US Attorney General's threat to tech industry - our patience is wearing thin

It was a busy day for US Attorney General William Barr yesterday as he mounted two assaults on the tech sector, one that grabbed the headlines and a more dangerous long term one that didn’t get as much mainstream attention.

The first announcement came out of Washington where the Department of Justice (DoJ) confirmed plans for a broad sweep probe into anti-competitive behavior by large technology firms.

No-one was named, but the ‘usual suspects’ will be all-too-aware of who’s in the firing line here. Wall Street also picked up the general vibe and sent shares of the likes of Amazon, Apple and Facebook down as fears grew that the DoJ decision is the next step towards increased regulation in the sector.

The remit of the inquiry is pretty mile-high at present. According to the DoJ:

The Department’s Antitrust Division is reviewing whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.

The Department’s review will consider the widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online.

The Department’s Antitrust Division is conferring with and seeking information from the public, including industry participants who have direct insight into competition in online platforms, as well as others.

Assistant Attorney General Makan Delrahim of the Antitrust Division added:

Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands. The Department’s antitrust review will explore these important issues.

Such a probe is actually a rare cross-the-aisle issue in US politics. Would-be Democrat Presidential Candidate Elizabeth Warren has made taming the likes of Amazon and Facebook a stated goal. She tweeted after the DoJ announcement:

Big tech companies like Amazon, Facebook, and Google wield enormous, monopolistic power. I’ve been saying that we need to #BreakUpBigTech for a long time and I support a legitimate antitrust investigation into these companies.

Encrypted threats

But other comments from Barr are emphatically not cross-party. While the DoJ probe was announced in Washington, the Attorney General was in New York warning tech firms that their time was running out to buckle to the administration’s demands for an end to “dangerous” and “unacceptable” encryption.

Speaking at Fordham University's International Conference on Cyber Security, Barr trotted out a series of anti-encryption claims, insisting that “warrant-proof encryption” is imposing “huge costs on society” and converts the internet into a “law-free zone” that in the real world would have been regarded as abandoned by the police:

The [cost of encryption is] ultimately measured in a mounting number of victims — men, women and children who are the victims of crimes, crimes that could have been prevented if law enforcement had been given lawful access to encrypted evidence….Making our virtual world more secure should not come at the expense of making us more vulnerable in the real world., But unfortunately, this is where we appear to be headed.

He made the (unsubstantiated) claim that the public expects tech firms to support the government line:

The reason we are able, as part of our basic social compact, to guarantee individuals a certain zone of privacy is precisely because the public has reserved the right to access that zone when public safety requires. If the public’s right of access is blocked, then these zones of personal privacy are converted into 'law-free zones' insulated from legitimate scrutiny.

And in an escalation of rhetoric, Barr went on to warn tech firms that the administration’s patience is wearing thin:

The status quo is exceptionally dangerous, unacceptable, and only getting worse. The rest of the world has woken up to this threat. It is time for the United States to stop debating whether to address it and start talking about how to address it… While we remain open to a cooperative approach, the time to achieve that may be limited.

It is prudent to anticipate that a major incident may well occur at any time that will galvanize public opinion on these issues. Whether we end up with legislation or not, the best course for everyone involved is to work soberly and in good faith together to craft appropriate solutions, rather than have outcomes dictated during a crisis.

Barr’s remarks triggered an immediate response from the Senate floor where Democrat Senator Ron Wyden warned that Barr and President Donald Trump did not have the best interests of society in mind and had another agenda:

Many times in the past I have warned that unnecessary government surveillance holds the potential to be abused. But I have never done what I am doing today. Today, I fear — rather, I expect — that if we give this attorney general and this president the unprecedented power to break encryption across the board and burrow into the most intimate details of every American’s life, they will abuse those powers.

I don’t say that lightly. And yet, when I look at the record, the public statements and the behavior of William Barr and Donald Trump, it is clear to me that they cannot be trusted with this kind of power. Their record shows they do not feel constrained by the law. They have not been bound by legal or moral precedents. Trump, by his own words, has no ethical compunctions about using government power against his political enemies. Never before have I been so certain that the administration in power would knowingly abuse the massive power of government surveillance.

As an example, Wyden presented a hypothetical scenario:

Imagine what kind of information they could gather on their political opponents," he said. "Imagine if a member of Congress was secretly gay, and desperate to hide that fact. Or imagine that a member of Congress had cheated on his wife, despite campaigning on family values. Would a man like Donald Trump use that information against them?"

He added:

Barr, in his own words and actions, has demonstrated repeatedly that, when it comes to surveillance, the laws don’t matter, the courts don’t matter and even the Constitution doesn’t matter. The only thing that matters is whatever he and the President feel like doing.

My take

The anti-competitive inquiry is, of course, precisely the sort of thing that Donald Trump gets agitated about when it’s done by the likes of the European Union, but it’s a different matter when it’s being done by the DoJ. That said, there is a strong case for regulators to take a long hard look at the tech sector, so long as such examination isn’t driven by a desire to score some points against some regular targets of Presidential ire.

The encryption threats from Barr are another matter. It’s not just US politicians who issue these ludicrous demands for ‘no more encryption’ of course, but given the scandals of recents years around NSA snooping and the ongoing lack of any permanent and workable solution to address fears around transatlantic data transfers, Barr’s empty rhetoric isn’t going to convince anyone outside the US - or a lot of people inside - that the surveillance culture has gone away. Wyden’s strong response is something we’re going to hear a lot of, especially if this is pitched to the Fox News heartland as a key election issue with tech joining Fake News as the enemy of the state…