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Op-Ed | The American Prospect | June 14, 2022

Big Tech’s Back Door to Digital Trade Rules

Department of CommerceRevolving DoorTech
Big Tech’s Back Door to Digital Trade Rules

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The Department of Commerce is currently conducting digital trade talks with nations from the Indo-Pacific and Europe, with negotiations led by its secretary, Gina Raimondo. Through her role as lead negotiator in President Biden’s newly established Indo-Pacific Economic Framework (IPEF) and one-year-old U.S.-EU Trade and Technology Council (TTC), Raimondo is poised to influence global trade policies.

Yet instead of representing the American people as a whole, it’s becoming increasingly clear that Raimondo is negotiating on behalf of just one small fraction of it: namely, Big Tech companies. As she pleads the industry’s case on a global stage, the consequences for international digital privacy and data sovereignty are potentially dire.

Last December, Sen. Elizabeth Warren (D-MA) attacked Secretary Raimondo for “lobbying on behalf of Big Tech companies overseas,” and it’s easy to see why. Deemed “tech’s favorite Biden official,” by Axios for defending American tech companies from European regulators, Raimondo’s sympathy with Big Tech’s agenda has become even more obvious in these high-stakes negotiations.

Consider data, part of the lifeblood of international trade and one of the world’s most valuable resources. Even Amazon, recognized by most as an e-commerce company, generates more than half of its profits from its cloud computing branch, Amazon Web Services (AWS). Similarly, Google and Facebook make the vast majority of their money through targeted advertisements based on surveillance dossiers. Big Tech relies on data for profits through a business model that aims to monopolize the collection, control, and transfer of data worldwide.

At the heart of Big Tech’s trade agenda for IPEF and TTC is the demand for free cross-border data flows. To obtain this, the tech lobby recommends banning data localization and watering down data privacy protections. Data localization rules require companies to store and process certain types of data (often personal or financial) where it is extracted, which hurts Big Tech’s bottom line, as massive data centers largely located in the U.S. have lower operational costs. For developing nations, of course, data localization bans will only increase tech monopolies’ ghost-like extractivist model.

Generally, trade partnerships have functioned as Trojan horses to lock in binding international rules for corporate interests. And it is likely to be no different with Biden’s IPEF and TTC, both of which aim to define global digital trade rules. With the help of allied Commerce officials, Big Tech is latching onto the opportunity to get a seat at the negotiating table. In fact, Google, as well as several tech lobbies, urged and celebrated the establishment of the TTC and IPEF.

The privacy aspects of data flows have been particularly fraught ever since leaks revealed the National Security Agency’s PRISM program’s widespread surveillance of EU officials. Big Tech’s major lobbying efforts have derailed initiatives for comprehensive state and federal privacy law in the U.S., but in the EU, privacy is a human right. Europe’s more rigorous General Data Protection Regulation (GDPR) applies to EU personal data even when transferred abroad, which is annoying and expensive for Big Tech. Thanks to these rules, transatlantic personal data flows will require Commerce to negotiate some privacy framework with the EU—but such flows have been in limbo since 2020, when the EU’s Court of Justice struck down the latest watered-down EU-U.S. agreement.

Meanwhile, Raimondo refuses to allay fears of Big Tech’s involvement. Watchdog groups, including the Revolving Door Project, have called on the secretary to share details of closed-door meetings with Big Tech, yet Raimondo continues to rebuff Freedom of Information Act requests to disclose her calendar. What’s more, key members of her office are Big Tech alumni. Her deputy chief of staff, Luis Jimenez, was a Google lobbyist for nearly four years; and her deputy White House liaison, Calynn Jenkins, worked on Amazon’s public-policy team. Without principled public scrutiny, Commerce is in a position to embolden the creeping global power of Big Tech companies abroad, contradicting Biden’s Day One pledge to rein in the power of Silicon Valley.

But the problem goes deeper than Raimondo. According to a 2019 report by the Congressional Research Service, Commerce officials are the most likely Cabinet department staffers to move through the revolving door—an alarming 18 percent of department appointments are registered lobbyists either before or after government service.

That includes Cara Morrow, director of policy at Commerce’s International Trade Administration (ITA), a USTR alum who joined the department after a stint shaping e-commerce policy at Facebook. It also includes industry-friendly privacy expert Christopher Hoff, appointed by President Biden on the first day of his administration as deputy assistant secretary for services to spearhead trade talks on privacy rules and data flows.

