Adam Kovacevich on Big Tech Through a Progressive Lens

Sarah Oh:

Hi, and welcome back to Two Think Minimum. Today is Wednesday, February 2nd, 2022. I’m Sarah Oh, a Senior Fellow at the Technology Policy Institute. I’m here with my co-hosts, TPI Senior Fellow and President Emeritus Tom Lenard, and TPI President and Senior Fellow Scott Wallsten. Today, we’re delighted to have as our guest Adam Kovacevich. Adam is the founder and CEO of the Chamber of Progress, a new, center-left tech industry policy coalition promoting technology’s progressive future. The organization works to ensure that all Americans benefit from technological leaps and that the tech industry operates responsibly and fairly. Adam is a veteran Democratic tech industry leader who has had a front-row seat for more than 20 years in the tech industry’s political maturation. Thanks, Adam, for coming on to Two Think Minimum.

Adam Kovacevich:

Thanks for having me. 

Sarah Oh:

Well, it seems like big tech is on the defensive in 2022. What is a bigger threat at home or abroad, the self-preferencing legislation going through Congress or the Digital Markets Act in Europe?

Adam Kovacevich:

Well, I think they’re both big threats. Frankly, they actually do much of the same thing. The heart of the Digital Markets Act proposal in Europe is indeed a ban on self-preferencing by the big tech platforms and similar to legislation in Congress, it draws its scope in a very narrowly targeted way to only cover really the top platforms. So, I think they’re all a big threat. I also think, frankly, that they represent a threat to the millions of consumers who are relatively happy using these services, right? Amazon Prime has something like 150 million US users, which is a considerable number and they would all be impacted by the bills by Senator Klobuchar and Congressman Cicilline with regards to the Digital Markets Act. I think the impact there in terms of the US tech companies is much more about frankly, US jobs and workers, to the extent that for example, the Digital Markets Act would prohibit Apple from selling a new iPhone in Europe that couldn’t come with iMessage or FaceTime pre-installed because that would be privileging its own services, but a Samsung phone sold in Europe could in fact, come with its own services. A consumer in Europe would be facing a choice, for example, between a fairly dumb Apple iPhone and a more robust Samsung phone. I think that’s pretty clear that would put Apple in that situation and its US brethren at a competitive disadvantage in the European market. So, I think the threats are different. I think frankly, the threat from the legislation in Congress is much more of a threat to the way the consumers depend on these services in the US. With the Digital Markets Act, the threat is much more to American workers.

Tom Lenard:

Adam, could you talk a little bit about kind of the big picture, the relationship between what tech’s position is, I mean, you’ve called your group the Chamber of Progress. There seems to be a big gap these days between progressives and the tech industry. Also related to how things have changed between when you were at Google and how they are now.

Adam Kovacevich:

Absolutely. My first job in politics was working on Capitol Hill for Congressman Cal Dooley from the central valley of California. And he was one of the co-founders of the New Democrats group that still exists today, very much styled in the Clinton-Gore mode of centrist Democrats. And one of the first things they did was really embrace Silicon Valley. They would do trips to HP and Cisco and Intel and be excited to see a lot of the innovation happening at those companies. And so that was formative for me. And frankly, I think that for a long time, Democrats tended to view tech almost as our industry or their industry, right? In a way that they didn’t do with other industries, the energy industry or healthcare, for example. I think frankly, all that changed in 2016. I don’t think it should have, but I think a lot of Democrats went from seeing technology as something that helped get Obama elected to something that the Russians used to get Trump elected in a very kind of brute force perception.

I also think that many Democrats frankly, started misinterpreting where their own voters were and went from almost believing that tech can do no wrong to acting as if tech can do no right. And fundamentally, I don’t think that’s where most Democratic voters are. I do think there is a very visible, noisy contingent of Democratic, some voters and particularly some activists who are very vocal, active on Twitter, active in journalism, who tend to think the worst tech. They tend to think that tech services are predatory or manipulating people in the background, but my feeling, and this is borne out by some polling we’ve done as an organization, is that there are other communities of even Democratic voters who are either really satisfied with services or big users of Amazon prime, Instacart, DoorDash, Uber, Lyft, et cetera, and are therefore pretty happy or who are hoping that more tech related jobs and opportunity come their way, right? Who appreciate the opportunity to be a gig driver, or work at an Amazon warehouse and who are not anti-tech, who look at something like cryptocurrency and they think, well, that’s something I want to be a part of, not something that scares me.

