As the pandemic has increased our reliance on digital platforms and services, debate around tech regulation has come into the spotlight, from antitrust enforcement to consumer privacy protection to national security concerns.
In this episode, Faryar Shirzad, global head of Goldman Sachs’ Office of Government Affairs, gives an overview of the moving parts of tech policy today – including the latest analysis of the U.S.’s stance toward TikTok – and explains why these issues don’t fall clearly down political party lines.
This is the final episode of a four-part miniseries: Exchanges Deep Dive: The Battle for Our Screens, which brings together experts from across Goldman Sachs to analyze how the pandemic has shifted our lives digitally and forever changed how we rely on technology.
This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
Welcome back to exchanges, deep dive, the battle for our screens on jinx you'd go ahead of cop communication tool, for this is the fourth and final episode alarmed for party dive into the digital shift caused by the pandemic. We talk so far about online ships and entertainment working
social media of the connection and now around it all outward spoiling. The policy side of things are moving parts in pieces from tax regulation in the year twenty twenty and to talk about that were joined by my colleague and friend, Faria shares on who is coloured opponent, sacks office of government, fair smoking, the problem player shaken
he'll be here so fired. You been working and thinking about these issues for a long time. Let's talk about social media,
was the November elections weighing into the outward for regulation on social media companies than what is our conversation. Look like right now and policy circles,
That's interesting, because certain media is actually play a prominent role in the elections, but not necessarily as an election issue, and so is not as though it's an issue on which voters are expressing-
a view and deciding which, where they, both in terms of Democrats and Republicans, but nonetheless, it's a pretty prominent issue in the sense that it plays
to both sides, campaigns, perspectives and narrative regarding how they reach voters and how the public discourse is occurring around the campaign. As I was a general matter, conservatives have a lotta complaints about social media, in particular, arguing that the social media companies are restricting or censoring their views have been some high profile efforts by twit
most, notably to remove some of the present tweets from their platform.
Cause, a lotta concerns on the republican side for them.
Crowds there is a similar, but essentially of opposite concerned- that the social media companies aren't doing enough to send
Their content on their platforms are removed,
information and then related to that has concerns about foreign government meddling in our elections through social media, and so this is a lot, a narrative around social media, those not strictly speaking, an election issue
presented this provision of logic that you are familiar with this section. Two. Thirty of the communications decency, actor, nineteen, ninety six but sounds like an hour came provision of law is really important.
Legal provision put into that legislation that essentially shields social media companies from liabilities for
The content that posted on their sites in the centre was designed to encourage companies to engage in some moderating of content without facing the same type of life.
Dell Alba NEWS publisher, which face, and so both
the president- and Vice President Biden about call for them,
she loved section, two hundred and thirty, but for very different reasons, a cut along the lines that I talked about, and so it's an interesting area of agreement and yet strong disagreement between the two sides on a narrative policy. That's the really interesting, if you're, watching that space closely
So one thing that you see sometimes on both the progressive side, the Democratic Party and also the more conservative side of the Republican Party, is this
a big companies- and there are few companies that are as big as the social media companies today, some of the time,
companies they and they got bigger, pose pandemic. How is that
sort of distaste for concentration and dominant market power playing out
the policy debate, a mean. All sides, as you said, have very different motors, but they both at some level of dislike concentration and there's a lot of anti trust conversations going on in the space,
because he was very much organised around encouraging but development growth of online
platforms. There was a really
for an area of innovation and our economy of the last several decades. But we find ourselves now at a point where, as you said, the tech companies and the online platforms have reached a scale that
probably unimaginable a couple decades ago, as both sides really have looked at this issue in the current dynamic in
Something needs to be done about it. That, again, is like a lot of things in the tax base, where there is general agreement at a very high level, but not a lot of agreement about where we land at the moment. There is a lot of action going on in terms of antitrust enforcement and the attorney general himself through job are the Justice Department have said a very shortly in a matter of weeks. They will announce a case against.
Google, which is currently facing investigations from fifty separate state and other authorities about some of their online practices in terms of their search engine. And what have you done? So that's it really pivotal thing, but I think, as you look a little bit further down the road charging me as we get it too.
Potential Biden presidency, there's a broader look at the size
whether there is either revisions to the Anti trust law. That should be done to bring these companies to scale or whether there should be a new regulatory framework, which is what more progressive Democrats talk about.
Perceived the sector in a more comprehensive way, and that really is playing itself are over time as an immediate priority issue in terms of legislative Ashton's. There's a lot of other things that are on the plate in Washington and will certainly gonna play for a new president. But it's an area that there's gonna be a lot of action. I think, over the medium term for sure that's worth paying close attention to another piece of tat,
and this is more around more infrastructure side of taken unless around the social media companies. But there's some chatter about that. It is national security and there's been this.
