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Would a Democratic sweep help or hurt Silicon Valley?

And what if Prop 22 fails? Entrepreneur Bradley Tusk games out the consequences of each 2020 election scenario.

Would a Democratic sweep help or hurt Silicon Valley?
[Photo: Muni Yogeshwaran/iStock; Filip_Krstic/iStock; OpenClipart-Vectors/Pixabay]

There’s just two weeks left until Election Day, and the polling currently has Joe Biden as the overwhelming favorite to take back the White House. Democrats look likely to retake the Senate, too. But if we’ve learned one thing about 2020, it’s that anything can happen—and you better believe that Silicon Valley lobbyists are planning for every potential eventuality. Depending on who wins the White House, the Senate, and what happens in local elections around the country, the impact on tech could vary wildly. Here’s a primer on what to expect with each possible outcome.

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If Biden wins

Biden is clearly the candidate of Silicon Valley, which leans decidedly liberal despite some pockets of conservatism. More important than ideology, however, is stability, and it’s widely assumed that having a steady presence in the White House would be a big improvement over the chaos of the past four years. Yes, the risk of someone like Elizabeth Warren being named Attorney General causes plenty of heartburn, but it’s still preferable to four more years of chaos. A Biden win would bring more stability to the tech labor market, allowing companies to make plans and actually stick to them. And while Biden hasn’t spoken much about the issue, it’s fair to assume that the restrictions Trump has imposed on immigration, especially H1B visas, will mainly be lifted, giving tech companies access once again to the international talent it desperately needs.

Of course, a Biden victory wouldn’t be all smooth sailing for Silicon Valley. Biden’s appointees to the Department of Labor and the National Labor Relations Board are more likely to believe that sharing economy workers should be classified as full time employees. Teamster objections to autonomous trucking may keep a federal regulatory autonomous framework on the shelf for four more years. And if Biden cuts spending on the military, many of the lucrative contracts the Valley enjoys from services and products ranging from weaponized drones to cloud computing could all be squeezed (although employee opposition to government contracts—particularly those with the Department of Homeland Security—is likely to dissipate without Trump in the White House).

As the political zeitgeist keeps moving to the left, both Biden and future candidates such as Kamala Harris are likely to face pressure to adopt more anti tech rhetoric—especially given Harris’s previously cozy relationship with Bay Area elites. Even more dangerous for Big Tech is the possibility that Biden finds common cause with Republicans who want to dismantle or rewrite Section 230 of the Communications Decency Act, which provides internet companies with immunity from liability for content on their platforms, and which Biden has said should be “revoked.” And if Biden’s Justice Department files suit against Facebook for antitrust violations, expect a standing ovation from Senate Republicans.

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If Trump wins

It’s getting harder and harder to imagine, but no one thought he could win in 2016 either. If Trump does hang on, it means more of the same. The House will remain controlled by the Democrats, meaning that the chances of compromise legislation on any major issue are between slim and none. (Trump will occasionally feint toward working with Nancy Pelosi on an infrastructure bill or prescription drug reform, but that’s just posturing.)

Trump’s position on immigration will only harden, with deportations becoming even more prevalent, making it ever harder for tech firms to recruit and maintain talent. His behavior will remain erratic, keeping the markets on edge on an hourly basis. He’ll probably push hard to repeal Section 230, given the perceived anti-conservative bias of Facebook and Twitter, especially in recent days, but Democrats will be unlikely to go along. (Many Democrats, including Biden, also oppose Section 230, but won’t want to rewrite the law on Trump’s terms.)

On China, there will be danger of new trade war escalations. The bans we’ve seen on WeChat and ByteDance will likely extend to other Chinese tech companies, too, pushing China to retaliate in kind. American tech companies with significant exposure to Chinese markets, or who rely on Chinese manufacturing and supply chains, may be in trouble. But, the risk of a wealth tax disappears with a second Trump term, and tech billionaires don’t have to sweat any democratic socialists in the president’s cabinet. Despite that, it’s difficult to envision many people in tech wanting four more years of any of this.

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If the Senate flips

With a Democratic Senate comes Democratic control of the upper chamber’s committees, subcommittees, and legislative agenda. Among the senators likely to ascend to leadership positions is Amy Klobuchar, who has proposed a new antitrust law and backed legislation that would help prevent anticompetitive mergers. Elizabeth Warren, assuming she stays in the Senate, is always locked and loaded. And there are a number of Republican senators, including Chuck Grassley, Marsha Blackburn, and Josh Hawley, who might be willing to help Democrats cut some tech companies down to size.

Is it realistic that Congress will enact an entire regulatory structure on privacy laws and repeal Section 230 and pass new antitrust legislation all within two years? No. Time is limited, and Democrats will be in a rush to reform healthcare and shore up a COVID-rattled economy. But every one of those antitrust issues is now on the table.

Of course, this is only bad if you’re Facebook or Google or another company valued in the hundreds of billions of dollars. For smaller tech companies, Congressional action could create new opportunities to compete, to innovate, to build products and services without immediately being squashed by one of the giants. So while a Democratic Senate is unquestionably challenging for Big Tech, it’s not necessarily bad for the tech ecosystem overall.

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If Prop 22 fails

Everyone is paying attention to who controls Washington, but don’t sleep on state politics. Proposition 22 is a ballot measure in California that would overturn AB5: legislation passed in Sacramento last year that classifies all Uber and Lyft drivers, all Door Dash and Postmates delivery people and most other sharing economy workers as full time employees. After losing badly in the state legislature, the tech giants have spent nearly $200 million to convince voters to undo Sacramento’s decree. The consequences for either side would be huge—and have implications that resonate far beyond California.

There isn’t a lot of public polling available on the issue, but a survey from late September showed the race essentially tied with 39% supporting Prop 22, 36% opposing, and 25% undecided. If after nearly $200 million in spending, the race is still tied, that’s a bad sign for the proponents.

If Prop 22 is rejected by California voters, aggressive campaigns will pop up in blue and purple states across the country to reclassify sharing economy workers as full time employees. And if Biden wins the White House and the Senate flips, national legislation might begin winding its way through the Capitol, too. On the other hand, you can always count on politicians to read the tea leaves and do whatever helps them most in the next election, so if Prop 22 passes, much of the air fueling the worker classification movement could deflate overnight.

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The true lesson of 2016 is that no one knows anything. But polling methodology has improved since then, and if the federal government turns bright blue, big tech is in for a reckoning that’s probably long overdue. Even Mark Zuckerberg might prefer that to Trump, if a crackdown comes with some peace and quiet.


Bradley Tusk is a venture capitalist, writer, philanthropist, and political strategist.

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