US regulatory action on the tech sector may come too late — or not at all

The writer is director of international policy at Stanford University’s Center for Cyber ​​Policy.

Between the collapse of cryptocurrency exchange FTX, Elon Musk’s teenage romp with Twitter, and the emergence of the disruptive chatbot ChatGPT2022 was a confrontational year for tech companies. He left society reeling. Now, falling stock prices have finally brought a moment of reckoning, bursting the bubble of those who sold an “unregulated” narrative.permissionless innovation and its inexorable success.

While FTX and Twitter must grapple with their own leadership issues, and many will see the advancement of OpenAI as progress rather than a threat, these disparate examples tell a common story: sooner or later, a lack of guardrails does the potential harm. to society. So can we expect decisive regulatory action this year?

Unfortunately, the answer, at least in the US, is “no.” They laugh at Washington lawmakers in Silicon Valley, where companies are confident their lobbying spending of about $100 million over the past two years will continue to prevent proposed laws from hurting their bottom line.

In Congress, hoping to find a majority to rein in cryptocurrency brokers and social media giants, or establish strong AI regulations, seems like an impossible mission. Political divisions are wider than ever and the House of Representatives finds itself in a historic moment of dysfunction after struggling to find the next president. In 2022, initiatives toward greater antitrust regulation, data protection, and even child protection online never managed to get voted on or win a majority. Given the speed of democratic decision-making, the US legal landscape in which the billionaire tech brethren operate is likely to be remarkably similar by the end of 2023.

For Europeans, the answer to regulatory action is “yes, but”. A host of new laws are already in the works that will trim the sails of the Sam Bankman-Frieds and Elon Musks of this world, as well as OpenAI’s Sam Altman. First, the crypto asset markets will be regulated. A new EU law seeks greater transparency regarding risks to consumers, better financial disclosure and monitoring of company reserves and environmental damage. Now we have to wait for the new law to come into force this year.

For platforms like Twitter, business as usual has ended in the EU. The two-pronged legislation, the Digital Services Law and the Digital Markets Law, spells out new responsibilities for companies regarding content moderation and clarifies antitrust rules for gatekeeper companies. That means Musk won’t enjoy unlimited personal power over what content to allow on Twitter. There will also be more transparency in the algorithms. And here’s a date to mark on your calendar: February 17, the deadline for platforms to report the number of their active users.

In addition to these new restrictions, the EU AI Law, due to be finalized this year, will be a world-leading law that takes a risk-based approach. Some very risky applications, such as social credit scoring, will be banned, while the use of AI in chatbots would be identified as low risk. For generative AI (the technology used to power ChatGPT), the question is whether that label does justice to the risks of bias in the underlying data sets that large AI models are trained on. Or would the app be considered risky if it featured the wrong health solutions?

The political agreement within the EU means that important work has already been done. However, the power of the new rules to have an impact on crypto assets, social media platforms and artificial intelligence also depends on their successful application. That is a space to look at with a critical eye.

Once EU rules show their promise in practice, US internet users and lawmakers will be able to watch from across the Atlantic that US tech companies are perfectly capable of complying with laws that ensure a fairer economy. , respect for civil rights and the protection of consumers and investors And you can already see the challenges of unregulated technologies all around us. “No industry did more damage than technology,” investor Roger McNamee said last week.

The past year offered many reminders that the marketing and lobbying narratives of tech companies do not match the level of social value they create. Yes, crypto assets, social media platforms, and AI companies are all different, and companies in those sectors face different challenges. But waiting for the next disaster due to lack of regulation and surveillance would be a mistake. This is to make 2023 a turning point.

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