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State or province. Business phone. American workers are also harmed under the status quo. When dominant firms drive out competitors and achieve market capture, firms become labor monopsonists, 64 meaning that they acquire disproportionate power to set and decrease wages because they face little competition that might otherwise motivate a competitive wage and safe working conditions.

A persistent lack of transparency and data asymmetry exacerbate these problems. While workers or business users may feel that abuse is occurring, it is difficult to investigate problems without greater data access.

Other companies then buy this information from surveillant firms, develop predictive statistical models, and sell those models for wider use. Due to the complex and sometimes deliberately obscured workings of online services, it can be difficult or impossible for individuals to understand, address, or even identify the origin of these harms—let alone choose a better option if one is available. Unwanted and invasive data collection, processing, and sale have become standard practice in online services industries, and Americans are overwhelmingly concerned about the data platforms hold.

For example, Google reportedly has acquired information on 70 percent of all U. It is not just dominant firms engaging in this behavior: In some cases, small businesses and third-party data buyers are the worst abusers of consumer privacy. Indeed, privacy harms are acute in combination with competitive harms. Experts have shown that firms that achieve market dominance and successfully suppress competitive threats are able to lower privacy protections in order to pursue and extract greater data gains from consumers.

The collective costs of individual privacy incursions, of which consumers are often unaware, are staggering. Troublingly, Americans have changed their social and political behavior because they know they are being watched by corporations and law enforcement. Consumer protection issues in online services include but extend beyond traditional privacy concerns: 87 Issues with fraud, scams, manipulation, discrimination, and systemic failures in content promotion and moderation have leveled devastating individual and collective harms.

A scale-at-any-cost growth mindset, 88 overly broad interpretations of intermediary liability laws that cover the sale of physical goods, 89 and other factors have disincentivized the development of more reasonable responsibility for consumer protection.

For years, lawmakers have asked e-commerce sites to stop selling unsafe, banned, fraudulent, or knock-off products and asked other websites to stop advertising them. Due in part to the shift to online services during the pandemic, people are facing growing threats from long-standing consumer protection and cybersecurity issues.

Beyond sensitive financial and identity issues, the unprecedented amount of detailed behavioral data held by online services firms also poses unique consumer protection challenges. Platforms are able to exploit behavioral shortcomings and biases among consumers in real time to a greater degree than previously feasible. Online services have also given abusers and harassers more ways to locate and target victims while regularly failing to provide people with sufficient tools for preventing, curbing, or avoiding those attacks.

More than 1 in 3 35 percent say someone has tried to purposefully embarrass them online, 18 percent have been physically threatened, and 15 percent have been sexually harassed. Because privacy rights are also civil rights, these harms are inextricably linked to the privacy harms described above, wherein mined data feed into algorithms that are used to profile individuals, make decisions, target ads and content, and ultimately lead to discrimination.

Leading scholars and advocates have exposed the numerous risks that automated decision-making systems—encompassing everything from static algorithms to machine learning to AI programs—pose to civil and human rights. Algorithmic decision-making systems have produced and reproduced discrimination in recruiting, employment, finance, credit, housing, K and higher education, policing, probation, and health care, as well as the promotion of services through digital advertising and beyond. Technology-enabled discrimination is especially dangerous because the application of these tools can be hidden and nonconsensual, limited forms of redress exist, and technical processes are often wrongly assumed to be objective, thereby receiving inappropriate deference or insufficient scrutiny.

Facial recognition and other biometric surveillance technologies erode civil liberties, particularly for communities of color. Content moderation challenges and negligence also introduce asymmetric risks to protected classes. Furthermore, major platforms have been found to increase radicalization and participation in extremist groups. Collectively, the sheer quantity and amplification of such civil rights-suppressing content introduces barriers to and discourages full participation in public life and cultural discourse by already excluded groups.

The prevalence of false information and propaganda on social media in particular can grossly warp public discourse and societal understanding of public events. For example, despite the majority of Americans supporting Black Lives Matter, 70 percent of Facebook posts from users discussing the topic in June were critical of the movement. Beyond posing risks to specific enumerated rights and liberties for protected classes, online services have reified, maintained, and extended racism, sexism, and other social prejudices generally in the United States, through both their technology development and business model negligence.

For example, Dr. Across these four overlapping and interconnected areas of harm—economic, privacy, consumer protection, and civil rights—the information asymmetry and power of online services firms threaten to impede understanding and responsible regulatory solutions. Finally, as noted above, the lack of transparency regarding economic activity, data collection, and content moderation makes it difficult to identify or verify suspected harms. Finally, Americans have long recognized the unique political power of media industries and the importance of pluralism and diversity in the press.

