Senate Bill Targets Big Tech but Empowers Regulators over Consumers or Investors
Senate lawmakers Mark Warner (D-VA) and Josh Hawley (R-MO) have a new bill to force Big Tech firms (like Facebook, Google, and Amazon) to calculate the value of all data they collect and release the results annually. CEI experts warn about a real downside for consumers and investors of putting that kind of vast, vague power in the hands of regulators at the Securities and Exchange Commission.
Statement by Patrick Hedger, CEI research fellow:
“The Hawley/Warner legislation would do more harm than good to the tech economy because it is vague, arbitrary, picks winners and losers, delegates too much power to agencies, and inserts government into an area where markets are working just fine. It delegates vague authority to the SEC to develop a formula for measuring the value of data collected by social media firms above an arbitrary threshold, in what can only be assumed as a precursor to a new digital tax. It applies monopoly-level scrutiny to several firms that are in direct competition with one another for advertising dollars… a good sign no such monopoly exists.
“Unelected bureaucrats don’t determine value, markets do. And in this case, hundreds of millions of daily users show that Americans value providing their data rather than dollars in exchange for the services these companies provide. The Hawley/Warner bill seems to entirely ignore the fact that for user data to generate value for the companies, the companies must first generate value for the users.”
Statement by John Berlau, CEI senior fellow:
“Among the many costs the flawed Hawley-Warner bill will impose is that, due to diversion of SEC resources in enforcing these mandates, middle-class investors will be more vulnerable to fraud. This legislation distracts the SEC from its core mission of pursuing investment scams and ensuring investors have adequate information on the companies they invest in. Like all government agencies, the SEC has limited resources, and the time and money it will have to spend on developing and enforcing a formula for valuing user data of certain tech companies will be diverted from the resources it can spend in pursuing the fraudsters who prey on all investors.
“This legislation unfortunately follows in the dubious footsteps of ‘feel-good’ disclosure mandates like those contained in Dodd-Frank’s ‘conflict minerals’ provision and in proposals for complicated formulas to calculate climate costs that have little to do with ensuring the accuracy of relevant information for investors.”