The free market is the best way to curtail power of technology firms

Mark Zuckerberg of Facebook and Jack Dorsey of Twitter testified before the Senate Judiciary Committee last week about social media bias and the censoring of political content. The event was the most recent government hearing that involved technology executives. It came less than a month after several of them testified before the Senate Commerce Committee about similar issues.

Bipartisan frustration with how social media companies handle political content has led to growing support for eliminating social media companies’ liability protections under Section 230 of the Communications Decency Act. Currently, tech companies are largely exempt from liability for user-generated content. If Section 230 protections are removed, tech companies would be regulated more like traditional media — liable for the content posted on their platforms.

In May, President Trump signed an executive order calling for new regulations that will strip Section 230 protections from social media platforms that engage in political censorship. Sen. Josh Hawley (R-MO) has introduced a similar effort in Congress. Leading Democrats, including President-elect Joe Biden, have also supported repealing Section 230. “Section 230 should be revoked, immediately,” said Biden, because social media companies are “propagating falsehoods they know to be false.

Yet such social media regulation may backfire. By putting social media companies on the hook for the content on their sites, their censorship will increase in an effort to avoid being held liable for it. As Dorsey said during last week’s hearing, getting rid of Section 230 “would have the opposite effect, likely resulting in increased removal of speech, the proliferation of frivolous lawsuits, and severe limitations on our collective ability to address harmful content and protect people online.” Tech companies would also censor more to avoid Democratic threats of even more regulation.

In addition, regulating social media companies as traditional publishers could entrench the social media oligopoly. The regulation would be so costly to comply with that it would prevent new, low-capitalized competitors from entering the market to compete The biggest threat to social media platforms isn’t government regulations. It’s smaller competitors, all of which can capitalize on social media censorship by capturing its disaffected audience. The best way to reduce tech oligarchs’ power and censorship is by supporting competing alternatives, which would likely be nonexistent if Section 230 protections are removed.

Facebook actually supports increased government regulation of the internet, likely because it knows that its first-mover advantage would hurt its competitors (and future potential competitors) more than any consequences it endures. “I believe we need a more active role for governments and regulators,” wrote Zuckerberg in the Washington Post last year.

Facebook benefited from internet regulations in Europe known as the General Data Protection Regulation (GDPR) because smaller companies couldn’t cope with the compliance costs, including onboarding countless new lawyers and coders. After the GDPR was passed, the market share for the existing social media giants immediately increased. No wonder Zuckerberg has crowed that “it would be good for the Internet if more countries adopted regulation such as GDPR as a common framework.”

Republican lawmakers are justifiably annoyed at social media censorship, notably the blocking of the New York Post’s reporting on Hunter Biden. My organization, the Job Creators Network, has also been prevented from promoting political content on social media. But conservatives must be careful that well-intended regulations don’t do more harm than good. We also must avoid making political bedfellows with Democrats whose main goal is not fairness but to stifle speech.

Consider the perspective of Sen. Ed Markey, who at last month’s Senate hearing claimed, “The issue is not that the companies before us today are taking too many posts down. The issue is they are leaving too many dangerous posts up.” Conservative anger at tech companies is understandable. But calls for more regulation are not. Eliminating Section 230 tech protections will have unintended consequences that make tech oligarchs even more powerful and censor-happy. The best way to curtail their power is through the free market.

Alfredo Ortiz is president and chief executive of the Job Creators Network.