So, I worry that Democrats are misreading their own voters’ perceptions. And the reason why I started Chamber of Progress was because I do think it is possible to be a proud progressive Democrat who wants to achieve more equality, more opportunity in society, and also be positive about technology and view technology as a tool to help do that.

Scott Wallsten:

If people are not in favor of the direction Congress is going, or particularly Democrats are not in favor of the direction their representatives are going in, why are the representatives going this direction? I mean, you said you think they’re misreading the public, but politicians are pretty good at reading polls. They live and die on polls. Why, in this particular case, are they so wrong?

Adam Kovacevich:

Well, I think there’s two things. One, I do believe that if you ask even most voters, do you think tech, particularly big tech, should be more regulated? Most surveys I’ve seen about 70% people say yes, that makes sense to me. In this country, we tend not to like big things. We tend to be worried about anything big. We don’t use the word big in a positive sense, but I put a big asterisk next to that finding because the details really matter. 

Okay. What then do you propose to do? I think we’re entering the stage of the tech policy debate where  hopefully we’re moving from, we got to do something about big tech to, okay, what do you propose to do? What are the pros? What are the cons of that? What are going to be the effects of it? And is this something we want to actually do?

And that is a good step. I think that’s part of tech’s maturation as an industry. It’s also part of having a conversation about tech regulation, the way we’ve done for decades, about transportation regulation and healthcare regulation and energy regulation. We cabin the bad. We promote the good. That makes sense. But I think we’re heading into that type of conversation. And I do think there are really interesting examples. So, one of my favorite examples of, I think politicians’ incentives being a little bit different, was the vote in California two years ago around gig work. So, California at the behest of organized labor, imposed AB-5. It reclassified independent contractors as full-time employees. They immediately saw backlash in the legislature. They exempted a hundred plus occupations, but they left gig drivers and workers. The gig companies ran a ballot proposition. They succeeded and it won by 18 points, I think, pretty significantly, in a blue state like California. What that tells me is that the incentives of the state legislators were to do what organized labor was encouraging them to do, not necessarily what their voters wanted, which was to respect the wishes of the drivers to remain independent contractors. That to me is a little bit of a political market failure and what we’re hoping to try to correct among Democrats on some of the issues we work on.

Tom Lenard:

As far as the antitrust legislation is concerned, whatever it is, there are four or five pretty major bills that are at various stages, obviously bills have been voted out in committee in both the House of Representatives and the Senate. Do you or your members see anything good in those bills?

Adam Kovacevich:

I think there are some bills in the House side, for example, there’s one bill that would bulk up funding for the FTC and the DOJ by increasing fees on mergers. I think that’s a good idea. The fact is the agencies are underfunded and merging parties paying a little bit more money on their million dollar mergers I think is totally fine. I also think there’s some interesting ideas around data portability that would give consumers more ability to move their data from one service to another. Of course, you want to do it in a privacy protective way. And so there are details that still need to be worked out. I don’t think there’s any value in a ban on self-preferencing, and I think the fact is that consumers actually like most of the self-preferencing that services do. Senator Padilla from California, progressive of Democrat, at the hearing on Senator Klobuchar’s bill two weeks ago made exactly this point. He said, I think most people like that they can go to Amazon or Google, search for a restaurant, product and get it within a click or two. That’s convenience. When you buy a new car, it comes with windshield wipers and seat warmers and a radio installed. We don’t make you go out and buy all of those things. Yet, that is what bills like the Klobuchar and Cicilline bills would do. I don’t think a ban on self-preferencing, it’s really a ban on kind of an integrated experience that most consumers like.

Tom Lenard:

Do you think acquisitions by the big companies should be made more difficult?

