The tech sector was both the beneficiary of immense public investments and the target of significant regulation from public policy makers in the past year.  This dynamic is expected to continue with the new Congress and the Administration.

In August, Congress enacted the bipartisan $280B CHIPS and Science Act to boost public and private sector investments in critical and emerging technologies.  The law included $50 billion for the CHIPS for America Fund, as well as a 25% tax credit for U.S. chip manufacturing.  The Commerce Department is expected to begin considering grant applications as soon as February and awarding funds next year.  The law also authorized, but did not fund, a host of new programs to spur research and development across the tech sector and to create a new technology directorate at the National Science Foundation.

Despite this major bipartisan law to support the tech industry, policymakers also supported significant new bills and regulations to rein in the sector.  Most prominently, Democrats and Republicans teamed up to sponsor a host of antitrust bills and hauled in top tech executives to testify and defend their practices. 

We expect a similar “hot-and-cold” dynamic in the new Congress with a mix of public support and scrutiny.  In line with its public support under the CHIPS and Science Act this year, Congress is expected to increase funding for the National Science Foundation to jumpstart a new era of invention and global technology leadership.  At the same time, the Republican majority in the House is likely to pursue an array of bills that challenge tech companies.  The focus is expected to shift from antitrust law toward content moderation and economic decoupling from China that are of particular interest to Republicans.

National security and global economic competition, as well as partisan politics, are driving the focus on China-related investments.  The House Republicans issued a “Commitment to America” agenda signaling their intent to focus on the national security and economic threats posed by China.  Members of Congress have proposed numerous provisions to decouple the U.S. economy from China, including supply chain resiliency measures, enhanced trade controls, and potentially a new outbound investment regime to protect national security.  Both parties include China hawks and internationalists, but the Republican Party has more members who will press vigorously for economic decoupling.

The perceived national security and economic threats are placing both Congress and President Biden under increased pressure to take action, and those actions are already beginning to take form.  In October, the Administration released its most significant expansion of trade controls to date.  The new rules target China’s acquisition of semiconductor equipment, advanced computing, and supercomputer technologies.  We may also see additional Chinese companies added to the Entity List, the trade restriction list published by the Department of Commerce. 

Congress and the Administration are also considering creating a new regime to review outbound investments by U.S. companies.  A bipartisan, bicameral group of Members of Congress tried to pass outbound investment legislation this past year and will likely try again in the new Congress.  Meanwhile, the Biden Administration is drafting an executive order on outbound investment. Currently, the Committee on Foreign Investment in the United States (known as “CFIUS”) reviews inbound investments to evaluate whether the transactions present any risk to U.S. national security.  Policymakers are concerned about the transfer of technology to China that will enable them to develop their own advanced technologies that may support Chinese strategic and military objectives.  An outbound investment regime would be aimed at limiting this transfer.

On the domestic front, a modest package of antitrust bills passed the House in September 2022 and could become law in the remaining weeks of this Congress.  In contrast, we expect the fervor to pass broad new antitrust legislation to die down in Congress, but the Federal Trade Commission and the Department of Justice Antitrust Division will heighten enforcement against tech companies and potentially promulgate new regulations to rein in tech.  Earlier this month, the Commission released a policy statement restoring rigorous enforcement of the federal ban on unfair methods of competition under Section 5 of the Federal Trade Commission Act.

The focus may instead turn to content moderation.  Republicans think platform companies are biased against content from conservatives and will attempt to repeal Section 230 of the Communications Decency Act, which shields tech platforms from liability.  Democrats are focused on curtailing online misinformation and hate speech.  But both parties could rally around legislation to protect children online.

As Congress considers these changes, the Supreme Court will hear a case, Gonzalez v. Google LLC, No. 21-1333, on whether Section 230 immunizes platform companies from liability when they recommend information provided by another content provider, or only when they decide whether to display or remove content.  The Supreme Court may also consider in Moody v. NetChoice, LLC, No. 22-277 (petition for certiorari pending), the question of whether a state law that prohibits social media companies from moderating content by political candidates violates the First Amendment. 

In contrast to Europe, the United States has struggled to pass comprehensive privacy legislation.  With advances in IoT, AI, and connected and automated vehicles, privacy legislation is even more important but will face an uphill climb to pass.  We also expect patent legislation on a host of issues, including subject matter patentability and reforming the Patent and Trial Appeals Board, but entrenched bipartisan disagreements make substantial new laws less likely.

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Photo of Holly Fechner Holly Fechner

Holly Fechner advises clients on complex public policy matters that combine legal and political opportunities and risks. She leads teams that represent companies, entities, and organizations in significant policy and regulatory matters before Congress and the Executive Branch.

She is a co-chair of…

Holly Fechner advises clients on complex public policy matters that combine legal and political opportunities and risks. She leads teams that represent companies, entities, and organizations in significant policy and regulatory matters before Congress and the Executive Branch.

She is a co-chair of the Covington’s Technology Industry Group and a member of the Covington Political Action Committee board of directors.

Holly works with clients to:

  • Develop compelling public policy strategies
  • Research law and draft legislation and policy
  • Draft testimony, comments, fact sheets, letters and other documents
  • Advocate before Congress and the Executive Branch
  • Form and manage coalitions
  • Develop communications strategies

She is the Executive Director of Invent Together and a visiting lecturer at the Harvard Kennedy School of Government. She serves on the board of directors of the American Constitution Society.

Holly served as Policy Director for Senator Edward M. Kennedy (D-MA) and Chief Labor and Pensions Counsel for the Senate Health, Education, Labor & Pensions Committee.

She received The American Lawyer, “Dealmaker of the Year” award. in 2019. The Hill named her a “Top Lobbyist” from 2013 to the present, and she has been ranked by Chambers USA – America’s Leading Business Lawyers from 2012 to the present.