Biden Administration's Final Push on Tech Regulation: AI and Antitrust in Focus

Biden Administration Sprints to Tie Up Tech Loose Ends

Sign up for the On Tech newsletter. Get our best tech reporting from the week. Get it sent to your inbox. After last month's presidential election, Lina Khan, the Democratic chair of the Federal Trade Commission, went into turbo mode. She officially started a sweeping investigation into Microsoft's potential antitrust violations, sending the company hundreds of pages of questions on its businesses. The F.T.C. settled two privacy cases last week with data brokers for selling sensitive user data without permission. Ms. Khan's staff has also rushed to finish an antitrust review of deals between artificial intelligence start-ups and the biggest tech companies, according to three people familiar with the agency's activities, aiming to publish the findings before President-elect Donald J. Trump takes office. Ms. Khan's actions are part of a larger sprint-to-the-finish regulatory blitz as the Biden administration caps an intense four years of scrutiny of the tech industry. Regulators in recent weeks have opened investigations, created rules and pushed some of the toughest stances on antitrust as they seek to curb the power of the biggest tech companies. The Consumer Financial Protection Bureau announced late last month that it would begin to regulate e-payment services by companies like Google and Apple, creating the first regulatory oversight of the apps. The Justice Department asked for a federal judge to break up Google over its monopoly in search. And the Commerce Department is racing to grant more than $80 billion to chip manufacturers and companies bringing broadband to American homes. Regulators say the activity is intended to tie up loose ends on cases the incoming Trump administration may not continue. Last-minute victories would also burnish what they view as a Democratic legacy of putting Silicon Valley on its heels. "Regulators are worried efforts they've made will come to a screeching halt," said Jessica González, co-chief executive of Free Press, a nonpartisan nonprofit media and tech public interest group. Ms. Khan, 35, is the most visible leader of those efforts for the Biden administration. She has become a lightening rod for her novel approach to antitrust law, pushing the agency to police big companies and trying to get ahead of fast-moving changes in the technology industry. Ms. Khan is expected to leave her post as part of the transition to the Trump administration, after which the focus of tech regulation could change. Mr. Trump has sent mixed signals on how he will regulate tech going forward. Some of the current antitrust agenda against the big tech companies originated under Mr. Trump's first administration. Last week, he nominated Gail Slater, a veteran antitrust expert and skeptic of the biggest tech companies, to the top antitrust post at the Department of Justice. He also vowed in a social media post to continue to crack down on tech. But during his campaign, the president-elect expressed skepticism about some of the efforts underway, saying it might not work to break up Amazon and that he would abolish A.I. guardrails. Late Thursday, he named David Sacks, a venture capitalist and a skeptic of A.I. and cryptocurrency regulations, as his "A.I. and Crypto Czar." Also likely to influence Mr. Trump's views on tech policy is Elon Musk, the tech executive who has become close to the president-elect and will be the co-leader of a new Department of Government Efficiency. Mr. Musk, who heads companies including Tesla, X and SpaceX, has called for eliminating regulations and entire agencies. "Strangulation of the nation by overregulation," he posted on X over the weekend. During the Biden administration, the F.T.C. and the Justice Department investigated and sued major tech companies for infractions and abuses and breaking antitrust laws over the way people shop, consume information and communicate online. Ms. Khan was particularly aggressive in testing the bounds of antitrust law, suing to stop mergers and filing lawsuits against Amazon and Meta, accusing them of anticompetitive behavior and stifling rivals. The agency also targeted companies in an effort to protect consumers, including suing TikTok for violating children's privacy, as well as cracking down on those who use artificial intelligence to "supercharge" consumer fraud. She has also called for the regulation of A.I. In addition to appointing Ms. Khan, President Biden issued an executive order that created first-time directives for the federal government's use of A.I. And in 2022 he signed into law the CHIPS Act, which is intended to create new tech manufacturing in the United States -- and granted billions of dollars to manufacturers in recent weeks. Now, regulators are scrambling to cement their progress. At the F.T.C., officials have worked late evenings and weekends on open cases and to settle charges, according to the three people familiar with the agency's activities. Part of Ms. Khan's efforts include officially opening the antitrust investigation into Microsoft's businesses, including cloud computing, A.I. and its Office suite of products. Microsoft declined to comment. The agency is also pushing forward a review of billions of dollars in investments into A.I. start-ups by companies like Google, Amazon and Microsoft -- deals probably designed in part to avoid antitrust scrutiny that comes with buying a start-up outright, according to industry experts. Microsoft has invested more than $13 billion in the start-up OpenAI, becoming its biggest investor. Google and Amazon have invested billions of dollars in the A.I. start-up Anthropic. (The Times sued OpenAI and Microsoft in December 2023 for copyright infringement of news content related to A.I. systems. The companies deny the claims.) The F.T.C. plans to finish the report on A.I. investments and make it public before the inauguration on Jan. 20 in hopes of keeping a spotlight on the deals, the two people familiar with the agency's actions said. The F.T.C. declined to comment. Microsoft also declined to comment. A spokesman for Mr. Trump did not immediately return a request for comment. Some Republicans are skeptical of the F.T.C. efforts. "This is doubling down on an agenda that no one asked for and in cases may be unwound," said Nathan Leamer, a former Republican adviser at the F.C.C. and the chief executive of the tech consulting group Fixed Gear Strategies.