Adam Kovacevich:

It’s an interesting question. We, as an organization, haven’t really weighed in on that. I think that the big companies are self-policing about big acquisitions. I think they know that big acquisitions are going to be a political headache, even if they think they can eventually win on the law. They’re also kind of a pain to integrate. A lot of them are flops as a business proposition. Frankly, I think all of these things are the reason why most of the big tech services with the exception of Microsoft, most of their acquisitions are really small acqu-hires where they’re acquiring a small company in order to acquire their teams to work on a particular product. Those almost always fall under the threshold for review, and I don’t think anybody’s really attacked acqu-hires as a strategy. So, I think that there’s a lot of people in the venture capital community and the startup community who oppose those ideas because what they want, is they want to have more potential buyers for a startup. When the IPO path maybe fails, they want to have a plan B of sale. They want to have as many potential buyers as possible. But I think frankly, the big companies are already self-policing about deals to a large degree.

Scott Wallsten:

Let’s go back to self-preferencing for a moment. I’ve written that I agree with what you’ve said. I’ve written it several times, including things like store brands, Amazon Basics, I think are great, but should there be some kind of limit to it? So, for example, I don’t know what the parameters on that would be, but Amazon has a view of markets that almost nobody else has. It knows the demand and supply conditions of all of its potential competitors in any given market space. Is that okay?

Adam Kovacevich:

Well, I want to give credit to the argument that is put forward on the other side, and it’s essentially what people call a monopsony argument or harmed supplier’s argument. I think the harmed supplier’s argument is in fact driving a lot of the antitrust policy discussion right now. It’s not really, and in fact, the proponents of these bills aren’t really arguing that consumers are being harmed. They’re arguing that the suppliers are being harmed. That Yelp is being harmed by Google. That Spotify is being harmed by Apple and so forth. That a small business is being harmed by Amazon. I think if there were to be a principle, for example, that said that a marketplace couldn’t, for example, have visibility into the sales of products, it would have to be enforced consistently. Right? So that’s, I think one problem you see with a lot of these bills, frankly, is that because they start with, well, we got to do something about big tech, they’re written pretty explicitly to only apply to Apple, Amazon, Meta, Google, and Microsoft.

But if you said, “Look, I don’t think Amazon should have that visibility, but I also don’t think Costco should have that visibility.” Then that’s fine. Let’s debate that, but that’s not what’s going on. It’s just saying, I don’t think Amazon should have that visibility. So, if we want to have a debate about store brands or structural separations, let’s have that debate, but I don’t think that’s really what’s going on right now. I think it starts with, we got to do something about the big five, and I don’t think that’s a very principled way of doing policymaking because it invites what we’ve seen in Congress, which is really kind of crony-istic lobbying by companies to be out of scope for it.

Scott Wallsten:

So, ultimately you don’t think that there are deep questions that they’re thinking about. It’s really, it all goes back to, “Hey, these guys are too big.”

Adam Kovacevich:

No, I think the fundamental truth about tech policy debates right now is that most debates start from, we got to do something about big tech. They have too much power, and then the debates split off into what should we do? There’s an antitrust strain. There’s a speech, content moderation strain. There’s a privacy strain. There’s all these strains, but fundamentally it’s all about anxiety, about the power of big tech, which again, I understand, I think you’d be foolish not to deny the power of the big tech companies, but we should have debates about the pros and cons of the particular regulations that have been proposed.

Sarah Oh:

We had talked about the bills in a different segment in another episode, and some of those bills, they have cutoffs, like certain companies with X number of users and market cap. They’re meant to kind of cabin those four big companies. And there is a question of whether Microsoft should fit into that or not. And isn’t that a bill of attainder problem if you’re legislating or enforcing just to get after certain entities or people, not for causes. So, there’s a constitutional issue there.

