The Big Story: Key lawmakers propose rolling back crucial Internet framework
The bipartisan leaders of a key congressional committee unveiled a proposal this week that would eliminate a decades-old legal framework that enables Internet platforms of all types and sizes—including startups—to host and moderate user-generated content without fear of ruinous litigation. Claiming to go after “Big Tech,” despite the disproportionate impact it would have on smaller platforms, the proposal from House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-Wash.) and ranking member Frank Pallone (D-N.J.) would sunset Section 230 after 2025.
Section 230 is a critical Internet law that prevents private litigants from suing Internet platforms over the content shared by their users. While it is often discussed in the context of criticizing large social media platforms, Section 230 enables platforms that see all kinds of content—messages, reviews, ecommerce listings, photos, videos, and much more—to host, moderate, amplify, and remove content in the ways that make the most sense for their community of users. Startups already invest proportionately more in the expensive, time consuming, and inherently fraught task of content moderation than larger companies, and they are the least equipped to navigate lawsuits—which can cost companies tens of thousands of dollars under current law—or even threats of lawsuits any time one person dislikes the online content created by another user.
Lawmakers are understandably focused on making the Internet a place where “free expression, prosperity and innovation” can flourish, as McMorris Rodgers and Pallone said in an op-ed announcing the sunset proposal and describing it as a way to “force Big Tech’s hand” to help Congress craft a new legal framework that holds Internet platforms accountable for their users’ content. But Section 230 underpins the ability of all users to share content across the Internet, and a sunset will eliminate the framework for everyone, making it harder for free expression, prosperity, and innovation to flourish online—especially on new platforms created by startups. The proposal will be discussed at a legislative hearing next week, and we encourage lawmakers to consider the consequences it will have for the smallest members of the Internet ecosystem.
Policy Roundup:
Senate AI roadmap emphasizes research investments, boosting innovation. The bipartisan Senate working group on artificial intelligence unveiled their policy roadmap this week, underscoring the chamber’s approach to driving U.S. innovation in AI. The roadmap follows the nine novel AI insight forums held throughout last fall and calls for investments in federal agencies to boost AI research and development, funding to provide AI resources to startups and universities, and the creation of AI-ready data to further innovation. The roadmap places a welcome emphasis on seizing the promise of AI across a wide range of sectors where startups are already making breakthroughs—like agriculture, cybersecurity, employment, healthcare, tourism, and more—and policymakers should act to bring its focus on U.S. leadership in AI to life.
Reform to shortage occupation list needed to bolster STEM talent pool. This week, Engine filed comments urging the Department of Labor (DOL) to recognize skills shortages as they consider updates to the Schedule A occupation list, which could help broaden talent availability for startups. Schedule A lists occupations for which there are not enough U.S. workers, but it has not been updated in decades and does not reflect the current talent needs of the U.S. economy. While updates to the list would not provide for additional green cards or visas, it would streamline the pathway for needed workers and allow companies, including startups, to better address talent gaps, saving money for both employers and taxpayers. Startups often struggle to navigate the immigration system, updates to the Schedule A list are a necessary step to help founders build their teams. Policymakers should continue to consider ways to better enable high-skilled talent and foreign-born founders to strengthen the U.S. startup ecosystem.
Vermont passes data privacy bill, threatening to grow patchwork in new direction.
Last weekend, the Vermont legislature passed a data privacy package that empowers individuals to sue over alleged violations, potentially creating a new wrinkle for startups to navigate as the costly privacy patchwork continues to grow. In addition to the private right of action—which could prompt a “privacy troll problem”—the passed legislation includes data minimization provisions and parts of a childrens’ online content proposal, which are both relatively new developments in state privacy laws. Governor Phil Scott (R) has not said whether he would sign the legislation but has expressed concern about the impact on small businesses. Instead of watching the proliferation of unique state privacy laws, Congress should act to create a uniform national privacy standard that works for both startups and their users.
Report on transatlantic startup ecosystem highlights regulatory headwinds. This week, Danish Entrepreneurs, Engine, and a collection of startup support organizations throughout Europe released the "Transatlantic Insights Report,” shedding light on the barriers encountered by startups in both the EU and U.S. startup ecosystems. Many startups highlighted the burdens presented by the regulatory environment, especially when rules vary across jurisdictions. A webinar next Tuesday will break down the report and what policymakers on both sides of the Atlantic should do to support startups.
Student loan interest rates hit high as administration pursues debt relief. Federal student loan interest rates are set to reach a 12-year high for the upcoming academic year, as college continues to become more unaffordable. Over 40 million Americans hold student debt, but women and people of color are disproportionately impacted. The presence of student debt also serves as a deterrent to entrepreneurship and impacts a founder’s ability to secure financing—which is especially troubling for underrepresented founders, who already struggle to access most forms of capital. While the administration continues to pursue pathways for student loan forgiveness and alternative repayment plans, Congress should ultimately address the crisis so that entrepreneurship is a pathway open to all Americans.
