Digital Platforms – Wetmachine

As always when I talk politics, I remind folks that this blog is my personal blog, which I had well before I joined my current employer Public Knowledge. I’ve been commenting on Presidential campaigns since well before I joined PK, and I don’t run any of this stuff in front of my employer before I publish it.

Friday March 8, the Presidential campaign of Elizabeth Warren, not to be confused with the actual office of Senator Elizabeth Warren (D-MA), announced Warren’s plan for addressing the tech giants. Warren has been drawing attention to massive concentration in industry generally and tech specifically since well before it was cool, so the fat that she is out of the gate with a major proposal on this early in the 2020 campaign is no surprise. Nor is it a surprise that her proposed plan would end up breaking up, in some significant ways, the largest tech platforms.

What makes Warren’s contribution a potential game changer is that she goes well beyond the standard “break ’em up” rhetoric that has dominated most of the conversation to date. Warrens proposal addresses numerous key weaknesses I have previously pointed out in relying exclusively on antitrust and is the first significant effort to propose a plan for permanent, sustainable sector specific regulation. As my boss at public knowledge Gene Kimmelman has observed here, (and I’ve spent many 10s of thousands of words explaining) antitrust alone won’t handle the problem of digital platforms and how they impact our lives. For that we need sector specific regulation.

Warren is the first major Presidential candidate to advance a real proposal that goes beyond antitrust. As Warren herself observes, this proposal is just a first step to tackle on of the most serious problems that has emerged in the digital platform space, the control that a handful of giant platforms exercises over digital commerce. But Warren’s proposal is already smart in a number of important ways that have the potential to trigger the debate we need to have if we hope to develop smart regulation that will actually work to promote competition and curb consumer abuses.

I break these out below . . . .

This is the fourth blog post in a series on regulating digital platforms. A substantially similar version of this was published by my employer Public Knowledge. You can view the full series here. You can find the previous post in this series on Wetmachine here.

“Customer proprietary network information,” usually abbreviated as “CPNI,” refers to a very specific set of privacy regulations governing telecommunications providers (codified at 47 U.S.C. §222) and enforced by the Federal Communications Commission (FCC). But while CPNI provides some of the strongest consumer privacy protections in federal law, it also does much more than that. CPNI plays an important role in promoting competition for telecommunications services and for services that require access to the underlying telecommunications network — such as alarm services. To be clear, CPNI is neither a replacement for general privacy nor a substitute for competition policy. Rather, these rules prohibit telecommunications providers from taking advantage of their position as a two-sided platform. As explained below, CPNI prevents telecommunications carriers from using data that customers and competitors must disclose to the carrier for the system to work.

All of which brings us to our first concrete regulatory proposal for digital platforms. As I discuss below, the same concerns that prompted the FCC to invent CPNI rules in the 1980s and Congress to expand them in the 1990s apply to digital platforms today. First, because providers of potentially competing services must expose proprietary information to the platform for the service to work, platform operators can use their rivals’ proprietary information to offer competing services. If someone sells novelty toothbrushes through Amazon, Amazon can track if the product is selling well, and use that information to make its own competing toothbrushes.

Second, the platform operator can compromise consumer privacy without access to the content of the communication by harvesting all sorts of information about the communication and the customer generally. For example, If I’m a mobile phone platform or service, I can tell if you are calling your mother every day like a good child should, or if you are letting her sit all alone in the dark, and whether you are having a long conversation or just blowing her off with a 30-second call. Because while I know you are so busy up in college with all your important gaming and fraternity business, would it kill you to call the woman who carried you for nine months and nearly died giving birth to you? And no, a text does not count. What, you can’t actually take the time to call and have a real conversation? I can see by tracking your iPhone that you clearly have time to hang out at your fraternity with your friends and go see Teen Titans Go To The Movies five times this week, but you don’t have time to call your mother?

As you can see, both to protect consumer privacy and to promote competition and protect innovation, we should adopt a version of CPNI for digital platforms. And call your mother more often. I’m just saying.

Once again, before I dig into the substance, I warn readers that I do not intend to address either whether the regulation should apply exclusively to dominant platforms or what federal agency (if any) should enforce these regulations. Instead, in an utterly unheard of approach for Policyland, I want to delve into the substance of why we need real CPNI for digital platforms and what that would look like.

Tag: Digital Platforms

What Makes Elizabeth Warren’s Platform Proposal So Potentially Important.

CPNI Is More Than Just Consumer Privacy — How To Apply It To Digital Platforms.