Tech companies seem to be inundated with lawsuits and calls for more regulations. Each week the companies that provide us with the essential and frivolous services we rely on are either getting sued or having their business practices probed by government agencies.
On Wednesday, Sen. Al Franken (D-MN) urged the Justice Department to investigate whether Apple artificially inflates prices and cuts competitors at the knees by charging hefty fees to app developers. The Federal Trade Commission is already looking into it and issued subpoenas for Apple’s music streaming service.
Uber, the global app-based ride sharing service, has been fighting a plethora of lawsuits and investigations from whether drivers should be legally treated as employees to regulatory caps on the number of cars on the road in New York to the service’s lack of accessibility to disabled riders.
Whether it’s cybersecurity, privacy, net neutrality or labor concerns, federal regulations have been viewed as both necessary to protect the public at large and those companies’ employees, as well as a hindrance to innovation.
During a fundraising trip last week, GOP presidential hopeful and former Florida governor Jeb Bush rallied behind the tech industry saying, “The government today in Washington looks more like General Motors in 1975. The government of the future needs to look more like Thumbtack,” a San Francisco-based web site that pairs consumers with professional services such as painters, tutors or dog walkers. “Lower cost, higher quality, focused on outcomes, really committed to the citizens — in your case, your customers,” he continued.
Bush was partly insinuating that a future government needs to be smaller, but also that it be more efficient and embrace technology rather than resisting it. His sentiments slightly contrasted that of Democratic rival Hillary Clinton, who visited Silicon Valley just days before. “Many Americans are making extra money renting out a small room, designing Web sites, selling products they design themselves at home, or even driving their own car,” the Washington Post reported. “This on-demand or so-called gig economy is creating exciting opportunities and unleashing innovation. But it’s also raising hard questions about workplace protections and what a good job will look like in the future.”
Both presidential candidates touch on is the dichotomous relationship between the government and disruptive technologies. It’s a given in the evolution of society that every time a new method or technology emerges to make life easier or more entertaining, it must fight against the Old World order, the archaic laws and numbingly slow pace of the government regulatory process. It’s the price of innovation, but the cost of having stringent laws could unwittingly punish the change makers.
That was the case with Aaron Swartz, the programmer and hacktivist who committed suicide after the Justice Department charged him with felony computer hacking charges under the Computer Fraud and Abuse Act (CFAA) for downloading documents from a research database. The law is often criticized for being too broad and criminalizing ordinary internet habits that weren’t common when the law was drafted in 1986 such as lying about your age. Swartz faced up to 50 years in prison for 13 felonies as a result. President Barack Obama has vowed to update the law as part of an effort to bring the government and its policies into the 21st century.
As the Washington Post pointed out, loose laws paired with strict enforcement often yield rulings where it’s clear the law hasn’t kept pace with the technology. The State Department ruled in 1993 that University of California at Berkeley graduate Daniel Bernstein had to register as an “international weapons dealer if he wanted to post an encryption program online.”
Fast forward to 2014, and the Federal Aviation Administration was forced to drop its case against Raphael Pirker, the only person who fined by the FAA for flying a drone commercially. Pirker was fined $10,000 for using a drone to film a commercial, but a federal judge found the FAA had no authority to restrict the use of unmanned or model aircraft.
Alternatively, not doing enough means companies like Uber, Facebook, and Amazon face little to no penalty for mismanaging consumer privacy or shortchanging employees through unfair labor arrangements. The European Commission has taken the initiative in checking tech companies on their business practices especially regarding consumer privacy, antitrust violations, and tax evasion.
Historically, government’s haven’t mastered the perfect medium that balances judicial prudence and fair enforcement. But as the global economy increasingly relies on the sharing or gig economy, governments are going to have to take a serious and very thoughtful approach to regulating tech companies enough to protect, but not so much to suffocate the innovation that drives society forward.