Concern really from this administration, but it predates the US administration is talk about that around national scary implications of some of what we see in the tech sector
so I need a lot of the headlines recently about Tik Tok watches the flame
the day, but give us
broader scope around.
Why that concern around national security and how that is playing out the positive side?
is a notice of evolution of what constitutes national security risk over the last several decades. Since you were in government, since I've been was in government. You know there used to be a traditional sense that national security relate
the things where, if a bad foreign actor, could you please but
The thing is to disrupt or otherwise harm our economy and the concept of national security has become much more difficult to pin down. There's a lot of concerns about influence access, the data information and what have you and so that
new paradigm of national security is really playing itself out in some, the headlines were seeing, including two recent executive orders at the present issued targeting by dance and their tik Tok platform in the United States, but
oh tat, sad and other chinese company and our reach out online platform communications century. Faced
messenger combination platform as quite pervasive in China, but also has a bit of a foothold in the? U S market as well.
Those cases, the reasons
present gave in its executive orders, really really
the two access to information, the ability to monitor a people's activities- and these were deemed to be of such a brave national security risk to the interests of the United States that the present proposed that essentially any transactions where these companies would be banned at a certain our way to see what exactly that means in terms of tangible ask specific,
regarding, but the ban should actually look like, but something's coming in his quite gray, based on this new paradigm. We're talking about so
specific issue in the national scary spaces around the potential espionage and sometimes the conversations driven by what's he might competitive concerns like we want. You asked
knowledge to be superior to chinese and other technology, but there's
The dominant conversation for a while now round the petition
on four espionage, the potential for Spain.
By state owned companies in China, where companies that have stayed in force
that concern real or that just a way of really
dressing up what is really competitive concern
is Rihanna in the sentence? The policymakers are quite focused on this issue, Democrat and Republican. This is an area, unlike some of the things we talked about a moment ago, where a Democrats and Republicans not only agree on the headlines, but they agree on a lot of the tactical things that have been done. Your bomb administration talk about this issue.
Towards the end drop administrations taken work.
because some of the things that body
because in Republican talked about about concerns about our nation,
security interests and being able to maintain nor technological innovative edge a really hard to translate into real regulation that there was a period of a lot of
Work behind the curtain occurred in this administration that all the sudden over the last less a year or so
has translated into a number
really important. New regulatory measures being implemented to essentially place greater controls over? U S, technology! In: U S innovation, even when the national security risk isn't really immediately understandable from the outside says, nothing
the thing that somebody could use to harm the United States, its essentially often
control around a technology that policy
think is important for future innovations. I'll give you an example, the true areas of
Fanchon and our export control laws? One believes
emerging technologies and the other released the foundational technologies
These are two new areas where the Commerce Department has been charged with innocent process are trying to impose traditional export control rules in terms of the ability of Americans to export
But it raises really hard questions. What is a foundational technology? What is an emerging technology is our point at which an emerging technologies ceases to be emerging and then is it ok to export weddings?
if he is the risk that were controlling, for these really really hard questions, but the
Could the administration is doing in trying to figure that out is not
something that's causing any kind of partisan divide and Washington, I think, there's a lot of interest on both sides
figure it out and get it right. I think the Bite administration, if there is one will essentially continue the work at the top people will leave them when they take over
arguably one foundational technology is, is hardware in hardware been around for a long time and semi conductors in particular, while they don't get as many headlines as social media companies, they play a really wall in want of industries. What's the policy debate regarding semi
doctors and infrastructure, pipe technology,
but a product for the debate around semi conductors is very much on the idea,
technology is essentially become so integrated in every aspect of our national security apparatus or defence intelligence capabilities. But it's become
integrated and every aspect of our economy and so
ability and at the centre of that, is our semiconductors for that at the computing capability. That allows us to bring technological innovation, to everything, to services, to manufacture goods and everything in between, and so
allow the interesting work. It's happened in the space in terms of these controls relates to the semiconductor area, because it's an error that China has enormous interest in developing parley,
because our manufacturing platform for a lot of electronics, but also because their developing a lot of indigenous capabilities and also as their economy modernizing develops. They need semiconductors for their development, just like every other cause. Me does. But there are a number of measures that their top administration has implemented again
where's drawn by partisan support to MR
The export of U S semi conductors and also even to restrict the export of goods produced on semiconductor manufacturing equipment made in the United States
That sounds like a really are key point. I just made or distinction that I made a really interesting extension
U S, jurisdiction in the export control space is raising all sorts of issues, legal issues, but also geopolitical issues about how much good
How can you ask exercise over things that at one time were american and whether other countries will go along with another? This point: it's a really interesting area that will become a central part of how
has it been restrained but conducts its foreign policy and a potential second termer out by present Biden if he were become present both have to conduct a policy because it will be a big seem in our dialogue with China, but also with Europe, Asia and really other parts of the world as well on
the technological landscape, where they're trying to argue has an advantage, or at least brought her adoption, isn't in the area. Fintech mobile payments, much more common in more advanced in China, mainland China than they are in most of the wax
since at the bare notes, a big field hard to capture and copper sentences. But how
The debate around digital currencies in the wall, central banks playing. I used to be that the debate was around the dollar and dollars nation of the global economy and can remain be our counterparts that. But how does the debate look around emerging currencies and unnatural technology
You ve got a boil down to TAT, which is a gigantic landscape into a single theme.
