The Big Story: President Biden’s new tech priorities, and their impact on startups
President Joe Biden outlined a series of proposed changes to tech policy, including several likely to impact startups. In an op-ed this week, the president highlighted common ground with Republicans about perceived issues wrought by large tech companies, but each of the issues—data privacy, intermediary liability, and competition—also directly impact startups. As the president and Congress chart a path forward, it’s important they recognize how legislative decisions impact smaller businesses and startups when considering tech policy.
Tackling privacy concerns is at the top of President Biden’s tech policy agenda, calling for “clear limits” on how companies collect, use, and share personalized data. Currently, there is no comprehensive federal privacy law to help protect consumers while creating consistent obligations for startups and other companies. Last year, Congress came closer than it ever had to passing a bill but ultimately it failed, leaving the 118th Congress to continue privacy talks. In the interim, individual states have passed their own laws leaving an uneven state-by-state patchwork that startups must expend additional resources to navigate.
President Biden also noted that large tech companies must “take responsibility for the content they spread and the algorithms they use,” calling for a fundamental reform of Section 230. But Section 230 is critical for all Internet companies that encounter content created by individuals—like product reviews, photos, messages, and how-to videos—and especially important for startups. Startups have few resources, especially compared to their larger competitors, and without liability frameworks like Section 230—which holds the creator of the content liable rather than the host—startups would be unable to host user-generated content that could result in damaging lawsuits. Content moderation is already difficult, time-consuming, and expensive, especially for startups. It’s important that policymakers understand how the current intermediary liability frameworks open up avenues for startups to innovate and thrive, and not make changes that could harm their ability to compete.
Biden also outlined policies aimed at promoting competition and a level playing field within the tech sector. Engine has long-highlighted startups as key stakeholders in competition policy and supported policies that enhance startups. Policymakers should continue to ensure startups have the resources they need, the freedom to innovate, and the chance to experience a successful exit.
Policy Roundup:
U.S.-UK tech talks touch on key trade issues for startups. U.S. and UK officials met in Washington this week for the inaugural meeting of the U.S.-UK Comprehensive Dialogue on Technology and Data—a series of ongoing meetings meant to facilitate collaboration on shared tech priorities between the two nations. Officials discussed plans to address key issues impacting startups, like emerging technology regulation, digital infrastructure, and facilitating U.S.-UK data flows.
Biden administration seeks to boost STEM immigration. The Biden administration is seeking paths to increase STEM immigration and fill talent gaps without the assistance of Congress, particularly in response to U.S.-China competition. Without more foreign-born talent to fill worker shortages in STEM fields, the U.S. risks technological growth and its position as a leader in innovation. With Congress repeatedly failing to act on immigration reform—including a permanent solution for DACA recipients who still remain in limbo regarding their future status—immigrant talent and innovators will struggle to lend their skills to the U.S. tech sector, and American innovation will suffer. Immigrants are a crucial part of the innovation ecosystem and are responsible for a large swathe of entrepreneurial endeavors that employ thousands of Americans.
Biden proposes amended repayment plan for student loans. This week, the Biden administration proposed changes to the Revised Pay As You Earn Payment Plan that would lower, and in some cases eliminate, the cost of monthly student loan payments. Under the proposed changes, borrowers making less than around $30,600 per year would pay zero dollars in monthly payments, and for certain higher earners, monthly payments could be significantly lowered. The amended repayment plan comes on the heels of setbacks faced by Biden’s student loan forgiveness plan to wipe up to $20,000 for some borrowers and is now set for arguments before the Supreme Court in February. As Engine has long-stated, student debt affects millions of Americans and can be crippling to innovation, preventing would-be founders—especially founders from underrepresented groups—from pursuing entrepreneurship as a career path.
Patent Office reiterates the promise of Unleashing American Innovators Act. In December, Congress passed a bill aimed at lowering barriers to entry for underrepresented founders interested in seeking high-quality patents. The law will, among other things, enhance the Patent Office’s presence across the country so the government can do a better job of meeting innovators where they are at, build out the agency’s pro bono program, and reduce certain filing fees. In a recent post, Director Kathi Vidal laid out some of the agency’s plans to implement the law and to “help create a more diverse and inclusive patent system.”
Center for American Entrepreneurship and Engine co-host webinar on startup investment and acquisitions. Join the Center for American Entrepreneurship and Engine next Wednesday, January 18th at 2pm E.T. for a virtual discussion with a panel of early-stage startup investors exploring the role of acquisitions in the startup ecosystem and how the ecosystem could be impacted by legislation meant to restrict them. Register for the event here.
Startup Roundup:
#StartupsEverywhere: San Francisco, California. Throughout his time working with environmental, social, and governance data in the finance industry, George Lee knew there had to be a better way to manage and analyze the data than manual entry spreadsheets. Now he’s the Founder & CEO of Hydrus.ai—a startup working to tackle that challenge. We spoke with George to learn more about the Hydrus platform, his experience working with internationally-based employees and clients, and what policymakers should keep front of mind while thinking about developing technologies.
