conduct from cyberstalking to illicit drug sales. This is the rhetoric of moral panic. Joe Biden joins a long line of politicians who have exploited public fears about the negative social effects of novel mass media to justify government overreach, from Sen. John Pastore’s crusade against violent TV westerns in the 1970s to Sen. Joe Lieberman’s obsession with Mortal Kombat in the 1990s. 

Concerns over the rise of online pornography led to the passage of the Communications Decency Act of 1996, which would have given the government sweeping power to restrict online speech. When the U.S. Supreme Court struck down its obscenity provisions the following year on free speech grounds, it left in place one part known as Section 230, which shielded online platforms from civil liability for user provided content.

In the editorial, Biden calls for the repeal or replacement of Section 230 to protect the “mental health and safety” of children and prevent discrimination, but this reveals his fundamental misunderstanding of the law and disregard for free speech. Opponents of Section 230 often consider it a special giveaway to Big Tech, a unique set of protections that applies only to the internet. Nothing could be further from the truth.

Section 230 simply formalized common law precedents that had evolved around civil liability for bookstores and applied them to the internet. A century ago, it was common for the authorities to shut down bookstores for carrying obscene or libelous books. But during the 20th century, courts increasingly recognized that retailer liability was a violation of the First Amendment. If someone were to be held liable, it ought to be the author of the book, not the bookstore selling it. 

For instance, if former President Donald Trump were offended by Michael Wolff’s latest exposé of his administration, he could sue the publisher and author, but any attempt to go after Barnes and Noble would be considered a junk lawsuit. A bookstore can be held liable neither for merely stocking an otherwise legal book nor for the relative visibility it gives any book on its shelves. 

The fact that online information is relayed via pixels and diodes instead of paper and ink does not change the foundational principle that information middlemen should not be held civilly liable for content created by others. Blaming Facebook or Twitter for hosting user-generated content ought to feel as bizarre as blaming a bookstore for carrying books authored by others. Likewise, the way online platforms choose to moderate user content should no more expose them to publisher liability than the shelf placement of books does for bookstores.

If Joe Biden were successful in undermining Section 230, it would unleash a wave of frivolous lawsuits against online platforms, which, ironically, would only encourage further concentration of Big Tech by rewarding those companies best able to maintain fleets of lawyers on retainer. Furthermore, it would incentivize platforms to err on the side of removing all potentially offensive content, thus chilling user speech.

That kind of chilling effect might be considered a feature and not a bug for many progressive advocates. They imagine that removing Section 230 will enable them to put pressure on Big Tech platforms in order to remove even more hateful speech and misinformation. But algorithmic content moderation is a blunt weapon: Online content creators have found that efforts to moderate away racist speech have routinely impaired anti-racist speech as well.

This approach also places the techno-progressive vision of a more well-regulated internet discourse in direct tension with their ostensible conservative allies, who are angry about platforms shadowbanning conservative voices. Multiple conservative congresspeople have proposed laws that would define social media platforms as common carriers, treating them like telephone and utility companies that operate “dumb” pipes and must allow any and all content to flow through unimpeded. 

In other words, progressives want online platforms to moderate more while their conservative co-belligerents want them to moderate less. This makes for unusual bedfellows in what amounts to incoherent, vibe-based policymaking fixated on taking down Big Tech a notch regardless of the potential negative consequences for the wider internet. 

Biden’s proposal makes an even more foundational error. He laments that tech companies “collect, use and share highly personal data,” arguing that “much of that data shouldn’t be collected in the first place.” Biden portrays data as a thing that people naturally possess, which is then harvested by greedy tech platforms that give back little in return. This is incorrect. 

Yes, the internet economy is propelled by data collected from users as they click, scroll, and post, but the platforms turn that data into valuable information by aggregating it into large datasets and then selling anonymized access to advertisers. If data is a kind of raw material, then information is a finished good. It is the product of an ongoing, collaborative, mutually beneficial exchange between users and platforms. 

Consider the fact that my favorite ice cream flavor is mint chocolate chip, specifically Breyers brand mint chocolate chip. In a pre-digital world, that datapoint has value only to me because my personal preference is inaccessible to ice cream manufacturers. Unless I took the extraordinary step of signing up for a Breyers fan club, the fact of my preference is of no direct use to Breyers.

But via the data-to-information pipeline of the digital economy, my preference gains new value. My web history might reveal that I’m interested in buying ice cream and that I prefer Breyers. A company like Facebook or Google can aggregate and anonymize my preference with that of thousands of others, then offer Breyers the opportunity to target their advertising to those most predisposed to want their product. Everyone benefits: Breyers can more efficiently turn ad dollars into customer purchases, I receive advertising that more closely reflects my preferences, and the online platform that turned my low value data into valuable information receives a middleman’s cut. 

Conversely, if companies were banned or otherwise hindered from collecting user data, it would turn valuable, aggregated information back into valueless, individualized data. It would not return something of value unfairly taken by Big Tech but simply destroy the value altogether. Although my example is a bit twee, the consequences for devolving information back into data can be quite severe.

For example, President Biden specifically calls out the collection of “health, genetic, and biometric data” to call for enhanced federal protections for data privacy. And certainly, consumers have a right to know how their basic health data is being collected and used. But formalizing ownership of health data and creating stringent data privacy rules can simply destroy the value of the data and leave both platforms and consumers worse off.

Consider the perverse incentives created by the formalization of health data privacy rules under the Health Insurance Portability and Accountability Act (HIPAA) in 1996. The law was supposed to ease the exchange of medical records between health care providers and insurance companies while limiting consumer exposure to fraud. But by requiring consumer opt-in for every exchange of health information, HIPAA accidentally discouraged the very thing it was meant to promote. It turned potentially valuable health information back into undervalued data, placing new barriers between consumer data and third party use.

HIPAA is why you often must use antiquated, proprietary messaging systems to communicate with your doctor; general email is non-compliant. HIPAA (as well as obtuse FDA overregulation of medical devices) is why your Apple Watch collects high quality health data but you are unable to frictionlessly share it with your doctor. 

When HIPAA formalized health data privacy rights in 1996, the modern consumer internet was in its infancy. Since then, all other categories of user data have seen remarkable innovation and development that returns real value to all involved. But our health data remains stuck in the ‘90s, a constant reminder that formalizing data ownership can destroy its value and hinder innovation.

Finally, although President Biden wants to “make sure American tech keeps leading the world in cutting-edge innovation,” his proposals threaten to undermine America’s edge. One of the reasons for U.S. digital dominance is that we formalized platform liability protections via Section 230 while foreign competitors have had to wade through a regulatory and legal morass. European obsession with data privacy rights, red tape on venture capital, and antitrust hawkishness has handicapped the continent’s internet economy, turning it into a net importer of digital services with a trade deficit of more than $112 billion with the U.S. 

Bear in mind that America’s internet sector constitutes 11 percent of U.S. GDP, supports 17 million jobs, and has been responsible for the preponderance of economic growth since 2016. Shielded from junk liability lawsuits and data-destroying privacy regulations, the U.S. internet economy boomed. And since the internet was “born free” in a country with strong constitutional protections for free speech, it gave the global internet a kind of pro-free speech valence for the last third of a century. (Various national exceptions prove the rule.) 

Biden’s proposals, if taken either seriously or literally, could undermine America’s future position in the internet economy. Now that would be a real bunch of malarkey.

Paul Matzko is a historian and research fellow at the Cato Institute.