US midterm elections and its impact on Big Tech
Yesterday was ‘the Tuesday after the first Monday in November’, the day set by the US Federal Government as the official election day, which in this midterm-poll year will determine which party — Republican or Democratic — controls the two main lawmaking bodies in the American legislature — the House of Representatives and the Senate.
With global geopolitical volatility, rising energy prices and soaring inflation, this election will prove to be an important one for the American and global economy.
The mid-term polls of 2022 are also important for the technology sector in the US and around the world. The US is the home of Big Tech companies, and any change in the political situation is bound to have an impact on the way tech companies operate.
Reining in Big Tech and controlling their growing impact on issues like privacy and data protection is something both Republicans and Democrats have spoken about extensively.
Be it antitrust scrutiny or privacy regulations, policies around tech are going to see changes if there is a shift in power.
Currently, both pillars of the US legislature — the House of Representatives and the Senate — are all controlled by the Democrats. All 435 seats of the Congress are up for election; Democrats currently hold a thin majority of 220.
The situation on the Senate floor is not too different, with the Democrats and Republicans having 50 seats each in the 100 seat Senate. Vice President and President of the Senate Kamala Harris, a Democrat, is the one vote that works in favour of Democrats when it comes to breaking the deadlock on closely contested issues.
However, Democratic senators Joe Manchin and Krysten Sinema have often gone against their party and sided with the Republicans, impeding President Joe Biden’s legislative agenda, and making any vote in the Senate a challenge.
Taming the beast
Congress, controlled by the Democrats, has advanced a number of legislations, including a package of bills aimed at regulating the top four tech companies with antitrust measures.
The package of bills was passed by the House Judiciary Committee with bipartisan support, but is yet to see a floor test with the Senate Judiciary Committee, which will decide the fate of these bills.
If the midterm elections end up flipping control of the Senate to Republicans, the bills are likely to slip down the list of priorities for the GOP, which is more focused on lower taxes, banning abortions in as many states as possible, and protecting gun rights, among other things.
In September, Congress also passed a bill raising the filing fee for large mergers and acquisitions with the Department of Justice and Federal Trade Commission, making them more expensive for Big Tech.
The Senate last year saw Democrat Amy Klobuchar and Republican Chuck Grassley sponsoring the American Innovation and Choice Online Act Bill, which aimed at curbing the anticompetitive behaviour of Big Tech companies, including Apple and Google. The Bill, even though bipartisan in nature, may become less of a priority, with Democrats favoring measures to curb inflation over other issues. The midterm polls are bound to impact these regulatory measures.
Bipartisan distrust of China
Giving China a wide berth when it comes to doing business and exchanging technology is one issue that has seen bipartisan support.
China’s role in the American tech sector is a political subject that remains relevant for people on both sides of the aisle.
Republicans had been pressuring the government to strengthen control over semiconductor exports, to tackle the chip shortage. This included GOP leaders asking the government to cut export of technology to China.
The Biden administration, in August, passed the CHIPS and Science Act, which is aimed at boosting the domestic semiconductor industry with fresh funding of $280 billion, in a move to counter China. If the GOP comes to power, it could toughen the stance on China.
House Minority Leader Kevin McCarthy pledged to crack down on China if Republicans win a majority in the House of Representatives. Mccarthy told Fox News that he planned on addressing accusations of IP theft by Chinese companies from US tech companies.
It is, however, not clear if he will become the House Majority Leader or the Speaker of the House as many in the party are unhappy with his leadership.
Big Tech will see more scrutiny
Regardless of the results of the midterm elections, Big Tech can expect to come under more scrutiny.
For instance, social media behemoth Twitter, now under Elon Musk, has over the years become a platform to influence public opinion.
It will be interesting to see how the new Congress plans to tackle misinformation and privacy issues around social media companies.
A day before the elections, Musk Tweeted asking people to vote for Republican candidates: “To independent-minded voters: Shared power curbs the worst excesses of both parties, therefore I recommend voting for a Republican Congress, given that the Presidency is Democratic.”
He followed up with another Tweet saying, “To be clear, my historical party affiliation has been Independent, with an actual voting history of entirely Democrat until this year.”
In the runup to yesterday’s election, pollsters had consistently predicted that the House of Representatives would be flipped to Republican control, with the Senate set for a tight finish.
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