Every major emergent communications technology in modern history, from the printing press to television, has engendered new challenges and problems. Recent surveys show that approximately 81 percent of U. Simply put, concentrated power in online services—particularly among social media, search engines, and cloud infrastructure—are cause for democratic concern and action. Existing laws, authorities, and agencies can address a subset of interlocking online services harms outlined above.

In particular, the Center for American Progress strongly supports more aggressive antitrust action, more robust competition policies, increased privacy and civil rights capacity at the FTC, and strong federal privacy legislation or rules. Significant progress is on the table. As outlined below, existing systems of regulatory oversight are primarily reactive: Judicial scrutiny and dedicated, but often narrower, piecemeal legislation have struggled to keep pace with technological and market change.

In a vacuum of regulatory scrutiny, consumer harms have accumulated, predatory practices have become industry standards, and dominant players have entrenched and expanded their holdings.

Labor laws, for example, have lagged behind developments in algorithmic workplace management systems. Effective regulatory oversight must grapple with not only emerging issues but also the regulatory debt that has developed over past decades. Historically, developing remedies has taken years, sometimes more than a decade, to reach resolution after harm has occurred. While it is certainly possible for congressional oversight to dedicate the required expertise to online services regulation—as seen in the historic House antitrust report and resulting bipartisan legislative proposals from the House and Senate in the th Congress—it is impractical for them to do so for dozens of different online services industries presenting novel problems, or old problems in new bottles.

This is particularly true for small and medium-sized players that require regulation but lack the public recognition or political attention merited by digital gatekeepers. Significant federal investment in public interest oversight and administrative bodies is needed to understand and rectify the problems that have proliferated during the past 20 years.

Basic regulatory capacity has not kept pace with the growth of online services. This section surveys current regulatory tools and identifies the outstanding gaps. It presents a mix of current gaps and those that would likely remain if privacy and competition developments are enacted. Economic harms could be partially addressed through existing antitrust laws, including the Sherman Antitrust Act and Clayton Antitrust Act, as enforced by the U.

However, over recent decades, a successful movement to narrow the application of antitrust laws to a limited consumer welfare standard has allowed monopolies to flourish across industries. The anemic antitrust enforcement that has resulted has enabled increased concentration of power in many sectors, including technology and online services markets. Furthermore, limitations exist in addressing market dominance arising from inherent network effects; conventional antitrust does not necessarily forbid monopoly in the absence of exclusionary, improper, or predatory acts.

Where applicable, antitrust tools can be slow: With important exceptions, such as merger reviews, many are limited to after-the-fact intervention. These qualities have hampered antitrust effectiveness in the online services space, where remedies are sometimes pursued too late. Revived enforcement is essential to remedying current problems and promoting competition. Unfortunately, complex court cases have yearslong timelines.

The outcomes of these cases are uncertain—and even more so due to the difficulties in applying a deficient consumer welfare standard to digital markets. The conservative shift in the federal judiciary over past decades and the high bar set by existing antitrust laws and court decisions further complicate enforcement. Even in the event of a successful case, the ensuing appeals process may take years, and selected remedies may fall short of those that would most effectively address anticompetitive effects, such as structural separation, reversal of mergers, or divestiture.

During the years it takes for cases to work through the courts, tech giants will continue to expand, entrench, and potentially abuse their dominance. Monopolists under scrutiny may well outlast any viable competitors and the government administrations that bring suits to challenge them in the first place. Injunctive relief during investigations may help prevent further consolidation but is only a temporary, limited measure.

Some experts have argued that the threat of potential antitrust action makes dominant companies operate more cautiously and accept competitive measures that they would otherwise oppose. However, companies often calculate the bare minimum required to escape with their dominant market share intact; given the scope, scale, and importance of online services to the United States, self-regulation and deterrence are no longer viable strategies. Beyond revived antitrust action, a number of complementary competition policy reforms are needed.

Broadly, however, the FTC is charged with protecting consumers by stopping unfair, deceptive, and fraudulent practices—which includes practices employed by online services providers. State attorneys general also have consumer protection responsibilities, although many states have weak or ineffective unfair and deceptive practices laws.

Scaled-back use of FTC rule-making in recent years has likewise contributed to growing deficiencies in consumer protection online.

Despite its broad consumer protection and competition mandates, the FTC is not a large agency. It fulfills its mission with limited capacity: about 1, full-time employees to cover consumer protection in most sectors. This number has dropped significantly over the past several decades. Enhanced consumer protection regulation and new legislation are required to protect Americans online.

