The Regulation of Foreign Platforms

80 Pages Posted: 2 Jul 2021 Last revised: 1 Jun 2022

Date Written: June 20, 2021

Abstract

In August 2020, the Trump Administration issued twin executive orders
banning tech platforms TikTok and WeChat from the United States. These were not the
first actions taken by the Trump Administration against Chinese tech platforms. But more
than any other, the ban on TikTok sparked immediate outrage, confusion, and criticism.

This Article offers a new framework for thinking about national security restrictions on
foreign tech platforms. A growing body of scholarship draws on principles from regulated
industries, infrastructure industries, and public utilities to show how the regulation of
tech platforms is not only viable but also has significant precedent and pedigree. Firms in
infrastructure sectors—banking, communications, transportation, and energy—have long
been subject to distinct and comprehensive regulatory regimes because they raise political economy concerns distinct from those of ordinary tradable goods.

In many of these sectors, there is also a long history of legal restrictions on the foreign
ownership of, control of, and influence over platforms. This may be surprising given the
contours of the contemporary tech-platform debate. Tech neoliberals object to placing any
restrictions on foreign tech platforms because regulations would threaten the open
internet. National security technocrats advocate for a case-by-case assessment of dangers,
narrowly tailored mitigation measures, and audits to ensure compliance. Both of these
dominant paradigms suffer from a variety of conceptual and practical problems, and
neither takes foreign tech platforms seriously as platforms, akin to platforms in other
sectors.

This Article recovers the history of restrictions on foreign platforms in traditional
regulated industries, critiques the dominant paradigms in the debate over foreign tech
platforms, and offers an alternative: the platform-utilities paradigm. The platform-utilities
approach recognizes that the regulation of platforms is important and legitimate given
their distinctive political economy. Taking lessons and strategies from the history of
platform restrictions, it suggests focusing on sectors before specific firms and applying structural separations rather than complex formulas for preventing national security
harms. The platform-utilities approach would also require efforts at international
interconnection and domestic public investments. The Article concludes by revisiting the
case of TikTok with these lessons in mind.

Keywords: Tech Platforms, Big Tech, TikTok, Foreign Ownership, Separation of Ownership and Control, Foreign Relations Law, Regulated Industries, National Security, Banking, Energy, Communications, Transportation, Technology, Public Utilities

Suggested Citation

Sitaraman, Ganesh, The Regulation of Foreign Platforms (June 20, 2021). 74 Stanford Law Review 1073 (2022), Vanderbilt Law Research Paper No. 20-40, Available at SSRN: https://ssrn.com/abstract=3870781 or http://dx.doi.org/10.2139/ssrn.3870781

Ganesh Sitaraman (Contact Author)

Vanderbilt Law School ( email )

Nashville, TN 37240
United States

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