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Illustration: Rae Cook/Axios

It's easy to dismiss the Big Tech hearings as political spectacles with no concrete results. But even without new laws, company behavior has evolved under the heat of the spotlight.

Why it matters: Regulation takes time, and a lot of hearings, to produce tangible results.

What's happening: One upshot of four years of high-profile hearings is that tech companies now know how to play the game.

  • Google and Facebook opened up more about their algorithms as both Republicans and Democrats demand more transparency into that process, as we saw in a Tuesday hearing.
  • Companies now use hearings to time policy announcements — sometimes aligning with proposed legislation — meant to show they are responsive to lawmaker concerns.
  • They've lawyered up, including retaining outside counsel to deal with Hill staffers.

Between the lines: Sometimes the goal isn't to pass a law. Congress uses the bully pulpit to force companies to self-regulate.

  • "The thing to remember is a huge part of what Congress does didn’t get taught in Schoolhouse Rock," a Democratic staffer told Axios. "That oversight power and exposing public harms has had huge effects in the past on what people do and don’t do."
  • Multiple hearings help to tell a story about what changes need to be made. Lawmakers are now more comfortable legislating in complex areas like Section 230 of the Communications Decency Act, a key tech liability protection that was once thought to be untouchable.
  • "We have built the narrative now that it needs to be reformed," another Democratic aide told Axios. "You’re hard pressed to find people — other than industry stakeholders with a lot to lose — that say otherwise."

Flashback: During the first raft of Big Tech hearings following the 2016 election, the biggest takeaway was how little Congress understood about how tech platforms work and make money.

  • Lawmakers have come a long way since then in their grasp of business models, said Matt Perault, director of the Center on Science & Technology Policy at Duke University and previously the director of public policy at Facebook.
  • "We’ve gone from 'Senator, we run ads' to more nuanced questions about APIs and mergers, and that’s likely the result of extensive research and preparation. That deserves applause."

Yes, but: Except for a small Section 230 carveout passed in 2018, no real action has happened on Capitol Hill, other than reports and proposals. That prompted Sen. Brian Schatz (D-Hawaii) to tell Axios the hearings have become "a waste of time," and that "theater interferes with the policymaking."

  • "Members are getting political upside for proposing things that make no sense or have no chance, by berating an executive," Schatz said. "It’s a ritual that benefits everyone powerful and ignores the consumers and small businesses that are harmed by the lack of privacy protections and Section 230 reforms that would actually make a difference."

The other side: Hearings get tech companies to explain their policies under oath, a Democratic Senate Judiciary aide said.

  • That includes a revelation during a recent subcommittee hearing that someone from Google had called Match the night before the hearing to ask about why their testimony was different from what they had told investors previously, which led to a follow-up letter from lawmakers. (Google denied trying to influence the company's testimony or intimidate.)
  • The trajectory is clear, aides argue: "Although legislation moves slow, it is coming, and expect bipartisan support to curb Big Tech’s anticompetitive behavior," a senior GOP House aide said.
  • House Energy & Commerce Committee ranking member Cathy McMorris Rodgers (R-Wash.) outlined a tech accountability platform earlier this year that was informed by previous hearings, a Republican committee aide told Axios. Chairman Frank Pallone (D-N.J.) is also working on legislation informed by proposals raised at the recent committee hearing, a Democratic aide said.

The big picture: As one Democratic aide told Axios, some hearings elicit more useful information than others. "There's not a need to land every punch; it's about conducting routine oversight."

Go deeper

Aug 2, 2021 - Technology
Column / Tech Agenda

The push for a "PBS for the internet"

Photo illustration: Shoshana Gordon/Axios. Photos: Nathan Congleton/NBC/NBCU Photo Bank via Getty Images

The concept of a new media ecosystem that's non-profit, publicly funded and tech-infused is drawing interest in policy circles as a way to shift the power dynamics in today's information wars.

Why it matters: Revamping the structure and role of public media could be part of the solution to shoring up local media, decentralizing the distribution of quality news, and constraining Big Tech platforms' amplification of harmful or false information.

D.C.-Beijing tensions are shifting markets

Illustration: Aïda Amer/Axios

U.S. markets stand to lose $2 trillion in value if D.C. and Beijing drift further apart.

Why it matters: Political chasms are showing up in new securities regulations that put companies and investors in a bind. The rules are also another reflection of how much relations between the world’s largest economies have cooled, even as they remain economically interdependent. 

3 hours ago - Health
Axios Investigates

Documents reveal the secrecy of America's drug pricing matrix

Illustration: Aïda Amer/Axios

American businesses spend hundreds of billions of dollars a year on prescription drugs, and the bills keep getting bigger. But some of the companies promising to help rein in those costs prevent employers from looking under the hood.

Why it matters: Documents provided to Axios reveal a new layer of secrecy within the maze of American drug pricing — one in which firms that manage drug coverage for hundreds of employers, representing millions of workers, obscure the details of their work and make it difficult to figure out whether they're actually providing a good deal.