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Chevron decision jeopardizes Biden’s plans to crack down on Big Tech

Chevron decision jeopardizes Biden’s plans to crack down on Big Tech

Chevron decision jeopardizes Biden’s plans to crack down on Big Tech

The Biden administration’s aggressive push to regulate tech and telecom giants like Google, Meta and Verizon has relied on the power of federal agencies, which have proposed sweeping rules for the internet age amid congressional inaction.

The dynamic has given outsized influence to law enforcement officials at the Federal Trade Commission and the Federal Communications Commission, among other agencies, who have pushed to rein in alleged misconduct by industry titans.

The strategy is now under threat after the Supreme Court restricted the agencies’ powers in a landmark ruling, overturning a decades-old legal precedent that gave agencies greater leeway in interpreting ambiguous federal laws. The court’s decision Loper Bright Enterprises v. Raimondo By striking down a principle known as Chevron deference last week, business and industry groups have given ammunition to thwart the administration’s proposed tougher technology regulations, jeopardizing some of the most significant steps ever taken by the U.S. government to rein in the world’s most powerful corporations. If they succeed in stopping regulation, the United States could fall even further behind its European counterparts, which have moved more quickly to establish new rules.

The agencies are pushing a range of proposals to increase oversight of the technology and telecommunications sectors, including restoring Obama-era net neutrality regulations, imposing new data privacy regulations on companies and requiring gig economy workers to be treated as employees.

The full impact of the decision is unclear and is likely to play out over many years, but it is intended to put pressure on Congress to legislate on the technology, a prospect many consider distant.

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“What this has really done is created a tremendous amount of uncertainty about everything,” said Harold Feld, senior vice president of the consumer advocacy group Public Knowledge.

In April, the FCC reinstated net neutrality regulations that allow for greater oversight of Internet service providers (ISPs) like Comcast and AT&T are making good on a signature promise from President Biden. But the Supreme Court’s Chevron decision already has telecom lawyers racing to determine whether it could undo the agency’s plans. Others say the impact could be felt even more widely, involving rules meant to prevent “digital discrimination.”

United States Court of Appeals for the Sixth Circuit is considering filing an industry lawsuit alleging that the agency’s net neutrality order amounts to regulatory overreach. On the same day as the Brilliant Loper Following its decision, the court asked the Ohio Telecommunications Association, the Texas Cable Association and other parties in the case to file briefs by Monday on how the new ruling affects their case.

Helgi Walker, an attorney representing wireless telecommunications association CTIA in proceedings against the FCC, said Loper Bright would be “very helpful contextually” to its case. Walker said courts “should be skeptical” of the agency’s authority.

Andrew Schwartzman, senior counsel at the Benton Institute for Broadband and Society, which is working on the case in support of the FCC, said he plans to argue that Brilliant Loper “The decision does not affect the net neutrality issue much, if at all,” he said, though he acknowledged that it has complicated the picture. “The decision will undoubtedly make it much more difficult for the FCC to defend its decision in the years to come,” he said.

The FCC said in a statement that it is reviewing the impacts of Brilliant Loper The Supreme Court said the FCC’s decision did not undermine its net neutrality rules because it “did not rely on Chevron deference for authority.” But the Supreme Court had already linked the two, invoking Chevron deference in a 2005 case that upheld the FCC’s regulatory power over internet provision.

Meanwhile, FTC critics are celebrating the Chevron ruling, warning it gives them a new stick to beat back any attempts by the agency — a linchpin of the Biden administration’s efforts — to expand its authority over technology.

“The FTC should think twice before trying to implement comprehensive privacy or artificial intelligence rules,” said Daryl Joseffer, senior counsel at the Chamber of Commerce’s litigation center, which has filed more than a dozen challenges to the Biden administration’s attempts to rein in big business.

The FTC has proposed tougher rules to combat the use of AI for phishing, but has not yet launched a broader effort to craft rules for AI use across the economy.

Consumer advocates have expressed concern that the Supreme Court’s ruling could hamper future artificial intelligence efforts across the federal government.

Tom Wheeler, who served as FCC chairman under former President Barack Obama, said that “our digital realities are now empowered by AI,” and yet “it seems as if the Supreme Court is simply limiting the ability of expert agencies to deal with the impact of that digital revolution.”

The FTC has separately been exploring sweeping new rules to crack down on what it calls “commercial surveillance” — the mass collection and sale of consumers’ personal data that is the lifeblood of large swaths of the technology industry. The Chevron decision could give fresh ammunition to business groups like the Chamber of Commerce. to target any rules that arise from that process.

Ryan Quillian, a former manager of the FTC’s technology enforcement division, said the agency’s ability to rule on consumer protection issues like privacy has generally been less questioned, but Chevron could be a factor in areas where they are “trying to expand their authority,” such as around unfair methods of competition.

“We do not expect the court’s ruling in Chevron to have a significant impact on the agency’s efforts to protect consumers on issues like privacy and safeguard fair and competitive markets, including for innovative new products like artificial intelligence,” said FTC spokesman Douglas Farrar.

Joseffer said the “demise of Chevron” is also likely to be “materially important” in an ongoing lawsuit filed by the Chamber of Commerce and other business groups to stop a Labor Department rule aimed at preventing gig economy companies from treating workers as contractors rather than employees. The department did not respond to a request for comment.

White House spokeswoman Robyn Patterson said the Chevron ruling “does not change the president’s unwavering commitment to protecting Americans from the harms associated with social media and other emerging technologies” and that it “underscores the importance of the actions President Biden has already taken, as well as the urgent need for Congress to pass legislation.”

According to Jason Mulvihill, founder and president of Capitol Asset Strategies, a regulatory and policy consulting firm, many in the tech industry view the Supreme Court’s decision to overturn the Chevron decision as a positive. Mulvihill predicted the ruling will make “laws more targeted and regulators more humble.”

But Nik Marda, technical lead for AI governance at Mozilla, said agencies have been one of the “bright spots” in establishing effective guardrails for tech companies as Congress has struggled to pass tech regulation. Government agencies also have more technical expertise than Congress or the courts, making them better at tracking and understanding changes in technology, he said.

Steven Augustino, a tech regulatory attorney at Nelson Mullins, called the idea that lawmakers could close more loopholes in tech rules in the wake of the Chevron ruling “wishful thinking.”

“It’s pretty difficult to get Congress to act,” Augustino said. “The idea that these intractable issues are going to be resolved in legislation seems like a pretty heavy lift.”

Tony Romm, Gerrit De Vynck, Cat Zakrzewski and Lisa Bonos contributed to this report.