Forget the Debate, the Supreme Court Just Declared Open Season on Regulators

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United States Supreme Court at Twilight

As the country reels from a Presidential debate that left no one looking good, the Supreme Court has made a landmark decision that could have far-reaching consequences for the tech industry. By reversing a 40-year-old ruling, the court has opened up regulators to endless interference by industry and the whims of judges.

The Supreme Court announced Friday morning that it had ruled 6-3 to overturn Chevron v. Natural Resources Defense Council, a case from 1984 that established a crucial doctrine in federal regulation. Federal law is often broad and requires interpretation, a task spread among all parties in the legal system. The 1984 Chevron decision established that independent agencies like the EPA, SEC, and FCC also have a say in this. In cases where the law is ambiguous, the courts must defer to these agencies in their capacity as experts in their fields.

For example, who defines whether a plot of land counts as wetlands? It can't be interested parties like heavy industry or nature advocacy groups, since their interpretations will likely be mutually exclusive. And what are the chances that whatever judge gets handed the case has any expertise in the matter? Instead, in such cases, the EPA, staffed with notionally disinterested experts on wetlands, is empowered to settle ambiguities.

This decision has significant implications for the tech industry. Who do you think defines "encryption" in law, or "communications," "search and seizure," or "reasonable expectation of privacy"? The entire concept of net neutrality is perched atop the FCC's interpretation of whether broadband data is an "information service" or a "communications service," the terms written in the act empowering that agency.

If the FCC is not empowered to settle this ambiguity in a very old law that was written well before today's broadband and mobile networks, who is? Whatever court takes the case brought by the telecommunications industry, which hates net neutrality and would prefer an interpretation where the FCC doesn't regulate them at all. And if the industry doesn't like that court's interpretation, it gets a few more shots as the case rises towards the Supreme Court.

As Justice Elena Kagan argued, the court has granted itself "exclusive power over every open issue — no matter how expertise-driven or policy-laden — involving the meaning of regulatory law." In other words, the Supreme Court has assigned itself the powers currently exercised by every regulatory agency in the country.

This decision is consequential for tech because the industry has been facing a wave of regulatory activity led by these agencies, operating in the vacuum of Congressional action. Due to a lack of effective federal laws in tech, agencies have had to step up and offer updated interpretations of the laws on the books.

Tech leaders have loudly and repeatedly asked for federal laws defining and limiting their industries. They know very well that Congress is almost incapable of passing any such laws, partly because tech industry lobbyists quietly fight them in the background whenever one with teeth is proposed.

Let us be optimistic for once and imagine that Congress passes a big law on AI, protecting certain information, requiring certain disclosures, and so on. It's impossible that such a law would contain no ambiguities or purposeful vagueness to allow for the law to apply to as-yet-unknown situations or applications. Thanks to the Supreme Court, those ambiguities will no longer be resolved by experts.

Every law has ambiguities. And at the frontiers of technology, ambiguity is even more common, since there is no precedent and lawmakers do not understand technical matters. And so, looking forward, who defines "artificial intelligence," or "scrape" or "personal information," or "invasive"? Yesterday, it might have been the FCC or FTC, which with their experts in technology, industry, markets, and so on, would have made an informed decision and perhaps even solicited public opinion, as they often do in rulemaking processes. Today, it will be a judge in whatever state an industry decides has the friendliest or most gullible bench.