Tech and Trump: What to Expect From the New Administration (Part 1: FTC, FCC, DOJ)

Last Updated: January 30, 2017.

The meeting between President-Elect Donald Trump and the tech community was as notable for who was there and for who was not. The meeting was attended by:

Team Trump – Family
POTUS-E Donald Trump, Ivanka Trump, Jared Kushner (son-in-law), Eric Trump, Donald Trump, Jr.
Team Trump – Other
VPOTUS-E Mike Pence, Steve Bannon (campaign CEO), Wilbur Ross (Secretary of Commerce nominee) and Reince Preibus (RNC Chairman), Peter Thiel (PayPal founder), Stephen Miller (advisor).
Team Tech (by position at table)
Brad Smith (Microsoft), Jeff Bezos (Amazon), Larry Page (Alphabet), Sheryl Sandberg (Facebook), Tim Cook (Apple), Safra Catz (Oracle), Elon Mosk (Tesla), Gary Cohn (Goldman Sachs), Satya Nadella (Microsoft), Ginni Rommety (IBM), Chuck Robbins (Cisco), Eric Schmidt (Alphabet), Alex Karp (Palantir), Brian Krzanich (Intel)

Not present were Twitter (supposedly because the company rejected and anti-Hillary emoji) and HP (whose Republican CEO openly campaigned for Secretary Clinton).

The presence of Trump’s children and son-in-law Jared Kushner renewed questions about Trump’s potential conflicts of interest.

As the .gif file below illustrates, tech companies were in an awkward situation since they had largely supported Hillary Clinton (for example according to OpenSecrets.org Secretary Clinton out fundraised Trump among tech $55.8M to $1.2M). In addition, 80 Tech CEO’s signed an open letter against “Trump’s divisive candidacy.”

Concurrent with the meeting, a group and engineers and other tech workers issued a statement asserting that they would refuse to participate in the creation of databases that could be used by the government to target people based on their race, religion or national origin. The proclamation immediately drew more than 500 signatories, including employees at Google, Apple and Microsoft. During the campaign, Mr. Trump did not rule out the idea of a database of Muslims.

Tech’s outsider status is evident in the absence of any tech executives among Trump’s key appointees (although former HP CEO Carly Fiorina is under consideration for Direction of National Intelligence).

What can be expected from a Trump Administration? Part 1 of this analysis addresses how a Trump administration may impact policy at the Federal Trade Commission, Federal Communications Commission and Justice Department.

Part 2 addresses the Department of Commerce and miscellaneous policies.

FEDERAL TRADE COMMISSION

Maureen Ohlhausen

A starting point to consider is that Trump has had some run ins with the FTC or state regulator on FTC issues. This includes paying a fine for Hart-Scott-Rodino violations in 1988 and paying a fine to the New York Attorney General for a data breach.

The “landing team” for the agency is led by Alex Pollock of the R Street Institute. R Street is very pro-sharing economy but has said that

As such, we recommend that regulators prioritize modernization and take a light-handed approach that doesn’t stifle new technologies like the “internet of things,” augmented reality, distributed applications and autonomous vehicles. . . . The widescale deployment of these technologies also means cybersecurity is more important than ever before. One important market-oriented approach to this problem that R Street is focusing on in the new year is encouraging a robust market for cyber insurance.

The transition also includes former FTC Commissioner Joshua Wright who has strong ties to Google. Wright had a conservative record on the FTC and stressed the need for empirical evidence of harm and consideration of benefits of new products. Wright is critical of the FTC’s “generalized fear of data.”

President Trump has tapped Republican Commissioner Maureen K. Ohlhausen to serve as acting Chairwoman Ohlhausen, who has been a Commissioner since 2012, has 11 years of experience with the FTC having previously served as Director of the Office of Policy Planning from 2004 to 200 and beginning with the FTC General Counsel’s Office in 1997.

What to Expect

Reduced Antitrust Enforcement
Scaling Back Data-Security Enforcement
More Pro-Data
Focus on empirical harm and not policy making by slogan (e.g., “privacy by design”).
Sharing economy will get more welcoming ear.

FEDERAL COMMUNICATIONS COMMISSION

One of the few Trump pronouncements on tech during the campaign was his opposition to net neutrality and his landing team at the FCC reflects this. The team includes Jeff Eisenach an economist with ties to Verizon and net neutrality opponent; Mark Jamison, former Sprint lobbyist who once called for abolishing FCC and Roslyn Layton, a Tech Policy Daily contributor and opponent of the FTC’s net neutrality and privacy rules.

FCC Chairman Wheeler, who led the net neutrality fight, has indicated he will step down when Trump takes office. The FCC’s two Republican Commissioners have indicated that they do not expect vigorous enforcement of the net neutrality rules and have vowed to revisit the rules “as soon as possible.”

Ajit Pai

Trump has announced he will appoint Republican Commissioner Ajit Pai to be chair of the FCC. Pai’s FCC website articulates his philosophy as:

Consumers benefit most from competition, not preemptive regulation. Free markets have delivered more value to American consumers than highly regulated ones.
As a creature of Congress, the FCC must respect the law as set forth by the legislature.
The FCC is at its best when it proceeds on the basis of consensus; good communications policy knows no partisan affiliation.

Pai has been a Commissioner since 2012 and served as an FCC lawyer from 2007-2011.

What to Expect

Net Neutrality is dead, whether by repeal or by lack of enforcement
FCC Privacy Rules are in jeopardy
Broadband Preemption is dead

Layton has written of the need to challenge the rise of the Chinese App economy. She notes:

China has already surpassed the US to become the world’s largest app market by downloads in 2016, with a projected 50 billion downloads. App revenue for China in 2015 was close to $9 billion. China’s app market growth exceeds that of the US by 15 percent.

JUSTICE DEPARTMENT

AG Nominee Sen. Jeff Session

Trump has named Alabama Senator Jeff Sessions as his Attorney General nominee. Sessions first came into prominence in 1986 when he was nominated to a federal district court judge in Alabama. His nomination was rejected by the Republican Senate Judiciary Committee 10-8 over accusations of racism.

Ironically, Sessions now chairs the Senate Subcommittee that deals with judicial nominations.

Sessions is thought to have had a hand in the Trump Muslim Travel Ban executive order which might complicate his confirmation.

What to Expect

Sessions is one of the leading opponents of expansion of the H-1B Visa program, which may make tech hiring more difficult and cause foreign talent to move to other markets. Even before his confirmation there is draft executive order circulating that would emphasize that

Visa programs for foreign workers … should be administered in a manner that protects the civil rights of American workers and current lawful residents, and that prioritizes the protection of American workers — our forgotten working people — and the jobs they hold.

The executive order is expected to require that companies first attempt to hire Americans and then use H-1B Visas only for highly-paid, highly skilled workers and not as a way to cut costs. It also called for stepped up enforcement by Homeland Security.

Sessions was a vocal critic of Apple in the encryption standoff and has sought to expand warrantless search authority of internet activity. As an opponent of NSA and FISA reforms, a Session-led Justice Department could lead to renewed battles with the EU over privacy.

CC Photo Credit – Jeff Sessions
U.S. Senator Jeff Sessions of Alabama speaking to supporters at an immigration policy speech hosted by Donald Trump at the Phoenix Convention Center in Phoenix, Arizona.
Gage Skidmore.