Biden administration sprints to tie up tech loose ends

The Consumer Financial Protection Bureau announced late last month that it would begin to regulate e-payment services by companies like Google and Apple, creating the first regulatory oversight of the apps. The Justice Department asked for a federal judge to break up Google over its monopoly in search. And the Commerce Department is racing to grant more than $80 billion to chip manufacturers and companies bringing broadband to American homes.After last month's presidential election, Lina Khan, the Democratic chair of the Federal Trade Commission, went into turbo mode. She officially started a sweeping investigation into Microsoft's potential antitrust violations, sending the company hundreds of pages of questions on its businesses. The FTC settled two privacy cases last week with data brokers for selling sensitive user data without permission. Khan's staff has also rushed to finish an antitrust review of deals between artificial intelligence startups and the biggest tech companies, according to three people familiar with the agency's activities, aiming to publish the findings before President-elect Donald Trump takes office. Khan's actions are part of a larger sprint-to-the-finish regulatory blitz as the Biden administration caps an intense four years of scrutiny of the tech industry. Regulators in recent weeks have opened investigations, created rules and pushed some of the toughest stances on antitrust as they seek to curb the power of the biggest tech companies. The Consumer Financial Protection Bureau announced late last month that it would begin to regulate e-payment services by companies like Google and Apple, creating the first regulatory oversight of the apps. The Justice Department asked for a federal judge to break up Google over its monopoly in search. And the Commerce Department is racing to grant more than $80 billion to chip manufacturers and companies bringing broadband to American homes. Regulators say the activity is intended to tie up loose ends on cases the incoming Trump administration may not continue. Last-minute victories would also burnish what they view as a Democratic legacy of putting Silicon Valley on its heels. "Regulators are worried efforts they've made will come to a screeching halt," said Jessica González, co-chief executive of Free Press, a nonpartisan nonprofit media and tech public interest group. Khan, 35, is the most visible leader of those efforts for the Biden administration. She has become a lightening rod for her novel approach to antitrust law, pushing the agency to police big companies and trying to get ahead of fast-moving changes in the technology industry. Khan is expected to leave her post as part of the transition to the Trump administration, after which the focus of tech regulation could change. Trump has sent mixed signals on how he will regulate tech going forward. Some of the current antitrust agenda against the big tech companies originated under Trump's first administration. Last week, he nominated Gail Slater, a veteran antitrust expert and skeptic of the biggest tech companies, to the top antitrust post at the Department of Justice. He also vowed in a social media post to continue to crack down on tech. But during his campaign, the president-elect expressed skepticism about some of the efforts underway, saying it might not work to break up Amazon and that he would abolish AI guardrails. Late Thursday, he named David Sacks, a venture capitalist and a skeptic of AI and cryptocurrency regulations, as his "AI and Crypto Czar." Also likely to influence Trump's views on tech policy is Elon Musk, the tech executive who has become close to the president-elect and will be the co-leader of a new Department of Government Efficiency. Musk, who heads companies including Tesla, the social platform X and SpaceX, has called for eliminating regulations and entire agencies. "Strangulation of the nation by overregulation," he posted on X over the weekend. During the Biden administration, the FTC and the Justice Department investigated and sued major tech companies for infractions and abuses and breaking antitrust laws over the way people shop, consume information and communicate online. Khan was particularly aggressive in testing the bounds of antitrust law, suing to stop mergers and filing lawsuits against Amazon and Meta, accusing them of anticompetitive behavior and stifling rivals. The agency also targeted companies in an effort to protect consumers, including suing TikTok for violating children's privacy, as well as cracking down on those who use artificial intelligence to "supercharge" consumer fraud. She has also called for the regulation of AI. In addition to appointing Khan, President Joe Biden issued an executive order that created first-time directives for the federal government's use of AI. And in 2022 he signed into law the CHIPS Act, which is intended to create new tech manufacturing in the United States -- and granted billions of dollars to manufacturers in recent weeks. Now, regulators are scrambling to cement their progress. At the FTC, officials have worked late evenings and weekends on open cases and to settle charges, according to the three people familiar with the agency's activities. Part of Khan's efforts include officially opening the antitrust investigation into Microsoft's businesses, including cloud computing, AI and its Office suite of products. Microsoft declined to comment. The agency is also pushing forward a review of billions of dollars in investments into AI startups by companies like Google, Amazon and Microsoft -- deals probably designed in part to avoid antitrust scrutiny that comes with buying a startup outright, according to industry experts. Microsoft has invested more than $13 billion in the startup OpenAI, becoming its biggest investor. Google and Amazon have invested billions of dollars in the AI startup Anthropic. (The New York Times sued OpenAI and Microsoft in December 2023 for copyright infringement of news content related to AI systems. The companies deny the claims.) The FTC plans to finish the report on AI investments and make it public before the inauguration on Jan. 20 in hopes of keeping a spotlight on the deals, the two people familiar with the agency's actions said. The FTC declined to comment. Microsoft also declined to comment. A spokesperson for Trump did not immediately return a request for comment. Some Republicans are skeptical of the FTC efforts. "This is doubling down on an agenda that no one asked for and in cases may be unwound," said Nathan Leamer, a former Republican adviser at the FCC and the CEO of the tech consulting group Fixed Gear Strategies.