Adam Kovacevich:

There could be. And I think that’s certainly something that could be challenged about it. I just think even more apart from the question of the constitutionality, is it a good way to do policy? I don’t think it’s a good way to do policy. And frankly, I think if you were to be on a fly on the wall of the lobbying that’s happened on Capitol Hill around these bills, I think you’d see a lot of just kind of icky lobbying by companies to argue about rule us out rule in, right? For example, the bills don’t really touch any of the biggest companies in the home states of their sponsors, right? I don’t think that’s accidental. To me then, that kind of [inaudible] the question. Okay, well, if so, many companies look at that and they say, “My biggest concern is making sure it doesn’t apply to me,” then you start thinking, “Well, is it a good idea?”

Or even if a policymaker said, “Well, I don’t want that to apply to biggest company in my state.” Well then why do you think it’s a good idea period? If you think it’s a good idea, you should apply it to everyone. I kind of analogize, you know, I remember years ago there was a moment. I think it was 2009, where there were a lot of people getting stuck on airplanes for like five, six hours. And it led to Congress pushing the FAA to put in place a three-hour tarmac rule, which was a very effective, tailored regulatory intervention applied to all airlines. They didn’t break up Delta airlines. They didn’t tax United airlines. It applied to everyone, and it worked. Within a matter of months, it actually had the desired impact. And so, I do think you should start policy making for, “Okay, what’s the behavior that we think is problematic? And if we think it’s bad, it should be bad for everybody.”

Tom Lenard:

Speaking of lobbying, as a political analyst, what do you think of the prospects for these various bills?

Adam Kovacevich:

Well, I think you have seen in the House since last June where the Cicilline bills were passed, really an absence of any movement. I think for the reason that you have to remember that the Judiciary Committees in both the Senate and the House have the most extreme partisans from both parties on it. Judiciary Committees are normally dealing with judges on the Senate side, guns, abortion immigration. So, it tends to attract the most conservative and the most liberal members. Moderates don’t often want to be on the Judiciary Committees. And so, once a bill gets passed out of the Judiciary Committee, then it faces this question of, “Okay, how does the rest of the Congress feel about it?” And particularly, by the way, how does the rest of the majority party feel about it? Because party leaders, Speaker of the House or the Senate Majority Leader tend not to bring bills to the floor unless their entire side is unified behind them.

It doesn’t really advantage them to highlight party disunity. And so, I think on the case of the Cicilline bills, they don’t have a unified Democratic vote behind them. There are plenty of members of the California delegation, as well as members of the New Democrat Coalition, the Blue Dog Coalition who have raised significant concerns. And today, Congressman Cicilline hasn’t really shown any interest in modifying his bill to address those concerns. I think you’re going to see a similar dynamic on the Senate side, frankly, where more moderate members, more moderate Democrats in particular, are starting to raise more questions about it. I think they look at the hearing and they say, “Well, if Senators Leahy and Coons and Feinstein and Padilla all raised questions about these bills, maybe those are questions that we want to have answered too.

Scott Wallsten:

Yeah. We’re talking about how a bill becomes a law and that’s sort of related to how does something become a bill? These bills are targeted at specific companies, as you’ve said clearly, but sometimes that list includes Microsoft and sometimes it doesn’t. What has Microsoft done differently, or what is different about Microsoft that has allowed it to not be the target of so much of the criticism?

Adam Kovacevich:

Well, I think partly they’re an enterprise company. Most of Microsoft’s business is serving businesses, and Congress tends not to pay as much attention to enterprise companies. A lot of them have been to the Oracle townhouse for fundraisers, but probably most of them couldn’t tell you what Oracle does, what Oracle’s business is. And so, I think to some degree that’s affecting Microsoft, but the fact is they actually do have a number of consumer products, which I think is kind of interesting. I think they have more consumer products than I think people realize. I think they’ve also taken steps to concede to different ideas. They endorsed, for example, Congressman Cicilline’s bill to give the news industry an antitrust exemption in order to negotiate with Google and Facebook. I’m sure Google and Facebook weren’t very happy about that, but it probably pleased Congressman Cicilline that Microsoft was endorsing their bill. And so, you know, I think they…

Scott Wallsten:

You’re not brave if you endorse something that only hurts somebody else.

Adam Kovacevich:

Right. Exactly. So, I think that might be a dynamic as well.

