Sen. Warner on how Congress should deal with crypto crash, Section 230

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Democratic Sen. Mark Warner on how Congress should deal with the crypto crash aftermath and Section 230

Sen. Mark Warner (D-Va.), the tech millionaire who has become one of the loudest voices in Congress calling for stricter regulation of the industry, shows no signs of letting up.

In an appearance Friday at the Consumer Electronics Show in Las Vegas, Warner joined other top Senate Democrats in laying out their priorities for the new Congress — including shoring up the United States’ ability to compete with China and rethinking Section 230 of the Communications Decency Act, which shields online publishers from lawsuits over content posted by their users.

Grid sat down with Warner after the session to dive deeper into his top priorities for the coming year, his thoughts on the crypto implosion and whether the Federal Trade Commission has strayed from its mission.

This interview has been edited for length and clarity.

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Grid: What are some of the highlights of legislation that you want to see passed in the coming year?

Sen. Mark Warner: One, I think we have to revisit a series of laws or guardrails around social media. I think it’s crazy that we don’t have a national privacy law. A lot of that hold-up has been about who gets the right to sue the private right of action versus just a government right of action. I think there’s low-hanging fruit, like data portability and interoperability or dark patterns. It’s not going to fix everything, but there are market-based solutions. Dark patterns [or digital practices designed to deceive consumers] really grease bad behavior — and as an old cellphone guy, number portability was [good for] competition. With data portability, you’d say, “Aren’t you tired of Facebook? Well, you can go someplace else” [with your data]. I’d like to see that.

Something that’s probably harder is Section 230. But Europe is doing some level of content moderation, for example. And I think there is still a really high probability around kid protections. I was with one of the big CEOs of one of the cyber firms, and I thought I was going to get all his ideas on what laws we should do in cybersecurity. And he said, “If you can do one thing, deal with the mental health problems that’s caused to our kids on social media.” So I think the kids protections are certainly a focus.

Then there are some of the self-dealing issues, like the fact that if you’ve got a great pair of eyewear that you’ve worked on for 20 years, and then you put it on Amazon, and the following week, there’s an exact Amazon knockoff of it. On the antitrust stuff, it’ll probably be harder with the House [flipping to Republican control]. And I do think healthcare, cybersecurity people realize, is a big deal, and it’s totally disorganized. So I think something in that space would be good.

Then there’s the competition with China. I think we, [with] both the Huawei issue and the Chips and Science Act, have kind of built the recognition that this is a national security issue. And there’s still bipartisan concern about national security.

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I think we need more investment in synthetic biology or advanced energy. We’ve done some of that in the [Inflation Reduction Act] bill, but some more there, and then there’s artificial intelligence and all these open AI platforms coming out. And then it’s kind of small ball, but doing national security clearance reform [which would allow more private-sector employees to work with the government].

And I think the other two that we kind of touched on at the panel is making sure that the actual implementation of the broadband money and the implementation of the Chips money is done in a smart way. Because history, especially in broadband and the federal government, has been pretty poor.

G: The president of the Consumer Technology Association criticized the direction the FTC is taking in his opening keynote. Do you have a response?

MW: I didn’t hear the speech, but I do think the idea of short-term price to the consumer as the only criteria [to evaluate whether there is harm to a consumer], that needs to be rethought. Because you could have that short-term price, but then if they’ve got monopoly power, they have the ability to then manipulate that price going forward. I was supportive of the Klobuchar-Grassley bill, but I was still looking for ways to see if there was some way to maybe not go as far as that bill — maybe halfway through? And it’s just hard. These are hard, hard issues.

G: What is the best thing for consumers can go in any number of directions. Price being the only metric or standard could be a bit simplistic, but how you quantify what’s “best” in a measurable way is really challenging.

MW: Especially because this is where one of the other bills I have is disclosing what your data is worth. California tried to do that for a while. Because the idea around price, well, you say, “How can it be better than free?” because these services are free, but they’re not free. You should at least know what you’re paying — and you’re paying with your data because it is valuable. There ought to be some pricing so you can be a better-informed consumer. Whether anything else happens in that space? I don’t know, but I’m not surprised that CTA had that position.

G: In the wake of FTX’s collapse and crypto prices being down, what do you think the path is for that industry going forward, if there is one?

MW: I have aggressively said I want to believe in blockchain technology. And as the crypto advocates have come to me and said, “Well, you know, I’m going be able to send my grandmother money on a Sunday in Kenya and not have currency risk” — I mean, I get that. But the actual kind of application, at least from what I see from a regulatory and the intelligence community perspective, that’s not how it’s being used. I don’t want to proverbially throw the baby out with the bathwater, but I think the crypto theory of the case is really under assault.

I think there could be things like distributed ledger technology that could actually work in the banking system. But it’s not really that good for a user on the consumer side. And I know some of this is under debate. And I think I’m right, but the bitcoin blockchain can only do eight transactions a second, so how do you scale that? And obviously, it’s a big energy user. Count me as a skeptic.

What I’ve been trying to think about, I don’t think people have realized that, you know, pre-financial crisis, we all kind of went, “Holy s---, we should have seen this coming.” We had so much unregulated in the housing market, etc. We had all these cross subsidies going on. Well, since then, over the last 15 years or so, 70 percent of the mortgages were not originated from the banking system. There is a lot of activity, and crypto just being one example, of things that have no regulatory framework around it. I don’t want to stifle innovation. But I do think, you know, at least the theory of it as a like-kind service, done in the regulated space, and you’re still providing the same kind of lending — think about all the FinTech companies that have got no framework. I think it may be time to revisit all that.


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G: What are your views on Twitter since Elon Musk took ownership of the company?

MW: If I was a Tesla shareholder, I might not be too happy. But look, I think Elon Musk is brilliant. I was a big supporter of SpaceX and commercial space.

But I am genuinely concerned about Mr. Musk and how obsequious he is to the to the government of China. Look at what he says about the Chinese regulatory system versus what he says about the American Securities and Exchange Commission. Tesla is most of his assets, and he gets all the batteries from China. They make more Teslas, I think, in China now than they do in North America. So I worry not about whether he puts Donald Trump back on Twitter, but whether the Communist Party on China could have undue influence.

Thanks to Lillian Barkley for copy editing this article.

  • Benjamin Powers
    Benjamin Powers

    Technology Reporter

    Benjamin Powers is a technology reporter for Grid where he explores the interconnection of technology and privacy within major stories.