Surreal
Ambiguity is a feature, not a bug.
Senate bill wrongly empowers bureaucrats, falls short of protecting children
It takes courage to stand up to a bill entitled the “Kids Online Safety Act” because you see unintended consequences baked into the statute by the ambiguity of its language.
‘Kansas Attorney General Kris Kobach sums this up perfectly in his own recent remarks opposing KOSA, stating: “Furthermore, this bill would give the FTC broad authority to determine what content is ‘harmful,’ and without clear guidance on what constitutes compliance with the law. This lack of precision leaves a great amount of room for interpretation, setting the stage for overreach and arbitrary enforcement. … For example, what happens when the FTC determines that it is not in the best interest of a child for parents to be able to see who their kids are messaging because Khan wants children to be able to explore online resources related to sexuality and gender?”
‘The significant changes to the duty of care provision in KOSA have made it clear that this bill would fail to protect our children and disenfranchise parents from making important decisions on their children’s online usage. Commonsense educational tools that put parents first and ensure our children are protected online make a lot more sense than handing off the privilege and responsibility of parenting to Khan and her followers at the FTC.’
Congress Tries to Protect Children Online
Loper should have sent the message to Congress that writing ambiguous statutes wasn’t going to play in the future, yet here they are. What better way to insert regulators into the mix than with vague language wrapped in signaling something virtuous? Who in their right mind doesn’t want to protect children online?
‘While the bill narrowly defines what constitutes “harm,” it doesn’t specify the kinds of features that would violate this legal duty. Rest assured that Lina Khan’s FTC bureaucrats will interpret the word broadly in the popular cause of protecting children.
‘Some platforms could be deemed harmful and illegal by their very design. Merely letting teenage girls post photos of themselves and others to comment on them could violate the bill’s duty of care since it could result in unhealthy peer comparisons about body image and anxiety. Violent video games could be deemed to cause antisocial tendencies.
‘Regulators will inevitably use a tragedy tied to a teen’s online activity to dun companies whether culpable or not. While state Attorneys General wouldn’t be allowed to enforce the bill’s duty of care, they would be allowed to sue platforms for other violations of the law—for example, if social influencers fail to disclose they are paid to promote a product.’
How to Avoid Regulatory Spaghetti with AI Regulation
You rarely see any talk of “balance” when it comes to regulation. Tradeoffs? That’s the other guy’s problems. The EU will box itself into an irrelevant corner on AI.
‘Ultimately, if we see a costly and complex regulatory regime in place, this runs the risk of closing off emerging tech talent houses, as well as investment across the U.K. and the EU. To avoid this, regulators should learn from other successful ventures and previous legislation to see how the balance between regulation and innovation can be struck.’
Where to Begin with Regulatory Reform
Transparency is a first step, but it’s only a first step towards sustainable regulatory reform.
‘“Federal agencies cannot reliably perform cost–benefit analysis, for the same reason that students should not grade their own tests,” the report says. Congress should create a regulatory-review office, modeled on the office that already exists for the budget, with a staff exclusively dedicated to analyzing and scoring regulatory actions. Agencies should be given regulatory report cards that include information such as the number of rules emanating from the agency, their economic impact, and their compliance with existing laws.
‘The report proposes a Regulatory Reduction Commission, modeled on the Base Realignment and Closure Commissions that have successfully eliminated unneeded military facilities. The commission would report to Congress on outdated or redundant regulations, and Congress would then be able to eliminate them by joint resolution.
‘Above all, Congress must take responsibility for major regulations. A Senate-confirmed official should be required to sign off on any new rules, and Congress should be required to vote on major rules. Bills such as the REINS Act and the Congressional Responsibility Act have already been proposed to achieve those ends. The REINS Act passed the House last year.’
This statistic needs to be stated and restated at every turn.
‘Federal regulatory burdens cost the average household more than $15,000 per year – more than food, clothing, education, or any other household expense except for housing. In total, regulation imposed a $2.1 trillion total cost, rivaling the $2.3 trillion income tax cost.”
Broadband groups sue to block FCC data breach rules, arguing that Congress prohibited this with action under the Congressional Review Act.
If true, this demonstrates that bureaucrats will not be denied by their Congressional overseers. They’ll just keep repackaging things until they get what they want. It rhymes with the repeated attempts at maneuvering around judicial rejection of student debt relief.
‘The broadband groups have argued that Congress has directly forbidden the agency’s action, exercising its authority under the Congressional Review Act to stop similar FCC regulatory measures from taking effect in 2016. Their argument hinges on the new rules exceeding FCC statutory authority by prescribing data privacy rules for a new class of data—personally identifiable information.’
EU deforestation regulation could be disastrous for beef trade
The US beef industry may end up selling far less product in the EU because of new vague regulations from the EU requiring proof that the product did not benefit from or contribute to deforestation.
Maybe the real goal is to cut beef consumption in the EU by making it more expensive.
‘While it is not surprising that beef is on the list of products covered by EUDR, the notion that U.S. beef production contributes – or benefits from – deforestation is far-fetched. But as Erin Borror, U.S. Meat Export Federation (USMEF) vice president of economic analysis explains, the steps required to comply with EUDR are not well-defined and the regulation makes the EU an even more difficult market for the U.S. beef industry to serve.
‘“The EU could have made this workable with a negligible risk classification that allows a supplying country to be written out of the regulation if it has rigorous data showing that its production of beef and other affected products is not impacted by deforestation,” Borror said. “But as currently written, good actors are subject to the same requirements as those regions where deforestation is a genuine concern. U.S. agriculture simply does not contribute to deforestation in the United States. The U.S. beef industry is part of the solution, not part of the problem, and we should not be penalized by this regulation.”’
Australia has been seen historically as a crypto-friendly venue. The Australian securities regulator has been aggressive recently in its enforcement ahead of legislation that Australia plans to release in draft form by the end of 2024.
“Regulation by enforcement” is a theme everywhere.
‘In July, a parliamentary committee report recommended that the Australian Government recognize that ASIC has “comprehensively failed to fulfil its regulatory remit.” Earlier this month, Coinbase hired David Menz, who held senior positions at ASIC and the Australian Treasury’s Digital Assets and Crypto Unit, as its APAC Policy Manager.’
Bureaucracy does not have to be forever.
‘Of the 426 administrative agencies established since 1946, he found, 251—or 59 percent—had ceased to exist by 1997. Among the dead: the Office of Technology Assessment and the National Biological Service, both killed off in 1995 after Republicans took control of Congress. It’s true that many agencies simply saw their functions transferred to other organizations. The Council on Economic Policy, born in 1973, was absorbed by something called the Economic Policy Board only a year later. Even so, Lewis says, it appears that "bureaucratic structure may be more malleable" than hitherto supposed. Smaller agencies and ones created by executive order rather than by statute were more likely to vanish. The death toll more than doubles during wartime.’