Skip to main content

In an op-ed published in The New York Times, House Republican Leader Kevin McCarthy (CA-23) warned of the consequences of Big Tech monopolies and their failure to treat consumers’ private data as private. Leader McCarthy also argued that the United States should look to the greatest driver of competition, the free market, for the most compelling responses to these privacy concerns.

Don’t Count on Government to Protect Your Privacy
Leader Kevin McCarthy
The New York Times
July 14, 2019

Imagine that Congress proposed a law that made postage free in the United States. Even in the digital age, this would be quite convenient. The only catch? In exchange for free mail, postmasters would be permitted to open your mail and read our letters and bills. The benefit, postmasters would insist, is they would know when you’re planning a family vacation. And then the post office could send you hotel recommendations or advice for the best restaurants and activities.

Convenient, right?

On second thought, you might rather pay the 55 cents for postage if it meant keeping advertisers from knowing the location and itinerary of your family vacation before you even get on the plane.

We prefer that strangers not read our mail — that’s why we’ve made doing so a federal crime punishable by up to five years in prison. We have blinds because we don’t want outsiders peering into our homes. We have laws to protect our health care records because we definitely don’t need strangers knowing our medical history.

So why should we treat our online identities — and privacy — any differently?

The answer to this question — posed by my friend Tom Siebel, a tech entrepreneur — clearly is that we should not. But if we are to secure our data in an increasingly digital world, should we expect government to singularly and effectively do the job for us? I would argue, no.

Some politicians, primarily those running for president, have called for brute government intervention, including breaking up big companies like Google or Facebook. This clarion call has the benefit of simplicity, but has failed to explain how it will increase security for our data. What does forcing Facebook to sell WhatsApp have to do with Facebook or WhatsApp collecting, exploiting and selling our data?

Others are calling for invasive congressional regulation. But as history tells us, overly broad and indiscriminate regulation often insulates the incumbents and boxes out the upstarts and smaller firms — a consequence we’ve experienced with the Dodd-Frank financial regulations law. Even Facebook’s chief executive, Mark Zuckerberg, acknowledged this possible outcome to Congress a year ago.

Unsurprisingly, these remedies lean on the premise that only government can solve market inefficiencies that lead to irresponsible corporate behavior.

I don’t think we should feel confident that the bureaucratic leviathan has what it takes to develop or enforce nimble responses to rapid change in the technology industry.

Technological advancements can meet Americans’ demands for privacy, and perhaps already are, through cryptonetworks. Cryptonetworks are decentralized platforms governed by the community of users rather than by chief executives or small management teams.

You would access these networks by logging on to a browser similar to what you use today. But the piping undergirding the decentralized networks is powered by blockchain technology capable of delivering stronger data security, portability and privacy for every user.

When you purchase or post something on a blockchain platform, the network will verify your identity using an encrypted key that is permanently and exclusively yours. Each action is recorded on a distributed ledger. This will make fraud nearly impossible.

Under the current internet framework, users’ data is usually controlled by the platform — online consumers leave a trail of data bread crumbs, making us vulnerable to privacy invasions. In a decentralized network, however, our data would be controlled by this blockchain encryption. Users would grant and revoke access to data, no longer entrusting third parties or tech companies with that responsibility.

Furthermore, this technology would increase competition, because blockchain makes it easier for anyone to create an alternative platform for communicating or providing some service. With the open-source nature of blockchain technology, a community of users is free to take what they like from an existing platform to a new one if they feel their privacy has been infringed or trust violated. Accountability is built into the system.

Each new platform is a fresh opportunity for users and creators to interact, shop and communicate without Big Brother or Big Tech tracking every move.

In many respects, it is a throwback to the permission-less innovation that brought us the internet we know today. For the free market, there is no better remedy to monopolistic behavior.

That is not to say that there is zero role for government. The Federal Trade Commission should step in when companies break the law or violate settlements with consumers or the government. Indeed, the F.T.C’.s role is perhaps more important and challenging than ever, because big tech continues to grow bigger.

Congress also has a role. It should develop a clear privacy framework that sets one federal standard for the country and adheres to three simple principles: You should be able to see, control and delete your data. These standards have the advantage of being bipartisan, which in today’s Washington is saying something.

While the obscurity of blockchain might make it seem intimidating, we are seeing leading technology companies and venture capitalists looking to bring it into the mainstream.

As the most technologically advanced country in the world, it is America’s responsibility to give this technology space to run and grow. Companies that have repeatedly broken promises to their users deserve scrutiny. But the federal government must not mistakenly turn scrutiny into suppression.

In the right “light touch” regulatory environment, decentralized networks can provide the transparent, secure platforms that respect an individual’s privacy and dignity.

Kevin McCarthy, a Republican of California, is the House minority leader.