: What a Republican-controlled House might mean for tech: Plenty of hand-wringing over Section 230 liability shield

The Biden administration thinks otherwise, whatever the result of the midterm elections. On Wednesday, White House deputy press secretary Emilie Simons insisted there is “bipartisan support for tech antitrust bills, and no reason why Congress can’t act before the end of year.”

However, her prognostication requires a reality check, industry experts say, after promises of imminent full votes on tech legislation for more than a year with few results.

Capital Alpha analyst Robert Kaminsky predicts Republicans will focus on censorship and political speech issues, which will “create an equal and opposite reaction by Democrats who want to fight what they call misinformation online,” he told MarketWatch.

“This will result in no new law passing,” said Kaminsky, who has correctly forecast no significant tech regulation the past few years of Democratic rule because the bills were broadly written and weren’t a legislative priority.“There will still be some Republican interest in antitrust legislation, but we do not see it having support from party leadership.”

Simple math and general sentiment toward tech legislation all but rule out any action during the lame duck period for Congress this year, Kaminsky says. Congress has less than 25 legislative days to work on omnibus appropriations, the NDAA (defense authorization), health and, perhaps, tax extenders, as well as judge confirmations, he said. 

Congress may also lose its appetite for enforcing at a time when Big Tech is either slashing jobs (Facebook parent company Meta Platforms Inc.
META,
+1.65%,
Snap Inc.
SNAP,
-0.60%
and Microsoft Corp.
MSFT,
-1.69%
), imposing job freezes (Apple Inc.
AAPL,
-0.80%
and Amazon.com Inc.
AMZN,
-1.80%
) or cutting back on expenses (Alphabet Inc.’s
GOOGL,
-0.73%
GOOG,
-0.73%
Google).

A daunting 65% of aides don’t think the legislation will pass this year, with a scant 12% of Senate staffers optimistic, according to a Punchbowl poll.

Republican Rep. Kevin McCarthy of California, who is eyeing the House speaker’s gavel, has laid a narrow tech agenda: “Greater privacy and data security protections, equip parents with more tools to keep their kids safe online, and stop companies from putting politics ahead of people.”

Front and center is repealing Section 230 of the Communications Decency Act, which largely shields tech platforms from liability for what users post. Expect tech CEOs to be dragged back to Capitol Hill, where conservatives will grill them on censorship against right-wing views.

For more than two years, Democrats labored mightily with the help of some key Republicans to craft antitrust regulation to rein in Big Tech after years of Capitol Hill hearings with executives from Meta, Google, Apple, Amazon and Twitter Inc.

“There has been a stalemate on tech legislation even with unified Democratic control of government,” Kaminsky told MarketWatch. “In a Republican Congress, we see the shape of the stalemate changing, but do not expect to be any closer to a breakthrough.”

Conversely, there could be a sliver of hope in the Senate, where Democrats hold a 50-49 majority and could pad that lead with the Georgia Senate runoff on Dec. 6. Under a Democratic-controlled Senate, key Democratic-led bills could be reintroduced and passed into law after they were passed over during a hectic legislative agenda lastsession that focused on infrastructure, the American Rescue Plan, climate change, and the CHIPS Act.

“One lesson learned from midterm voters is they want bipartisan compromise, a demonstration that things can be done. Maybe it’s tech,” Ed Mills, an analyst at Raymond James, told MarketWatch.

Sen. Amy Klobuchar, a Minnesota Democrat and lead author of an antitrust bill with Iowa Republican Sen. Chuck Grassley, partnered on the American Innovation and Choice Online Actthat nearly made it to the full Senate floor for a vote this year. The bill would bar tech giants from using their vast market power to preference their own products or services.

If Klobuchar continues as chair of the Senate Judiciary Committee’s antitrust subcommittee, there is “still a chance for her bill,” Mills said, pointing to her interest in the topic (her book on antitrust enforcement was published in 2021) and her president aspirations. “She needs a signature achievement and this works for her brand as Minnesota populist,” Mills said. Grassley is now the top Republican on the judiciary panel.

Mills anticipates an energy permitting bill from Sen. Joe Manchin, a West Virginia Democrat, and a tough bill on China to be given top priority during the next session of Congress next year.