It has to do with the theme of payments. How do you facilitate better
easier and more secure and cost effective way,
for people to essentially transfer money from one location and another, in particular, transport across borders, because for all the innovation that occurred in every area, including financial services, isn't it
store, merely expensive and cumbersome process for individuals to transfer money from one country to another and is often the people whether this means most caught by this and so lobby. Interesting innovation, if intact, as you mentioned, has been in the payment space in place
like Africa, in China, where mobile phones and mobile platforms have become essentially online? Banks were people who otherwise don't have access to financial services or banking services. All the sudden at their phones have the ability to.
Receiving send money securely, and it's a huge developmental step forward, a really exciting thing in
context. Central banks are now looking at whether they should take their
currency, their own sovereign currency and create digital forms of it. Who essentially help in this process by which people can make payments and are doing this partly for proactive reasons, because they think it's a good public policy thing? For the reasons I talked about
but there are also doing it- probably defensive, because there has been a number of private groups that have come together and created their own alternative forms of digital currency
there's a bit of a push in a poor going on in the central bank community as they do a lot of work individually and through these multilateral standard setting body is to try to figure out what a central bank digital currency should look like how they would work well,
due to the legacy incumbent banking system, whether it could survive the creation of additional currency and can,
police, ultimately illicit activities. If
commence Godigital. All of these topics that I just talked about her enormously interesting. It's not something. It's immediately thing itself on the United States that the Federal Reserve has said and Treasury endorses the idea that we're not quite at
whether you s needs to adopt such an innovation, because banking services are pretty available in the transfer of monies pretty easy within the United States, but for other countries that are really central issue in the play itself out over the next few years and a big problem in a way.
So one theme throughout this conversation is dead
policy issues in the tax base? Don't necessarily fondly along partisan lines, and it's gotta be interesting this time when
Firstly, every issue seems to be completely polarized their technology,
The policy is is listen. Summer is no but of a grey area. So how do you
think, that'll evolve over time and there's their potential for real by partisan action in this space.
I see there is the potential for real bipartisan action, but I think, regardless of who wins the election, there's just give me a lot of other things that will take up the
energy and time of Congress. I think all things being
call. If you didn't have the limits of time legislatively and all the problems that comes with it in terms of getting real legislation through, there would be an interesting balking at section, two, thirty that we talked about, and there would be an interest in looking at the Anti trust framework around. Not just here.
Nobody's, but antitrust generally doesn't
actually the happened just because there are so many more immediate things stemming from the economic crisis, the endemic and so on that it will be the focus of whoever
when's, the next presidency, but so I think that ultimate boils down to something that you and I know from our times and Washington, which is ultimately your people are your policy and I think, wherever gets pointed into some of these key seats in government at the time
department and the Anti trust role at the Federal Trade Commission, the Faroe Communications, Commission, the Commerce Department and its role in administering these export control laws. I talked about the agencies
part of this city.
Processes of the process by which the? U S, government, reviews, foreign investment and all of them- will become quite influential in incrementally, but powerfully changing the landscape. Around tech in ways that would be quite tangible, even of Congress, doesn't have the capability and
face to take up real legislation. The policy landscape was shared by virtue of who occupy
this key seats on the directions that they get from. The president
That's really interesting to keep an eye on
viable to have you back when there is a new administration place, other second Trump administration or by the administration, and we'll talk a little bit about the outlet for policy then. But thanks for joining us today,
and a beer
Concludes this episode. Exchanges. Goldman Sachs thanks for listening
he enjoyed the show in the digital transformation. Many serious. We hope you subscribe unhappily GSM permitting recommit this part,
as was recorded on Friday September eleven in the year two thousand twice. Thank you.
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Transcript generated on 2021-07-02.