Tom Lenard:

We’ve talked about what’s going on in Congress, but there’s also quite a bit going on in the administration as far as tech is concerned. Major appointees in antitrust and in the White House are representative of this progressive point of view in antitrust and other things. Why do you think that actually happened? And what do you think is going to come out of it?

Adam Kovacevich:

Well, I think to give credit to the neo-Brandeisian movement, which really, I think started several years ago.

Tom Lenard:

It’s really quite amazing how quickly they have become…

Adam Kovacevich:

It is. And I don’t agree with the philosophy, but I do think it is a coherent philosophy, right? Which is essentially distrust of any kind of concentrated power and fairly aggressive action to break up that power, including intervening on behalf of suppliers, right? For example, even if consumers are pleased. It’s a coherent philosophy with which I happen to disagree, that’s been building for years. And I think the neo-Brandeisian movement did a very good job of suggesting people for regulatory positions. And also, I think it did a good job of suggesting that the Obama era enforcers were too conciliatory. Now, as you know, Tom and Scott both of you, because you’ve studied the FTC for a long time, you know that I think, part of the reason why I think the FTC has operated the way it is, is because of court cases and other things heming in some of its authority when it has overreached.

And I think that that had been internalized by FTC leadership for a long time. The fact is there is very much a mood right now among Democrats, which is, we should just bring more cases. We’ve got to bring cases because we were too timid before in the Obama era. And so, I fully expect Lina Khan, Jonathan Kanter to bring more cases. What is unclear is whether they’ll win. I don’t think they’ll win a lot of these. For example, the case against Facebook for acquiring Instagram and WhatsApp, I don’t think the FTC will win that case. Currently, the FTC is facing a lot of pressure from Chairwoman Khan’s kind of activist base to bring a suit against Amazon for its acquisition over MGM. Were she to bring that case, I think they would lose that case as well. But then you sort of say, “Well, what are they after? Are they trying to win? Or are they trying to lose and perhaps make a point in losing? Well, I tried, but I couldn’t overcome the tilt of the courts, right?” 

There is definitely a tension here between bringing kind of the aggressive case that is more likely to lose versus bringing the kind of more narrowly tailored case that might actually have a better shot at winning. And right now, all the energy among the appointees and the administration is we’ve got to bring the aggressive case. And so we’ll see what happens. I expect they’ll lose a lot of those cases. The way I sort of think of it is they have a strong bark, but their bite is uncertain because it’s yet to be seen kind of what their strategy is in terms of aiming to win or aiming to kind of shoot for the moon.

Scott Wallsten:

It sounds like the executive and legislative branches have pretty much the same strategy. They’re both shooting for the moon. Are they complementary efforts? Do you think progressives would be happy if the FTC were bringing narrower cases that would be more likely to win?

Adam Kovacevich:

Well, I also would say too, that I think that has become an article of faith among many Democrats that midterm election losses are almost impossible to avoid. And so, as an administration, you should try to do your most aggressive steps in your first two years. I don’t think that’s a wise strategy because I don’t think midterm losses are unavoidable, but I think that has become an article of faith. And so, I think for example, right now, I want to see Democrats do well in the elections in the midterm to be clear, but I think many congressional Democrats believe, particularly in the house, that they’re not going to do well. And so, there’s kind of a little bit of an attitude of, “Well, we got to kind of shoot for the moon now, because now is our shot.”

Tom Lenard:

You said you were in favor of more funding. Is there a little bit of a tension between the funding issue? And if you think they’re going to use that funding to bring misguided big cases, maybe the best thing to do is not to give them more funding?

