Silicon Valley does not expect a friendly relationship with Biden – 11/08/2020 – Tec

If Silicon Valley executives expected the next President of the United States, Joe Biden, to foster the kind of friendly relationship they had in the days of Barack Obama, they were quickly disillusioned with the idea on Sunday morning.

Hours after the president-elect spoke, his press officer, Bill Russo, retweeted a photo of comedian and filmmaker Sacha Baron Cohen. The picture shows the outgoing President Donald Trump meeting with Facebook President Mark Zuckerberg and comments: “One is gone, the other is missing.” Russo added his own comment, “Hell, yes.”

It was the clearest sign that Biden’s team didn’t like Zuckerberg and his Silicon Valley colleagues, who grew up among Democrats for the past four years.

Tim Wu, who worked on technology issues in the Obama White House, said: “Since the Obama administration, the way they think about power in the technological world has changed, even among the people in that administration have worked.

“Obama came to power in 2008 when Google was very small in the industry, just like Facebook, and no one knew if they would survive. The facts have changed.”

During the campaign, Biden was particularly irritated about Facebook and questioned the company’s decision not to verify the accuracy of political ads. Some hope that Biden’s general approach to the industry can be shaped by some of the powerful former technology managers around him.

The president-elect hired Jessica Hertz, a former assistant attorney general on Facebook, and Cynthia Hogan, a former Apple vice president of government affairs, to join his transition team. Eric Schmidt, the executive director of Google, was a major fundraiser and is expected to lead a new tech industry task force at the White House.

Kamala Harris, the vice president-elect, has long been endorsed by names like Sheryl Sandberg of Facebook and Marc Benioff of Salesforce. His brother-in-law and former chief of staff, Tony West, is Uber’s legal director.

A senior tech company executive said Biden has “a lot of friends in the industry – it’s a world he’s very comfortable in”.

With the technology industry facing a number of political challenges over the next four years, from attempts to limit corporate legal protections to threats to completely divide them, few expect a return to the Obama’s “golden age” -Government.

“Do we think it will be Barack Obama 2.0? No, not at all,” said a technology manager.

At least, said another executive, the drama should subside after four years of panic with the Trump administration.

“I can’t wait to wake up every morning and don’t have to fight fire because of a presidential tweet,” said an industry manager. “I’m looking forward to the day when our legal protection will not be threatened because Twitter tagged one of its tweets.”

Antitrust law

Biden’s most important decision will be how to approach the problem of competition. In the past, he said that sharing by companies like Facebook is “something we should look at very carefully” without committing to it.

He must decide whether to push for new antitrust laws, as called for in the influential report by David Cicilline, Democratic chairman of the House of Representatives antitrust subcommittee.

Biden is a centrist, and a Democratic adviser to Congress predicted he would try to avoid drama. “He’s not going to say this company should be dismembered, but he will say that there is a need to do an aggressive inspection and possibly some changes in the rules.”

Others believe, however, that Biden, having received informal advice from Sarah Miller, executive director of the American Economic Liberties Project and proponent of major technological breakdowns, may be forced to take a tougher line on the left of his party.

Barry Lynn, director of the Open Markets Institute, a group of thinkers who also called for a break from the great technicians, said, “They have several crises – the last one they want to grapple with [Elizabeth] Warren or [Bernie] Sanders, or 52 State Secretaries of Justice [que estão processando seus próprios casos antitruste de tecnologia]”.

The new president will also appoint new heads of the Justice Department and the Federal Trade Commission, who will in turn decide how investigations will be conducted against Google, Facebook, Amazon and Apple.

These nominations will, however, have to be approved by the Senate, which could make Biden a moderate candidate if Republicans manage to maintain control after the January upper house elections.

Tom Wheeler, chairman of the Federal Communications Commission for Obama, said, “A lot depends on the Senate. When Republicans do what Mitch McConnell does [o líder da maioria republicana no Senado] with Barack Obama and Bloc nomination after nomination, these issues will become a mess. “


Another problem looming over Silicon Valley is the increasingly close relationship between the United States and China.

It is unlikely that Biden would completely reverse course – he attacked Trump during the presidential debates for being too close to Chinese President Xi Jinping and promised to force the country to “follow international rules”.

Even so, people who have been briefed on the President-elect’s thinking say he wants to combine trade, diplomacy, technology, and even issues like climate change with more coherent policies towards China. And that could give a boost to companies like Huawei and the American companies they supply.

“He will likely at least hear the argument that by persecuting Huawei you are harming American companies by encouraging China to develop their own products,” said Paul Triolo, an analyst at Eurasia Group who is in with the Biden transition team Contact is available.


For American companies in general, Biden’s promise to raise corporate taxes by 7 percentage points to 28% is the most immediate threat to their financial results.

However, especially for tech companies, it is their promise to increase the tax on profits companies derive from their overseas intangible assets – called the GILTI tax – that can have the most direct impact.

This tax was targeted on assets such as intellectual property, which technology companies often relocate overseas for tax purposes, and when introduced resulted in billions in additional corporate payments. For example, IBM was billed $ 2 billion in taxes after its implementation in 2018.

Biden’s promise to double its minimum rate to 21% could see businesses face heavy payments again. But that depends on the victory of the Democrats in the Senate. If they lose, many of Biden’s tax plans are likely to fail too.


If they are hit by more taxes, at least the big tech companies are hoping Biden will help them hire foreign workers.

Trump has restricted visa approval in a number of areas, but perhaps the most important for tech companies are the H1-B visas that Silicon Valley depends on to hire engineers, scientists and programmers from overseas.

Biden criticized Trump when the president put new restrictions on those visas despite not fully committed to reversing the changes.

“You will see a 180 degree turn almost overnight,” a Silicon Valley manager predicted. “It’s not about farm workers, it’s about software developers.”

Content regulation

One area that Biden has spoken openly about is Section 230 – the part of American law that prevents social media companies from being sued for content posted by users on their websites.

Trump has already asked the Federal Communications Commission to add new restrictions to the law.

Biden is not a fan either and said last year that “Section 230 should be repealed, it should be repealed immediately”. He added, “For Zuckerberg and other platforms. [Facebook] spreads falsehoods that they know are wrong “.

If Biden decides to curtail Section 230 protection, he will have the support of many Republican Senators, including Josh Hawley and Lindsey Graham, who have proposed their own bills on the matter. However, he may be struggling to get support from McConnell, who has not yet publicly endorsed his colleagues’ efforts.

Translation by Luiz Roberto Mendes Gonçalves

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