Now that the Biden administration has announced a transition team and is gradually announcing key advisory and cabinet appointments, the posture of the new administration toward Silicon Valley is becoming clearer. And it’s not the look of a budding friendship.
When Biden last worked at 1600 Pennsylvania Ave., the White House had an open and friendly relationship with Silicon Valley. For example, the Obama administration also recruited talent from Silicon Valley to form the U.S. Digital Service, the elite technology “startup” within the White House that helped government agencies streamline systems and exploit new agile development methods. Obama also created the position of U.S. chief technology officer within the Office of Science and Technology Policy.
From a regulatory standpoint, the tech industry enjoyed a light touch during the Obama years. Its relationship with the Biden administration will likely be different and less trusting. That’s one of the reasons it’s closely watching the formation of the new Biden administration, now in its beginning stages.
There’s a lot to watch, since so many government agencies now impact the business of tech. Some high-level appointments, such as Ron Klain as chief of staff, will deal with a broad spectrum of issues, many of which don’t touch tech directly. But others, like the appointment of Janet Yellen as Treasury secretary could, for example, have implications for digital currencies and other financial tech.
“There are enormous fintech issues that will be facing the financial regulators, most principally the office of the Comptroller of the Currency, but some issues that’ll touch upon the FDIC, Federal Reserve ,and Treasury as well,” says Jeff Hauser, founder and director of the Revolving Door Project, which tracks presidential appointees who come from various industries.
Antitrust under Biden
Of chief concern to Big Tech is the Biden administration’s thinking on antitrust. Proposals for breaking up big tech companies in the last couple of years from people such as Massachusetts senator and former presidential candidate Elizabeth Warren have ridden a wave of populist feeling in the country. The Department of Justice has already filed an antitrust lawsuit against Google in federal court, and the Federal Trade Commission is reportedly in the final stages of deciding whether to file its own suit against Facebook. The agencies are also conducting investigations into alleged anticompetitive aspects of marketplaces run by Amazon and Apple. The Valley is waiting for Biden to announce his attorney general and FTC chair, which could tell a lot about the new administration’s plans to control Big Tech.
Eric White, Seismic Capital Company
I don’t think this administration is going be kind to Big Tech in general.”
Biden also also supports revoking the legal immunity provided to tech companies in Section 230 of the Communications Decency Act, which shields platforms such as Facebook and Twitter from lawsuits over their decisions to host, or remove, harmful or misleading user content. If these legal protections were revoked, any internet company that hosts and moderates user content could be subject to civil lawsuits. This might cause social media companies to be far more careful about the content they allow. They might also be forced to spend more resources on defending lawsuits, something larger platforms can afford but that might overwhelm smaller ones.
The Trump administration has been hot to dismantle the Section 230 protections, too, but for different reasons. Trump signed an executive order calling for legislation that would revoke 230’s legal shield for social media giants—but only in apparent retaliation after Twitter applied a fact-check label to a presidential tweet for the first time.
“I don’t think this administration is going to be kind to Big Tech in general,” says Eric White, who in the 1990s served as an adviser to the Clinton White House and now runs the early-stage growth investment firm Seismic Capital Company. “I don’t know the individual companies they’re going to take a look at it, but it’s just true generally that Democratic groups . . . look at monopolies as being anticompetitive.”
Harris and Big Tech
VP-elect Kamala Harris may exert some influence over Biden’s antitrust policies. Harris has been very friendly with Silicon Valley over the years. She started her political career as district attorney in San Francisco, and both of her runs for California’s attorney general were boosted by significant donations from tech industry elites such as Laurene Powell Jobs, Facebook COO Sheryl Sandberg, and venture capitalist Ron Conway. (She’s even got family connections with tech: Her brother-in-law Tony West is chief legal officer at Uber.) Harris won’t take the lead on the incoming White House’s policy on antitrust. But as the former attorney general of California, she’ll likely have a say in Biden’s choice for attorney general, who will help drive the policy. Still, Harris is a savvy political player and isn’t likely to act as a cheerleader for her Big Tech friends—on antitrust or anything else.
Both Harris and Biden are keenly aware of changes in the government’s posture toward tech companies during the latter part of Obama’s second term and all of Trump’s term. Big Tech now finds itself at the center of a culture war, with a huge portion of the population—both on the left and the right—convinced that big tech companies such as Twitter and Facebook are dishonest, politically biased, and coercive. There’s now considerable political energy on both sides of the aisle for imposing new regulations on large tech companies.