Adam Kovacevich:

I don’t necessarily agree with that. I think that there is a lot of things that the FTC can take on. You can have disagreements about the cases that they bring. And I do think that one of the things that will natural really happen is if the FTC or DOJ pursue aggressive cases and lose, then it may force a shift in strategy. I do think one of the things that I would take a look at if I were them, is what happened during the Trump administration with the case the DOJ brought against AT&T-Time Warner. Everybody knows, philosophically speaking, there’s not a problem with that. It was a vertical acquisition. Most conservatives have no problem with vertical acquisitions, but everybody also knew that Trump really hated CNN. And so I think the DOJ brought that case because they knew Trump really hated CNN. They lost the case. And in losing the case, the courts reaffirmed longstanding jurisprudence in support of vertical mergers. So, what was achieved? What ultimately was achieved was a reaffirmation of the precedent in favor of vertical mergers. So, I do think that that’s something that might come from losses here, is a reaffirmation of existing precedent in a way that may not be helpful to the neo-Brandeisian cause.

Sarah Oh:

I have heard the line of reasoning, “Well, the courts are too focused on economics, or now we have to change the courts. The cases were lost in the courts. Then we have to change the courts understanding the antitrust.”

Adam Kovacevich:

Yeah, I think that is a theory. And by the way, I mean, Biden has appointed a number of judges to open positions and the courts will change, because the courts always change with new presidents making appointments. So, I think that that’s certainly possible, but it’s also the case there have been even Obama appointees that have upheld, for example, the consumer welfare standard in antitrust cases. And so, I think that again, to the extent the neo-Brandeisian movement sees this as a long process, they probably are looking to kind of build kind of a set of jurisprudence and academic writing and kind of foundational work to get to their ultimate end goal. But we’re going to have debates along the way. And that’s great. We should have debates along the way. We should, in fact, debate whether something should be blocked because it helps a supplier, even if that hurts a consumer. Let’s have that debate.

Scott Wallsten:

You talked about the way that the Trump administration tried to misuse these agencies. That kind of begs the question of if you’re a Democrat in Congress now, and you’re promoting something that Josh Hawley is so fervently in favor of, shouldn’t that worry you a little bit? I mean, what happens if you give these agencies more power and then this group of people is in charge again? I mean, will they use it in ways that would be not good.

Adam Kovacevich:

I’ll give you a practical example of that. Senator Klobuchar’s bill has a provision in it that bans big tech platforms from discriminating against what they call similarly situated apps and services. And during the hearing, Senator Ted Cruz said the way he reads that provision, it would prevent big tech from censoring conservative speech and apps, right? That’s not what I think Democrats want to be doing. I don’t think Democrats want to be helping Ted Cruz deny the platform’s content moderation rights. But in fact, I think he’s right. That is in fact what the bill would do. So, I do think that, yeah, that’s exactly right. I mean, the fact is it sort of points out the competing goals that a lot of policymakers have about this and not necessarily being clear about what they’re after and how those goals conflict with each other.

Scott Wallsten:

I would be very scared of a January 6th where the government had the kinds of controls that Democrats are supporting.

Adam Kovacevich:

You’d be scared of putting those controls in the hands of government?

Scott Wallsten:

That’s right. Imagine if these existed on January 6^th, and Ted Cruz could say what Facebook could and couldn’t keep up.

Adam Kovacevich:

That’s right. There’s a big part of political tech policy debate right now, which is really just kind of working the refs on content policy and platforms, content moderation policies. Leave this up, take it down, et cetera. But that’s truthfully, there have been also several cases in the last several months that have reaffirmed platforms’ First Amendment rights to moderate content, however they see fit.

Tom Lenard:

But that is probably the other big issue, aside from antitrust, in terms of the tech industry is Section 230 and content moderation. You see anything happening in that area?

Adam Kovacevich:

I don’t see anything happening before the election in that area. My own prediction is that if Republicans take back the House in this fall’s elections, then my hunch is that Section 230 and content moderation will perhaps rise to take the sort of number one position from their perspective, with respect to the kind of the tech policy debate. I think there are more Republicans who want to have the speech debate and the censorship debate, then who really want to have the antitrust debate. So, I think that that might take the place of the interest on the House side Republicans there.

Tom Lenard:

And then the other big area, I guess the third big area is privacy. Now, I’ve been watching privacy policy for longer than I would like to remember. And everybody thinks privacy is such a popular thing, but never passed. Do you think there are any prospects for that to change?

