Last year, the government of President of the United States Joe Biden infuriated lobbyists for megatech companies and other companies that profit from our personal data, when he repudiated a proposal that would have invalidated data privacy, civil liberties and rights on the Internet, and the protection of competition at the local level. Now, Biden’s new executive order on the security of Americans’ data (https://bit.ly/3IJvmqB) reveals that lobbyists had good reason to worry.
After data traders and technology platforms exploited the personal information of Americans in an unrestricted and unmonitored manner for decades, the Biden administration has announced that it will prohibit the transfer of certain types of data to China and other problematic countries. It’s a small but important step toward protecting Americans’ sensitive information, along with government data.
Furthermore, the measure is likely to be a precursor to other policies in this regard. Americans have well-founded concerns about what happens on the Internet, and these extend far beyond violations of privacy to include a host of other digital ills such as misinformation, social media-induced anxiety disorders in adolescents, and incitement to racial hatred.
Companies that profit from our data (including personal medical, financial and geopositioning records) have been trying for years to equate free data flow
and freedom of expression. They will try to portray any public interest protections the Biden administration proposes as an attempt to block access to news websites, limit the Internet, and empower authoritarian governments. But that doesn’t make sense.
Technology companies know that in an open and democratic debate, consumers’ interest in instituting protections for the digital world will prevail over their interest in profit margins. That’s why industry lobby groups have gone to great lengths to circumvent the democratic process. One of their methods has been to push for the approval of obscure international trade rules that would limit personal data protection measures that the United States and other countries can take.
It should seem obvious that the United States government must protect the privacy of Americans and national security; Both can be at risk depending on where and how the huge amounts of data that all users generate are processed and stored. But oddly enough, the administration of former President Donald Trump attempted to prohibit the United States from imposing restrictions on cross-border transfer of information, including personal information
to any countryif that transfer is related to the businesses of investors or service providers operating in the United States or in other countries that sign the agreement (https://bit.ly/3Ttq33x).
It is true that the Trump administration’s proposal for the World Trade Organization to institute this rule includes an exception, which would apparently allow some degree of regulation necessary to achieve a legitimate public objective
; but he designed it so that it does not work in practice. Although the megatech companies cite it to refute criticism of the broader proposal, its wording is copied from a general exception
of the WTO that failed in 46 of 48 attempts to use it (https://bit.ly/3TMTKOc).
Banning the regulation of cross-border data flows was just one of four proposals the Trump administration attempted to introduce into the new version of the North American Free Trade Agreement and WTO negotiations at the behest of big-tech lobbyists. The proposed rules, written in incomprehensible jargon and hidden among hundreds of pages of trade clauses, were deceptively presented as rules of digital international trade
.
With their restrictions on government policies, the new rules drafted by the industry jeopardized attempts by congressmen from both parties in the United States to oppose megatech abuses against consumers, workers and small businesses. They also undermined the ability of US regulatory agencies responsible for protecting privacy, civil rights and antitrust laws. Indeed, if the WTO had approved Trump-era rules against government imposition of restrictions on data flows, the Biden administration would not be able to implement its new data security policy.
The existence of the Trump-era proposal went unnoticed by almost everyone (except, of course, the lobbyists, who secretly pulled the strings of the trade negotiations). Never before has a United States trade agreement included clauses that prevented the Executive and Congress from exercising authority over data regulation; Now, from one day to the next, digital platforms obtained a special right to secrecy. The rules would have prohibited the implementation of algorithmic analysis and AI preselections that Congress and various executive branch agencies consider essential to protecting the public interest.
Trump’s defeat in the 2020 election did not deter industry lobbyists from seeking passage of these anomalous rules. His plan was to get them included in the Indo-Pacific Economic Framework, an agreement proposed by the Biden administration. But instead of listening to lobbyists, Biden administration officials and lawmakers determined that the Trump-era proposals were inconsistent with Congress and the executive branch’s goals on digital privacy, competition and regulation. .
It’s now understandable why tech lobbyists were so infuriated by the Biden administration’s decision to withdraw support for the Trump-era proposal. They realized that by discarding the rules of digital international trade
promoted by megatech companies, the Biden administration reaffirmed its authority to regulate large platforms and data traders who, for many Americans across the political spectrum, have accumulated too much power. Trade agreements have received bad press precisely because of this kind of behavior by business lobbies.
The United States needs a good debate about the best way to regulate megatech companies and how to defend competition while avoiding the digital evils that today encourage political polarization and weaken democracy. It is obvious that the debate should not be subject to restrictions surreptitiously imposed by megatech companies through trade agreements. US Trade Representative Katherine Tai is absolutely right when she says that setting trade rules that limit action on these issues before the US government has decided on its own strategy for the local level would be political malpractice
(https://bit.ly/4a3FlTo).
Whatever your position on regulating megatech companies (whether or not to restrict their anti-competitive practices and the social harm they cause), anyone who believes in democracy should applaud the Biden administration for having refused to put the cart before the horse. The United States, like other countries, has to decide its digital policy democratically. And if that happens, I suspect the result will be very different from what the megatechs and their lobbyists were trying to achieve.
Joseph E. Stiglitz, former chief economist of the World Bank and former chairman of the Council of Economic Advisers to the President of the United States, is a distinguished professor at Columbia University, Nobel Laureate in Economics, and lead author of the Intergovernmental Panel Report on Climate Change in 1995, which won the Nobel Peace Prize (shared) in 2007.
Translation: Esteban FlaminiCopyright: Project Syndicate, 2024.www.project-syndicate.org