Conservative, Libertarian Tech Experts Oppose Klobuchar’s Data Tax Idea

A proposal from Sen. Amy Klobuchar, D-Minn., to tax the tech industry on data collection is a political move that’s not realistically enforceable, said politically conservative and libertarian tech observers Tuesday. During an American Action Forum event, R Street Institute Fellow Caleb Watney called it an effort to seize political momentum, rather than an attempt to solve real issues.

Placing value on data and taxing it isn’t “realistic,” said Committee for Justice Public Policy Director Ashley Baker. American Action Forum Technology and Innovation Policy Director Will Rinehart called it an “interesting idea,” but said it’s flawed in ways similar to labeling data as property.

The concern is that “a good chunk of people” cares more about punishing big tech companies than finding solutions, said Charles Koch Institute Technology and Innovation Fellow Neil Chilson on a separate panel. The vast majority of consumers don’t care about privacy, save for worries about government surveillance and day-to-day human interaction, said Niskanen Center Fellow Ryan Hagemann.

Different consumers draw different lines for what they perceive as “creepiness,” said George Mason University Research Fellow Jennifer Huddleston. Regulating creepiness, instead of actual consumer harm, will have significant trade-offs for tech innovation, she said. The key is to inform users so they can make their own privacy adjustments based on their beliefs, she argued.

Panelists discussed challenges of the EU’s general data protection regulation and California’s data privacy law. The GDPR is a “magnified version” of the FTC’s best practices in the U.S., Chilson said. Those best practices include notice and consent and reasonable security, he said. The FTC brings action only when there’s evident consumer harm, he said, calling the agency the most active privacy enforcer in the world.

Expect legal challenges for California’s law, said Huddleston, citing First Amendment and Commerce Clause issues. The law’s inclusion of a private right of action, which allows consumers to file civil claims against companies, is the biggest concern, she said, citing the burden on industry. The Health Insurance Portability and Accountability Act, for instance, doesn’t provide a private cause of action.

Chilson criticized the fast pace at which California’s bill was finalized before a referendum vote, saying “everyone knew it was going to have to be fixed.” He called the bill’s goals “admirable” but aired concerns about impacts on small businesses and that it doesn’t apply to nonprofits.

It’s 10 percent likely Congress passes a federal privacy bill soon, Chilson said. Congress can agree on certain types of harm, he said, but he questioned political motives behind the current tech-lash. Baker warned against lumping competition, privacy and content moderation issues together, calling it dangerous. Chilson argued against efforts to solve all issues -- like identity theft, targeted advertisements and political manipulation -- through one privacy bill.