Adam Kovacevich:

Well, I think it should change. The fact is in polling that we’ve done of voters, privacy and security are consistently the top thing that voters want policymakers to do. They want more privacy protection. They want more help against cybersecurity threats, against malware, against ransomware. They want all that. And yet, as you know, it’s hung up on conflicts between preemption and private right of action, which no one seems to really want to resolve. My expectation for this year is watch the Federal Trade Commission, because I think the Federal Trade Commission is where most of the action will be on privacy this year. And what you’re seeing play out is Chairwoman Khan has several advisors who are interested in taking action potentially to even ban targeted advertising, what they call surveillance advertising, which I think has been a huge boon to creators, to activists, to whistleblowers, basically to niche content that otherwise wouldn’t be monetized. I think it’s been a huge boon to progressive causes in speech, but they seemingly want to take aim at that. And I think that’s a mistake. That is in my view, kind of wasted energy, but they’re, as I said, shooting for the moon. There’s some interest there. So, keep eye on the FTC, because I think you’ll see more action on privacy this year at the FTC than you will in Congress.

Scott Wallsten:

On those issues banning targeted advertising, we commend to anyone work by Catherine Tucker at MIT, who’s shown some of the unintended consequences of rules like that making the problems they’re intended to solve even worse.

Adam Kovacevich:

Yeah, she’s on some great work. Agreed.

Tom Lenard:

I guess what they’re talking about at the FTC is a rule making on these issues, right?

Adam Kovacevich:

That’s right. It’s a little challenging right now because the commission is currently deadlocked two to two. So, I think Commissioner Wilson in last couple days has said she would be open to a narrowly tailored privacy rule, but that’s probably not what Chairwoman Khan will want to do if she has a third vote. So, watch that space to see whether they go for sort of a bipartisan, narrowly tailored approach, or a purely partisan aggressive approach that tries to aim in advertising. 

Scott Wallsten:

So, one of the arguments for a national privacy law, regardless of whether it’s very strict or very loose, is that it would void either a patchwork of laws across the country or having to work with the strictest common denominator. So far, there are a few state privacy laws and including CCPA, how has that played out? Have we seen companies adopting CCPA rules to use around the country, or is it kind of playing out differently than we might have expected?

Adam Kovacevich:

I think you’re seeing increased conflict right now. Most companies have adhered to the California rules and the GDPR rules, but as more and more states look at the space, the risk of conflicting state laws, I think, increases. The fact is that the patchwork doesn’t make any sense. ITIF recently put a great report on this in terms of the state-by-state privacy framework, and so I recommend that. It doesn’t make sense. People really want a unified privacy standard. But I think that Congress just hasn’t been that serious about it.

Sarah Oh:

There are items that big tech is on the defensive. How about the positive? Are there more productive legislative priorities for the future for 2022 in competition with the rest of the world and AI development and positive technology growth?

Adam Kovacevich:

I hope that Congress does take a closer look at things like consumer privacy law, action on cybersecurity, giving help to communities and small businesses to deal with ransomware. I think that frankly, there’s a lot of demand for that. I also think, one of the things I’m really interested in is cryptocurrency. And the fact is that a lot of what the neo-Brandeisians even would like to see is challenges to sort of centralized power, centralized power of big tech. And there’s a lot of potential in that for cryptocurrency and Web3 decentralized alternatives to emerge. I think the Biden administration, until now, their approach to cryptocurrency has been defined by Gary Gensler at the SEC suing companies or threatening to sue companies. But the reality is that if you worry about concentrated power of big tech, you should take steps to encourage the development of decentralized alternatives, which I think is what crypto represents. It’s still very early days for crypto. We’re still, I think, just barely understanding what the applications should be, but I’d like to see the Biden administration bring greater sense to crypto regulations and say, “Look, this something that can be a positive.”

Sarah Oh:

On that note, I think looking forward, we’ll keep an eye on what’s happening at Congress and over in Europe. So, thanks for coming on the program.

Adam Kovacevich:

This was fun. Thanks for having me. 

Tom Lenard:

Thank you. 

Scott Wallsten:

Thanks so much.