If Silicon Valley executives were hoping for Joe Biden to foster the kind of cosy relationship they enjoyed under Barack Obama, they might have taken heart from some of the people close to him and his running mate Kamala Harris.

The president-elect has hired both Jessica Hertz, former associate general counsel at Facebook, and Cynthia Hogan, former Apple vice-president for government affairs, to his transition team. Eric Schmidt, the former Google chief executive, has been a big fundraiser, and is being talked about to lead a new technology industry task force in the White House.

Ms Harris, meanwhile, has long been supported by the likes of Facebook’s Sheryl Sandberg and Salesforce’s Marc Benioff. Her brother-in-law and former chief of staff, Tony West, is Uber’s chief legal officer.

A senior executive at one major technology company said Mr Biden “has lots of friends in the industry — it is a world he feels very comfortable with.”

And yet, with the technology industry facing a host of political challenges over the next four years, from attempts to limit companies’ legal protections to threats to break them up entirely, few are expecting a return to the “golden era” of the Obama administration.

“Do we think this is going to be Barack Obama 2.0? No, not at all,” said one tech executive.

Tim Wu, who worked on technology issues in the Obama White House, said: “There has been a shift since the Obama administration, even among the people working in that administration, in the way they think about power in the tech world.

“Obama came to power in 2008 — Google was pretty small in the tech industry, so was Facebook, no one knew if they would survive. Both the facts and the tenor have changed.”

At least, reflected one tech executive, the drama should be lower after four years of rolling panic under Donald Trump.

“I can’t wait to wake up every morning and not have to fight fires because of a presidential tweet,” said one industry executive. “I’m looking forward to the day when we don’t get our legal protections threatened because Twitter has labelled one of his tweets.”

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Mr Biden’s most important decision will be how to approach the issue of competition. In the past he has said that splitting up companies such as Facebook was “something we should take a really hard look at”, without committing to do so. 

He will have to decide whether to push for new antitrust legislation, as called for in the influential report by David Cicilline, the Democratic head of the antitrust subcommittee in the House of Representatives.

Mr Biden is a centrist, and one Democratic Congressional aide predicted that he will try to avoid drama. “He is not someone who is going to say you should break up this company, but he will say you need to enact aggressive enforcement, and possibly some changes to the rules.”

But others believe that Mr Biden, who has been taking informal advice from Sarah Miller, the executive director of the American Economic Liberties Project and a proponent of Big Tech break-ups, may be pushed into taking a tougher line by the left of his party.

Barry Lynn, the director of the Open Markets Institute, a think-tank which has also called for Big Tech to be broken up, said: “They are coming in with multiple crises — the last thing they want to do is find themselves in a fight with [Elizabeth] Warren, or [Bernie] Sanders, or 52 state attorneys-general [who are pursuing their own technology antitrust cases].”

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

But these appointments will have to be approved by the Senate, which may push Mr Biden towards a moderate candidate if the Republicans manage to maintain control after elections to the upper chamber finish in January.

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Tom Wheeler, chairman of the Federal Communications Commission under Mr Obama, said: “A lot depends on the Senate. If the Republicans do what Mitch McConnell [the Senate Republican majority leader] did to Barack Obama and block appointment after appointment, then these issues get thrown into a cocked hat.”


The other worry hanging over Silicon Valley is the increasingly bitter relationship between the US and China.

Mr Biden is unlikely to reverse course entirely — he attacked Mr Trump during the presidential debates for being too close to Xi Jinping, the Chinese president, and promised to force the country to “play by the international rules”.

Yet those who have been briefed on the president-elect’s thinking say that he wants to link trade, diplomacy, technology and even issues such as climate change into a more coherent policy towards China. And this could give breathing space to companies such as Huawei and the American companies which sell to it.

“He is likely to at least listen to the argument that, by going after Huawei, you undermine American companies by encouraging China to develop its own products instead,” said Paul Triolo, an analyst at Eurasia Group who has been in touch with the Biden transition team.

Chart showing that Facebook and Amazon lead Big Tech lobbying. Total spend on lobbying congress and federal agencies, Q1 2020 ($m). Companies listed are Facebook, Amazon, Microsoft, Alphabet and Apple.


For US businesses in general, Mr Biden’s promise to raise corporate taxes by seven percentage points to 28 per cent poses the most immediate threat to their bottom line.

But for technology companies in particular, it is his promise to raise the tax on the profits that companies make from their intangible assets held overseas — known as the GILTI tax — which could have the most direct impact.

That tax was designed to target assets such as intellectual property, which technology companies often locate overseas for tax purposes, and it resulted in billions of dollars of extra payments for companies when it was introduced. IBM, for example, took a $2bn tax charge for 2018 following its implementation.

Mr Biden’s promise to double its minimum rate to 21 per cent could see companies face another round of hefty payments. But that depends on the Democrats winning the Senate. If they fail, many of Mr Biden’s tax plans are likely to fail too.

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If they do get hit with extra taxes, large technology companies are at least hoping Mr Biden will help them hire workers from overseas.

Mr Trump clamped down on visa approvals in a range of areas, but perhaps the most significant for technology companies were H1-B visas, which Silicon Valley depends on to hire engineers, scientists and coders from abroad.

Mr Biden criticised Mr Trump when the president imposed new restrictions on those visas — though he has not fully committed to reversing the changes.

“You’ll see a 180 [U-turn] on that almost overnight,” predicted one Silicon Valley executive. “This isn’t about farm workers, this is about software programmers.”

Content regulation

One area where Mr Biden has been outspoken is over Section 230 — the part of US law which shields social media companies from being sued over content posted on their sites by users.

Mr Trump has already asked the Federal Communications Commission to propose new limitations to the law.

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Mr Biden is also no fan, saying last year that “Section 230 should be revoked, immediately should be revoked.” He added: “For Zuckerberg and other platforms . . . [Facebook] is propagating falsehoods they know to be false.”

If Mr Biden does decide to limit Section 230 protections, he will enjoy support from plenty of Republicans in the Senate, such as Josh Hawley and Lindsey Graham, who have proposed their own bills to do so. He may struggle however to secure the support of Mr McConnell, who has yet to lend his public backing to his colleagues’ efforts.

Via Financial Times