It’s the final issue of the year for Data Sheet, which normally means it’s time to make a list of half-baked tech predictions for 2023.
But let’s be honest: Who the heck knows what will happen in the next 12 months. We’re entering a period of great economic uncertainty, with economists and money managers sharply divided over the odds of a recession. The geopolitical landscape remains rocky at best, as Russia slogs through a nearly year-long invasion and China grapples with a suddenly emboldened Western world. And for all of the excitement about the metaverse, A.I., and Web3, those technologies still feel years away from becoming an indispensable part of consumers’ everyday life.
Plus, I thought this time last year that low-Earth orbit satellites and social media mogul Donald Trump would be major storylines of 2022. Whoops.
With all that said, I’ll send you into the new year with one not-all-that-bold prophecy: Washington will be the epicenter of Big Tech in 2023.
While the Federal City routinely occupies a sizable role in the tech ecosystem, the upcoming year is set up for a particularly frenetic period, with all three branches of government flexing their authority over the industry.
President Joe Biden's administration stands poised to build on its flurry of tech-centric activity to close the year, including aggressive semiconductor export controls targeting China and the move to stop Microsoft’s $68.7 billion acquisition of Activision Blizzard.
While it remains to be seen whether the White House’s campaign of economic nationalism extends much beyond chip restrictions and domestic manufacturing subsidies, China’s flaccid response (so far…) to the president’s hostile moves should only embolden Biden. An early sign of his tolerance for combativeness could arrive early in the year, when data privacy negotiations between the federal bureaucracy and TikTok’s Chinese parent, ByteDance, are expected to crescendo.
A few blocks down Pennsylvania Avenue, the Federal Trade Commission and its leader, Big Tech foil Lina Khan, are officially rocking and rolling after securing a Democratic majority midway through 2022. The agency signaled this year that the era of unfettered mergers and acquisitions is over, suing to halt Meta’s modest purchase of a virtual reality developer and Microsoft’s blockbuster deal for the video game outfit.
The courts ultimately could stymie Khan’s crusade, but her commitment to “bringing the hard cases” doesn’t figure to waver in 2023 (and don’t forget that the agency’s ongoing effort to break up Meta, which could go to trial as early as late next year). Even if the judiciary deals setbacks on the antitrust front, the FTC could still flex its muscles on the data privacy enforcement and online safety fronts.
Up on Capitol Hill, it’s been a while since the tech industry has had so few friends to lean on.
Democrats remain a thorn in Silicon Valley’s side, pushing legislation designed to foster more competition and generally reduce the power of Big Tech titans. What’s new in 2023, however, is the amount of animus emanating from the GOP, which is making hay on claims (some fair, some overblown) that the industry’s left-leaning workforce is pushing a liberal agenda through platform censorship.
Tech executives will certainly find themselves deep in the political muck next year. Look no further than this week’s letter to five tech giants from the House Judiciary Committee’s projected incoming leader, Republican Jim Jordan, who demanded documents detailing their “collusion with the Biden administration.”
The question, however, is whether Congress defaults to its tried-and-true passion for political mudslinging or actually passes legislation that hurts Big Tech’s bottom line. Major tech companies staved off legislative intrusion in 2022 (Apple and Google owe Chuck Schumer a nice holiday gift basket), but they might not be so lucky next year.
Finally, across the street from the Capitol, the Supreme Court will play an unusually large part in tech’s story of 2023.
The nine justices are scheduled sometime next year to decide on a case testing the limits of Section 230, a foundational law of the modern-day internet that shields tech companies from liability when users post harmful content. The justices could waive the challenge or issue a narrow ruling that causes relatively little consternation, but a sweeping judgment against the industry could fundamentally alter the digital ecosystem.
Things could get even spicier in the Marble Palace if the justices decide to mediate a dispute between two federal appellate courts over the legality of two state laws that limit tech platforms’ ability to moderate content. While the justices haven’t moved yet on the matter, Justice Samuel Alito wrote in a procedural ruling this year that the issue “will plainly merit this court’s review.”
Piece it all together, and you’ve got a doozy of a year ahead in the District.
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Jacob Carpenter
