How This Week’s Big Tech Hearing May Affect
Stock Performance This Week and Beyond
By
Dr. Richard Smith
On October 28, 2020, the CEOs of Facebook, Google and Twitter all appeared before the Senate Commerce Committee for a hearing on Section 230 of the Communications Decency Act (CDA). Not many people had high hopes for substantive dialogue from a hearing scheduled a week before the presidential election. Those with low expectations were not disappointed.
Still, what is most striking amidst all the partisan politics, is that there is little disagreement that something needs to be done about the increasingly problematic influence of these internet technology giants on our civic engagement.
The Section 230 of the CDA was passed in 1996. Some have referred to it as the “26 words that founded the Internet.” The 26 words in question are these:
No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.
For those that were paying attention back in 1996, the legislation arose in response to conflicting court rulings against Compuserve and Prodigy with respect to whether or not the companies were liable for content posted by their users. Congress intervened with the bipartisan bill sponsored by then Representatives Chris Cox (R) who went on to chair the SEC and Ron Wyden (D) who went on to become a Senator.
It’s easy to see why advocates of a free and open internet, such as the Electronic Frontier Foundation (EFF), regard CDA 230 as sacrosanct legislation. Were it not for the protections enshrined in CDA 230 we would not have companies like Facebook, Google and Twitter today. Here’s how the EFF puts it in their own words:
This legal and policy framework has allowed for YouTube and Vimeo users to upload their own videos, Amazon and Yelp to offer countless user reviews, craigslist to host classified ads, and Facebook and Twitter to offer social networking to hundreds of millions of Internet users.
But today the Internet is increasingly taking over the role that television has played in society. Few people would argue that the broad protections of CDA 230 should apply to broadcast television networks and yet many people today, including young children, are replacing broadcast television with the likes of YouTube, Facebook.
Even the democratic co-author of CDA 230, now Senator Ron Wyden, has expressed serious concerns about the liberties being taken by todays internet technology companies. Back in 2018 (in a less politically contentious time) Senator Wyden had this to say in a TechCrunch article entitled “The Consequences of Indecency”:
I never expected that internet CEOs would fail to understand one simple principle: that an individual endorsing (or denying) the extermination of millions of people or attacking the victims of horrific crimes or the parents of murdered children, is far more indecent than an individual posting pornography.
If you want to be the CEO of an internet titan where schools communicate with students, artists with their fans or elected officials with their constituents, you need to limit content like pornography — and they all do. But for some reason, these CEOs think it’s entirely appropriate to allow these other forms of indecency to live on their platforms. Their ineptitude is threatening the very legal foundation of social media.
In spite of the fact that the Senators on the Commerce Committee were able to accomplish little other than grandstanding this past week, the future of CDA 230 in the age of YouTube, Facebook and Twitter is a serious question we all need to reflect on – especially in the midst of an election. No one has said it better than Roger McNamee, one of Zuckerberg’s early mentors and champions, in his must-read book “Zucked: Waking Up from the Facebook Catastrophe”:
Beginning with television, technology has changed the way we engage with society, substituting passive consumption of content and ideas for civic engagement, digital communication for conversation. Subtly and persistently, it has contributed to our conversion from citizens to consumers. Being a citizen is an active state; being a consumer is passive. A transformation that crept along for fifty years accelerated dramatically with the introduction of internet platforms. We were prepared to enjoy the benefits but unprepared for the dark side.
Let’s hope that once the election is behind us, our Senators themselves can actually engage in some civic engagement and real conversation. In the meantime, we don’t need to wait for them. We can step away from the screens and discuss it over the dinner table tonight.
Dr. Richard Smith – Berkeley Mathematician and PhD in System Science – is a fintech entrepreneur and the CEO of The Foundation of the Study of Cycles. Dr. Smith has built a reputation as “The Doctor of Uncertainty” amongst his academic peers and has helped government agencies and Fortune 500 companies (including Pfizer and Johnson & Johnson) alike make sense of complex sets of data. With his background in mathematical theories of uncertainty combined with his investing and trading experience, Dr. Smith is an expert in risk management with critical insights that can help empower investors of all levels.
