That strategy is now under threat after the Supreme Court limited the agencies’ powers in a landmark decision, overturning a decades-old legal precedent that gave agencies greater latitude to interpret ambiguous federal laws. Loper Bright Enterprises v. Raimondo Last week’s reversal of a principle known as Chevron deference gave business and industry groups ammunition to thwart the administration’s proposed tougher tech regulations, jeopardizing some of the most far-reaching steps the U.S. government has taken to rein in the world’s most powerful companies. If it succeeds in slowing down regulation, the U.S. could fall further behind its European counterparts, which have moved more quickly to establish new rules.
The agencies are advancing a series of proposals aimed at increasing oversight of the tech and telecommunications sectors, including reinstating Obama-era net neutrality regulations, imposing new data privacy regulations on companies and requiring gig economy workers to be treated as employees.
The full impact of the ruling is unclear and will likely be felt for many years, but it is poised to put pressure on Congress to legislate on the technology instead — a prospect many see as distant.
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“What this has really done is created a huge amount of uncertainty about everything,” said Harold Feld, senior vice president of the consumer advocacy group Public Knowledge.
In April, the FCC reinstated net neutrality regulations that allow for greater oversight of Internet service providers (ISPs) like Comcast and AT&T, fulfilling a pledge made by President Biden. But the Supreme Court’s Chevron decision has already prompted telecom lawyers to consider whether it could overturn the agency’s plans. Others say the impact could extend even further, involving rules aimed at preventing “digital discrimination.”
The United States Court of Appeals for the 6th Circuit is considering an industry challenge alleging that the agency’s net neutrality order amounts to regulatory overreach. The same day the Loper Brilliant In its decision, the court asked the Ohio Telecom Association, the Texas Cable Association and other parties in the case to submit briefs by Monday on how the new ruling affects their cases.
Helgi Walker, an attorney representing the wireless association CTIA in the suit against the FCC, said Loper Bright would be “contextually helpful” to their case. Walker added that courts “should look skeptically” at the agency’s authority.
Andrew Schwartzman, a senior adviser at the Benton Institute for Broadband and Society, who is working on the case in support of the FCC, said he plans to argue that Loper Brilliant It doesn’t impact the net neutrality issue “much, if at all,” though he concedes it has made the landscape more difficult. “This decision will undoubtedly make it much more difficult for the FCC to defend its decision in the years to come,” he said.
The FCC said in a statement that it is reviewing the impacts of Loper Brilliant The Supreme Court, however, said the FCC’s decision did not violate its net neutrality rules because it “did not rely on Chevron deference as authority.” But the Supreme Court has linked the two before, citing Chevron deference in a 2005 case that upheld the FCC’s regulatory authority over Internet provision.
Meanwhile, FTC critics are celebrating Chevron’s decision and warning that it gives them a new means to fend off any attempt by the agency — a pillar of the Biden administration’s efforts — to expand its authority over technology.
“The FTC should really think twice before trying to implement comprehensive privacy or AI rules,” said Daryl Joseffer, chief counsel at the Chamber of Commerce’s litigation center, which has filed more than a dozen lawsuits challenging the Biden administration’s attempts to rein in big business.
The FTC has proposed stricter rules to combat the use of AI for identity theft, but has not yet launched a broader push to develop rules governing the use of AI across the economy.
Consumer advocates have expressed concern that the Supreme Court’s decision could hamper future AI projects in the federal government.
Tom Wheeler, who served as FCC chairman under former President Barack Obama, said that our “digital realities are now on steroids with AI,” and yet “it appears that the Supreme Court has simply limited the ability of specialized agencies to manage the impact of this digital revolution.”
The FTC is also considering sweeping new rules to combat what it calls “commercial surveillance” — the mass collection and sale of consumers’ personal data that is the lifeblood of vast swaths of the tech industry. The Chevron decision could give new ammunition to business groups like the Chamber of Commerce to target all the rules that arise from this process.
Ryan Quillian, a former director of the FTC’s technology enforcement division, said the agency’s ability to make rules on consumer protection issues like privacy has generally been less contested, but Chevron could consider areas where it “tries to expand its authority,” such as around unfair competition practices.
“We do not believe the court’s decision in Chevron will have a significant impact on the agency’s efforts to protect consumers on issues such as privacy and to preserve fair and competitive markets, including for innovative new products like AI,” FTC spokesman Douglas Farrar said.
Joseffer said Chevron’s “demise” is also likely to be “materially significant” in an ongoing lawsuit filed by the Chamber of Commerce and other business groups seeking to end a Labor Department rule aimed at preventing gig economy companies from treating workers as contractors rather than employees. The department did not respond to a request for comment.
White House spokeswoman Robyn Patterson said Chevron’s decision “does not change the president’s unwavering commitment to protecting Americans from harms associated with social media and other emerging technologies” and that it “underscores the importance of the actions President Biden has already taken and the urgent need for Congress to pass legislation.”
Many in the tech industry view the Supreme Court’s decision to overturn Chevron’s ruling as a positive step, according to Jason Mulvihill, founder and president of Capitol Asset Strategies, a policy and regulatory consultancy. Mulvihill predicted the decision “will make laws more precise and regulators more humble.”
But Nik Marda, Mozilla’s technical lead for AI governance, said the agencies have been one of the “bright spots” when it comes to putting effective guardrails in place for tech companies as Congress struggles to pass tech regulation. Government agencies also have more technical expertise than Congress or the courts, which allows them to better track and understand technological changes, he said.
Steven Augustino, a technology regulatory attorney at Nelson Mullins, called the idea that lawmakers could close more loopholes in tech rules in the wake of the Chevron decision “wishful thinking.”
“It’s hard enough to convince Congress to take action,” Augustino said. “The idea that these difficult issues will be addressed in legislation seems like a tall order.”
Tony Romm, Gerrit De Vynck, Cat Zakrzewski and Lisa Bonos contributed to this report.