Hoff, who worked on the now-overturned tech-friendly privacy framework, led negotiations this year on a third try at a transatlantic privacy agreement, the EU-U.S. Trans-Atlantic Data Privacy Framework (TADPF). At an International Association of Privacy Professionals conference last October, Hoff parroted Big Tech’s trade goals of lax privacy laws and data localization bans. TADPF’s details are still being hashed out, but there is no indication that it will prioritize consumer privacy. And Hoff is pushing the adoption of the United States’ Cross-Border Privacy Rules (CBPR) system worldwide, which predictably relies on industry to self-regulate data privacy through third-party verifications. In April, Raimondo announced plans to make the industry-backed CBPR the global privacy default rather than the EU’s stricter rules.

After championing Big Tech’s favored policies while leading negotiations for IPEF, TTC, and TADPF, Hoff announced this month that he is headed to work at Microsoft as general counsel for privacy and regulation. That’s the company that invaded worker privacy by expanding surveillance tools for managers tracking productivity on Office 360 during the height of the pandemic.

Naturally, this isn’t the first time Hoff has bounced between the private sector and Commerce. Between 2015 and 2018, he worked for law firms Squire Patton Boggs, which lobbied for Amazon during his tenure, and Crowell & Moring, which advised multinational companies on data security and privacy.

Another key trade negotiator, Ted Dean, is back again after a whirl around the private sector. During his first spell at Commerce, Dean dismissed European fears of U.S. surveillance while negotiating a toothless transatlantic privacy agreement, and helped write the pro-tech CBPR. Sticking to the established theme, Dean then joined Dropbox as head of public policy. (NSA whistleblower Edward Snowden described Dropbox as a “wannabe PRISM partner” and “hostile to privacy.”) Dean is now back in government to lead trade talks with Europe in Biden’s Trade and Technology Council.

Completing the roster of corporate-friendly negotiators is Arun Venkataraman, who recently worked as a lobbyist for Visa. In his first go-around at Commerce in the Obama administration, Venkataraman negotiated key limitations on data localization in the now-defunct Trans-Pacific Partnership. This February, while serving as counselor to Raimondo, Venkataraman reiterated Big Tech’s concerns that the EU’s anti-monopoly legislation, the Digital Markets Act, will rein in their growing power in a letter to a top EU official. To Venkataraman, his role in U.S. trade is to combat the challenges of “unjustified limitations on data flows” and “national security-based restrictions on goods, services and technology.” Mark Zuckerberg couldn’t have said it better himself. After his Senate confirmation this April, Venkataraman holds an even more powerful position as assistant secretary of commerce for global markets at the ITA.

Between his government trade positions, Venkataraman spent time at the law firm Steptoe & Johnson advising tech companies on data, intellectual property, and e-commerce trade regulations. That’s the company that prepped Mark Zuckerberg during his congressional hearing on the Cambridge Analytica scandal, in which Facebook inadvertently disclosed the personal information of 87 million users to a London-based firm that used the data in an attempt to sway the 2016 U.S. presidential election.

Across the globe, countries are fighting back against the encroachment and extractivism of U.S. Big Tech companies. In Indonesia and Vietnam, countries slated to become a part of the Indo-Pacific Economic Framework, new data localization requirements are challenging Big Tech’s profitability and giving nations the ability to audit extracted data. In Indonesia, data localization laws have catalyzed investment in local infrastructure, forcing Google, Facebook, Microsoft, and Amazon Web Services to announce plans to build local data centers.

In Europe, courts are cracking down on corporations’ GDPR privacy violations. Big Tech companies have faced countless hefty fines: Amazon ($877 million), Meta’s WhatsApp ($255 million), and Google ($102 million).

But if Raimondo and her coterie of Big Tech cronies win out, the IPEF’s digital trade rules will disregard data sovereignty and ban data localization. Under the guise of the benefits of “free trade,” the Department of Commerce is pushing Big Tech’s exploitative business model abroad.

However, other powerful voices in Washington disagree. Sen. Amy Klobuchar’s (D-MN) Big Tech anti-monopoly legislation, the American Innovation and Choice Online Act, is awaiting a Senate floor vote this summer with an increasingly slim margin to pass. The bill, like Europe’s new Digital Markets Act, is set to ban big e-commerce platforms from preferentially advertising their own products. As a bipartisan coalition eyes breaking up Big Tech’s monopoly power in D.C., just a couple of miles away in Northern Virginia, Big Tech’s data centers are churning a mind-boggling 70 percent of worldwide internet traffic through the region—an illustration of Big Tech’s unfettered global dominance. With Raimondo’s captured agency working overtime to lock in harmful digital trade standards globally, it remains to be seen if nations around the world can fight off Big Tech corruption.

“Gina Raimondo at White House Daily Briefing” by C-SPAN is licensed under CC BY 2.0

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