Chevron’s move threatens Biden’s plans to crack down on Big Tech

That strategy is now in jeopardy after the Supreme Court curbed the agency’s authority in a landmark ruling, overturning decades of legal precedent that gave agencies more leeway to interpret ambiguous federal regulations. The court’s decision Loper Bright Enterprises v. Raimondo Last week, the overturning of a rule known as Chevron deference gave business and industry groups ammunition to thwart the administration’s proposed tougher technology regulations — undermining some of the U.S. government’s most important efforts to rein in the world’s most powerful companies. If they succeed in slowing down regulation, the United States could fall even further behind its counterparts in Europe, which have moved more quickly to establish new rules.

The agencies are advancing a series of proposals to increase oversight of the technology and telecommunications sectors, including restoring Obama-era net neutrality rules, imposing new data privacy rules on companies and requiring gig economy workers to be treated the same as employees.

The full implications of the decision are unclear and likely will not become clear for years, but it is expected to put pressure on Congress to pass legislation on the technology — a prospect many believe is a long way off.

“What has really happened is we have created a huge amount of uncertainty about everything,” said Harold Feld, senior vice president of consumer group Public Knowledge.

In April, the FCC reinstated net neutrality rules that allow for greater oversight Internet service providers (ISPs) like Comcast and AT&T, fulfilling President Biden’s oath of office. But the Supreme Court’s decision in Chevron has already sent telecom lawyers scrambling to determine whether it could reverse the agency’s plans. Others say the impact could be felt even more, involving regulations aimed at preventing “digital discrimination.”

United States Court of Appeals for the 6th Circuit is considering an industry challenge, arguing that the agency’s net neutrality order constitutes overregulation. The same day Loper Light In that decision, the court asked the Ohio Telecom Association, the Texas Cable Association and other parties in the case to file briefs by Monday explaining how the new ruling would affect their cases.

Helgi Walker, a lawyer representing the CTIA wireless association in the case against the FCC, said Loper Bright would be “contextually helpful” in their case. Walker said courts “should be skeptical” of the agency’s authority.

Andrew Schwartzman, senior counsel at the Benton Institute for Broadband and Society, who is working on the case for the FCC, said he plans to argue that Loper Light doesn’t affect the net neutrality issue “much, if at all,” although he acknowledges it has made the situation more difficult. “This decision will undoubtedly make it more difficult for the FCC to defend its decision for years to come,” he said.

The FCC said in a statement that it is reviewing the impact Loper Light on the agency but that it does not believe the decision undermines its net neutrality rules because it “does not rely on Chevron’s deference to authority.” However, the Supreme Court has previously linked the two issues, citing Chevron’s deference in a 2005 case that upheld the FCC’s regulatory authority to provide internet services.

Meanwhile, critics of the FTC are celebrating the Chevron ruling and warning that it gives them a new weapon in the fight against any attempt by the agency — a pillar of the Biden administration — to extend its authority to the technology sector.

“The FTC should think twice before trying to implement comprehensive privacy or AI regulations,” said Daryl Joseffer, general counsel of the Chamber of Commerce’s litigation center, which has filed more than a dozen complaints against the Biden administration’s efforts to regulate big businesses.

The Federal Trade Commission has proposed more detailed rules to combat the use of AI to impersonate others, but has not yet launched a broader campaign to develop regulations governing the use of AI in the economy.

Consumer advocates have expressed concerns that the Supreme Court ruling could put a stop to future AI efforts across the federal government.

Tom Wheeler, who served as FCC chairman under former President Barack Obama, said our “digital reality is now augmented by artificial intelligence,” and yet “it looks like the Supreme Court has simply limited the ability of expert agencies to deal with the effects of this digital revolution.”

The FTC has been separately exploring sweeping new rules to crack down on what it calls “commercial surveillance” — the mass collection and sale of consumers’ personal data that drives vast swaths of the technology sector. The Chevron decision could give business groups like the Chamber of Commerce fresh ammunition. to define any rules that arise from this process.

Ryan Quillian, a former head of the FTC’s technical enforcement division, said the agency’s ability to rule on consumer protection issues such as privacy is generally less questioned, but Chevron could consider areas where it “tries to expand its authority,” such as unfair methods of competition.

“We do not expect the court’s ruling in Chevron to have a significant impact on the agency’s work to protect consumers on issues such as privacy and to safeguard fair and competitive markets, including innovative new products like artificial intelligence,” FTC spokesman Douglas Farrar said.

Joseffer said Chevron’s “fall” also likely will have a “significant impact” on an ongoing lawsuit by the Chamber of Commerce and other business groups seeking to halt Labor Department rules aimed at preventing gig economy companies from treating workers as contractors rather than employees. The department did not respond to a request for comment.

White House spokeswoman Robyn Patterson said the Chevron ruling “does not change the President’s unwavering commitment to protecting Americans from the harms of social media and other emerging technologies” and that it “underscores the importance of the actions President Biden has already taken as well as the urgent need for Congress to pass the legislation.”

Many in the tech industry see the Supreme Court’s decision to overturn Chevron as a positive, according to Jason Mulvihill, founder and president of Capitol Asset Strategies, a policy and regulatory consulting firm. Mulvihill predicted the ruling would make “laws more specific and regulators more humble.”

But Nik Marda, technical lead for AI governance at Mozilla, said agencies have been one of the “bright spots” when it comes to establishing effective safeguards for tech companies as Congress has grappled with enacting technology regulations. Government agencies also have more technical expertise than Congress or the courts, making them better at tracking and understanding changes in technology, he said.

Steven Augustino, a technology regulatory attorney at Nelson Mullins, called the idea that lawmakers might plug more technology regulatory loopholes after the Chevron ruling “wishful thinking.”

“It’s hard enough to get Congress to act,” Augustino said. “The idea that these intractable issues are going to be resolved in legislation seems pretty heavy.”

Tony Romm, Gerrit De Vynck, Cat Zakrzewski and Lisa Bonos contributed to this report.