That strategy is now in jeopardy after the Supreme Court in a landmark decision limited agency power, overturning decades of precedent that had given agencies wide leeway in interpreting vague federal laws. Roper Bright Enterprises v. Raimondo Last week's strikedown of a principle known as Chevron deference gave companies and trade groups ammunition to block the administration's proposed tightening of technology regulations, jeopardizing some of the most significant steps the U.S. government has taken to keep an eye on the world's most powerful companies. If successful, the deregulation could put the U.S. further behind European countries, which have been more agile in enacting new rules.
The agencies are pushing a series of proposals to increase oversight of the technology and communications sector, including restoring Obama-era net neutrality rules, imposing new data privacy regulations on companies and requiring them to treat gig economy workers as employees.
The full impact of the decision is unclear and likely will take years to play out, but it is likely to put pressure on Congress to enact legislation on the technology, something many see as a distant prospect.
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“What this has really done is created tremendous uncertainty on all fronts,” said Harold Feld, senior vice president of consumer advocacy group Public Knowledge.
In April, the FCC reinstated net neutrality rules, allowing for stricter oversight. Internet service providers (ISPs) like Comcast and AT&T have made good on President Biden's signature pledge. But the Supreme Court's decision against Chevron has telecom industry lawyers already scrambling to determine whether the court's plan will be overturned. Some say the impact could be even bigger, as it relates to rules aimed at preventing “digital discrimination.”
U.S. Court of Appeals for the 6th Circuit The industry is considering challenging the government's net neutrality order as overreach. Loper Bright Following the ruling, the court asked the Ohio Telecommunications Association, the Texas Cable Association and other parties to the case to submit briefs by Monday on how the new ruling will affect the case.
Helgi Walker, an attorney representing the wireless communications association CTIA in its lawsuit against the FCC, said Loper Bright was “contextually useful” to their case. Walker said the court should “view the FCC's authority with skepticism.”
Andrew Schwarzman, senior counsel at the Benton Broadband and Society Institute, which is working on the case in support of the FCC, said he plans to argue: Loper Bright He acknowledged that while the decision has “little to no” impact on the issue of net neutrality, it does make things more difficult: “This decision will certainly make it more difficult for the FCC to defend its decisions for years to come,” he said.
In a statement, the FCC said: Loper Bright The Supreme Court dissented from the FCC, saying it did not believe the decision undermined net neutrality rules because the FCC “did not rely on deference to Chevron to obtain its authority.” But the Supreme Court has previously linked the two, asserting deference to Chevron in a 2005 case that upheld the FCC's regulatory authority over internet provision.
Meanwhile, critics of the FTC have welcomed the Chevron ruling and warned that it gives the agency new tools to fight off any attempts to expand its authority over technology, a linchpin of the Biden administration's efforts.
“Now is the time for the FTC to think carefully before attempting to implement sweeping privacy and AI rules,” said Darryl Josepher, chief counsel at the Chamber of Commerce Litigation Center, which has filed more than a dozen lawsuits against the Biden administration's attempts to monitor big companies.
The FTC has proposed more limited rules to combat the use of AI for impersonation purposes, but so far it has not launched a broader campaign to develop rules on the use of AI across the economy.
Consumer advocacy groups have expressed concern that the Supreme Court's decision could hinder future AI efforts across the federal government.
“Our digital reality is now augmented by AI,” said Tom Wheeler, who served as FCC chairman under former President Barack Obama, but added that the Supreme Court “appears to have simply limited the ability of our professional agencies to address the impacts of that digital revolution.”
The Chevron decision could give new ammunition to business groups like the Chamber of Commerce, as the FTC separately considers sweeping new rules to crack down on what it calls “commercial surveillance,” the bulk collection and sale of consumer personal data that is the lifeblood of broad swaths of the tech industry. We will target any rules that emerge from that process.
Ryan Killian, a former manager of the FTC's technology enforcement division, said the FTC's ability to make rules on consumer protection issues such as privacy is generally uncontroversial, but that Chevron could have an impact on areas where the FTC is “looking to expand its authority,” such as unfair competitive practices.
“We do not expect the Court's decision in Chevron to have a significant impact on our efforts to protect consumers on issues like privacy, and to safeguard fair and competitive markets, including for innovative new products like AI,” FTC spokesman Douglas Faller said in a statement.
Josepher said the “Chevron collapse” also will likely be “substantially significant” in an ongoing lawsuit brought by the Chamber of Commerce and other business groups seeking to block Department of Labor rules aimed at preventing gig economy companies from treating workers as contractors rather than employees. The Department of Labor did not respond to a request for comment.
White House press secretary Robin Paterson said the Chevron ruling “does not change the President's unwavering commitment to protect the American people from harms related to social media and other emerging technologies,” and added that it “underscores the importance of the steps President Biden has already taken and the urgent need for Congress to pass legislation.”
Many in the tech industry view the Supreme Court's Chevron decision as a positive, according to Jason Mulvihill, founder and president of Capitol Asset Strategies, a policy and regulatory consulting firm that predicts that the ruling will “make the law more specific and regulators more humble.”
But Nick Marda, technical lead for AI governance at Mozilla, said government agencies are one of the “silver linings” when it comes to creating effective guardrails for tech companies as Congress struggles to pass tech regulations. Government agencies have more technical expertise than Congress or the courts and are better able to track and understand changes in technology, he said.
Stephen Augustino, a technology regulation lawyer at Nelson Mullins, called the idea that lawmakers could further fill gaps in tech regulation in the wake of the Chevron decision “wishful thinking.”
“Getting Congress to act is a challenge in itself,” Augustino said. “Solving these intractable problems through legislation seems like a big ask.”
Tony Romm, Gerrit De Vynck, Cat Zakrzewski and Lisa Bonos contributed to this report.