Given the scale and variety of consumer protection harms from online services, existing FTC authorities and capacity are manifestly insufficient. However, as noted below, recent developments are a promising start to restoring and elevating the agency to the capacity and authority needed to fulfill its mission. The United States is unique among its peers in that it still does have a national data privacy law. Consequently, it also lacks a designated data protection agency.

The FTC has done an impressive job of attempting to curb the worst abuses in this space without the benefit of a federal privacy law, civil penalty authority, or anywhere near the dollars or the bodies that other countries devote to data privacy protection.

Absent comprehensive federal protections, states have also increasingly adopted privacy protections through legislation or statewide referendums, starting with California in and and Virginia and Colorado in Thus far, the limited powers of existing regulatory agencies have not sufficiently protected and empowered Americans in the current data environment.

While this strategy has led to a number of enforcement actions over the years, the notice and consent model relies on a number of faulty assumptions, including the notion that the average user can meaningfully consent to privacy policies.

However, as outlined in a recent report by the Electronic Privacy Information Center, the FTC does have unused authorities it could exercise around online privacy. Privacy must also compete with other issues at the FTC, whose limited capacity requires picking and choosing issues within its broad mandate. Complementary to any renewed privacy efforts at the FTC, strong federal privacy legislation is necessary and overdue.

Fundamentally predatory data collection practices must be prohibited. The federal government must establish increased enforcement capacity to guard against the numerous harms of nonconsensual data collection, sale, and discriminatory use. Federal legislation should include robust civil rights protections, strict limits on the use of personal data, limitations on consent-based models, enhanced individual rights and privileges, and action paths to defend new rights for individuals and state governments.

Recognizing a critical need for increased capacity, federal privacy proposals from both Republicans and Democrats include giving the FTC increased rule-making authority over privacy, and Sen. Kirsten Gillibrand D-NY has proposed creating a new data protection agency. House of Representatives also proposed significant investments in the FTC to create a new privacy bureau.

A new privacy law, however, may not be able to address new and creative abusive behaviors that will inevitably arise. Few proposals would holistically grapple with the chilling effects of pervasive, ambient personal and biometric surveillance. The practice of surveillance advertising may be difficult to curb so long as the incentives stay in place and the behavior remains legal.

Finally, privacy is not the sole lens through which to judge the impact of online services; tensions must be dynamically balanced among privacy, security, competition, transparency, and other priorities. Americans across the political spectrum are strongly in favor of robust federal privacy protections, and in order to properly enforce those restrictions, regulatory bodies need additional administrative rules and capacity along those lines. Here, as with competition and antitrust approaches, new statutes, enhanced capacity, and specialist oversight are required to effectively govern online services.

The evolution of online services has outpaced the application and interpretation of civil rights laws to digital properties and transactions. In general, civil rights laws apply broadly, including to online behavior, transactions, and properties; the law, for example, does not distinguish between discrimination in employment advertisements in a newspaper and online.

Yet in practice, the protection of civil rights online has lagged behind emerging and present risks, outpacing the ability of the DOJ, Equal Employment Opportunity Commission, U.

Department of Health and Human Services, U. Department of Agriculture, and other federal and state enforcement bodies and officers to identify and investigate potential violations. Numerous groups, including the Center for American Progress, have called for the creation of an Office of Civil Rights at the FTC to strengthen its ability to prevent discrimination and protect equal opportunity online. However, beyond capacity, some argue that a lack of clear case law or uncertainty around what case law is applicable to novel technologies can impede enforcement efforts.

Where relevant case law does exist, application of the existing doctrine to online services discrimination cases is not always straightforward. Once again, the numerous barriers that exist in algorithmic accountability and transparency have further complicated effective civil rights enforcement.

Consider the application of existing tools to the case of Facebook, Inc. The company recently changed its corporate name to Meta Platforms, Inc. Similarly, outright banning of targeted advertising would leave a significant advantage to Facebook, which is in a prime position to pivot to contextual advertising through its first-party properties. Even in best-case scenarios for critical competition and privacy updates, significant gaps would remain in the U.

To effectively govern online services, U. Proactive rule-making could identify and prohibit harmful measures prior to significant harm or as harms are occurring. But, as noted above, antitrust tools are not necessarily well-matched to the range of noncompetitive harms posed by online services of all sizes. Yearslong timelines and uncertain outcomes further underscore the need for a parallel regulatory process.

Going forward, adding new oversight powers could more quickly surface or address problems that require antitrust action. That is especially true for regulatory models that cannot be effectuated by ex post enforcement actions, even those with the broadest deterrent effect.

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