The progressive wing of the Democratic party erupted with criticism when a report said that the Biden team was considering ex-Google CEO Eric Schmidt for a key technology task force. The Biden team was quick to deny that it had short-listed Schmidt for any task force or role.
Tech appointments so far
Bruce Reed, Biden’s chief of staff when he was vice president under Obama, will be President-elect Biden’s top technology adviser. This is especially intriguing because of Reed’s deep involvement in passing California’s landmark data privacy bill—the California Consumer Privacy Act—in 2018. Reed is said to have negotiated language in the bill that won Apple’s support, after which the rest of the industry fell in line. Several federal bills borrowing from the California law have been floated in Washington during the Trump years, but none have come close to passage. Reed could play a key role in moving such legislation forward.
“He’s always been known as a really smart, thoughtful guy and a big brain, who understands the world around him pretty well, [and holds] no grudges,” says White, who, like Reed, was an adviser to the Clinton White House in the 1990s.
Last Friday, Biden named a former Yahoo and Facebook executive, Louisa Terrell, to lead his legislative team in the White House. Along with her stints in the tech world, Terrell worked in legislative affairs in the Obama White House and was a deputy chief of staff for Biden when he was a senator. She’ll play a critical role in helping foster dialogue between the White House and the Senate to get future COVID-19 relief funding passed. She might also be a central player in pushing major tech legislation such as privacy regulation or antitrust reform.
Tech and the transition
Biden’s transition team, which was announced earlier this month, got lots of attention for its high number of names from tech circles. While some of the people on the list may give indirect clues to Biden’s thinking on some tech issues, their importance shouldn’t be overthought. In many instances, their selections probably have more to do with their past relationships with Biden in government than they do from an openness to tech’s agenda. Moreover, while people appointed to the transition team are sometimes offered permanent roles within the administration, their main job is developing and vetting lists of the best candidates for the thousands of agency and cabinet jobs that need to be filled in short order.
Biden’s general counsel for the transition team, Jessica Hertz, served as general counsel in Biden’s office when he was vice president. Since then, she spent more than two years doing regulatory work for Facebook in Washington. She left the company in June 2020. Now she’s charged with managing conflicts of interest and other ethics questions that arise during the transition, including limiting the influence of lobbyists.
The Revolving Door Project’s Hauser calls Hertz’s appointment “deeply disappointing.” Still, he points out that it was Hertz’s history with Biden that likely won her the job. “The decision to bring a person like her on is because of a previous relationship and maybe a trust relationship, regardless of whether she worked at a tech company or not,” Hauser says.
The same can be said for ex-Apple lobbyist Cynthia Hogan, who left her role as Apple’s VP of public policy last spring to join the committee that vetted Biden’s picks for VP. Hogan has stayed on as a senior staffer on the transition team. But her experience with Biden started long before her work for Apple. She was his chief counsel when he was in the Senate, and then again when he became vice president.
Arthur Plews, who works in strategy and operations at Stripe, was named to the transition team to help staff positions in the Small Business Administration. Plews served as chief innovation officer at the SBA under Obama.
Others on the transition team are more noticeable for their current roles in tech than their past roles in politics.
Robert Atkinson, who is president of the Information Technology and Innovation Foundation, was named to the Biden Innovation Policy Committee. The ITIF counts a number of big tech companies, including Google and Intel, as paying members.
Environmental initiatives—if they make it through the Senate—could bring new money for green tech and clean tech companies.
Brandon Belford, who is senior director/chief of staff at Lyft was named to the Office of Management and Budget Agency Review Team. He was also on Apple’s Public Policy Special Projects Group from 2017 to 2019. Also on the OMB Agency Review Team is Airbnb senior manager Divya Kumaraiah and Amazon Web Services enterprise strategist Mark Schwartz.
Uber’s chief trust and security officer Matt Olsen was named to the Intelligence Community Review Team.
The Biden years ahead aren’t expected to be easy ones for Big Tech. But people in Silicon Valley can at least be thankful for an administration that will be less chaotic and unpredictable than the Trump era.
And Biden’s tech plans are wider than just regulation. If some of his environmental and infrastructure initiatives get funded, it could mean good things for tech companies. Biden has plans for large-scale infrastructure projects, which would almost certainly include funding for extending broadband coverage and closing the digital divide. That could create new business for tech and telecom companies, and create new markets for digital services. New environmental initiatives—if they make it through the Senate—could bring new money for green tech and clean tech companies, and more incentive for venture firms to invest in them, as Seismic’s White points out.
The people brought into the new administration to carry out those initiatives could end up mattering as much to the tech industry as those brought in to deal more directly with core tech issues.