On with Kara Swisher - Time for a Data Privacy Bill + the TikTok Crackdown with Senator Maria Cantwell

Episode Date: April 29, 2024

When Kara first met Senator Maria Cantwell in the 90s, she was a tech executive at an early player in the streaming media industry called RealNetworks. Now, the Democrat from Washington is the chair of the powerful Senate Commerce Committee, and she recently released a draft of the American Privacy Rights Act. For the first time in a long time, it looks like a tech privacy bill might have a decent shot at actually becoming law.  Senator Cantwell joins the podcast to discuss her bill, her approach to tech legislation, and the biggest (and arguably most controversial) tech bill in recent history: the TikTok divestment bill.    Questions? Comments? Email us at [e-mail] or find Kara on Instagram/Threads as @karaswisher Learn more about your ad choices. Visit podcastchoices.com/adchoices

Do you feel like your leads never lead anywhere? And you're making content that no one sees, and it takes forever to build a campaign? Well, that's why we built HubSpot. It's an AI-powered customer platform that builds campaigns for you, tells you which leads are worth knowing, and makes writing blogs, creating videos, and posting on social a breeze. So now, it's easier than ever to be a marketer.

Get started at HubSpot.com slash marketers. Support for this show comes from Constant Contact. If you struggle just to get your customers to notice you, Constant Contact has what you need to grab their attention. Constant Contact's award-winning marketing platform offers all the automation, integration, and reporting tools that get your marketing running seamlessly, all backed by their expert live customer support. It's time to get going and growing with Constant Contact today. Ready,

set, grow. Go to ConstantContact.ca and start your free trial today. Go to ConstantContact.ca for your free trial. ConstantContact.ca Hi, everyone. From New York Magazine and the Vox Media Podcast Network, this is On with Kara Swisher, and I'm Kara Swisher. Today, we're talking to Senator Maria Cantwell, a Democrat from Washington who chairs the incredibly powerful Commerce Committee. I've known Senator Cantwell for decades, starting in the 1990s when I was covering tech for The Wall Street Journal, starting in the 1990s when I was covering tech for the Wall Street Journal, and she was an executive at Real Networks, one of the earliest companies to figure out how to stream audio and later video online. As chair of the Commerce Committee, Senator Cantwell helps decide which tech bills make it to the floor for a full boat and which ones don't. After she and Senate Majority

Leader Chuck Schumer expressed some skepticism at the TikTok ban that came out of the House, many people, including myself, thought the bill was in big trouble. But much to our surprise, the House amended the bill and packaged it up in a foreign aid bill that sent money to Ukraine, Israel, and our Indo-Pacific allies, along with humanitarian aid to Gaza. It got voted on in the Senate, and then President Biden recently signed that bill into law. Ah, how bills are made. So I've invited Senator Cantwell onto the show to talk about tech legislation and lack thereof. She recently introduced a privacy bill that seems like it might actually become law and might actually have some teeth. We'll talk about that plus AI and even Boeing, who Senator Cantwell has recently accused of stonewalling. AI and even Boeing, who Senator Cantwell has recently accused of stonewalling. Our question today comes from Jeff Kossoff, a privacy expert and an associate professor of cybersecurity law in the United States Naval Academy's Cyber Science Department. All that and more after the break.

Fox Creative. This is advertiser content from Zelle. When you picture an online scammer, what do you see? For the longest time, we have these images of somebody sitting crouched over their computer with a hoodie on, just kind of typing away in the middle of the night. And honestly, that's not what it is anymore. That's Ian Mitchell, a banker turned fraud fighter. These days, online scams look more like crime syndicates than individual con artists. And they're making bank. Last year, scammers made off with more than $10 billion. It's mind-blowing to see the kind of infrastructure that's been built to facilitate scamming at scale.

There are hundreds, if not thousands, of scam centers all around the world. These are very savvy business people. These are organized criminal rings. And so once we understand the magnitude of this problem, we can protect people better. One challenge that fraud fighters like Ian face is that scam victims sometimes feel too ashamed to discuss what happened to them. But Ian says one of our best defenses is simple.

We need to talk to each other. We need to have those awkward conversations around what do you do if you have text messages you don't recognize? What do you do if you start getting asked to send information that's more sensitive? Even my own father fell victim to a, thank goodness, a smaller dollar scam, but he fell victim and we have these conversations all the time. So we are all at risk and we all need to work together to protect each other. Learn more about how to protect yourself at vox.com slash zelle. And when using digital payment platforms, remember to only send money to people you know and trust. Support for this podcast comes from Anthropic. You already know that AI is transforming the world around us, but lost in all the enthusiasm and excitement is a really important question.

How can AI actually work for you? And where should you even start? Claude from Anthropic may be the answer. Claude is a next-generation AI assistant built to help you work more efficiently without sacrificing safety or reliability. Anthropic's latest model, Claude 3.5 Sonnet, can help you organize thoughts,

solve tricky problems, analyze data, and more. Whether you're brainstorming alone or working on a team with thousands of people. All at a price that works for just about any use case. If you're trying to crack a problem involving advanced reasoning, need to distill the essence of complex images or graphs, or generate heaps of secure code, Clawed is a great way to save time and money. Plus, you can rest assured knowing that Anthropic built Clawed with an emphasis on safety. The leadership team founded the company with a commitment to an ethical approach that puts humanity first. To learn more, visit anthropic.com slash clawed.

That's anthropic.com slash clawed. Anthropic.com slash Claude. That's Anthropic.com slash Claude. Do you feel like your leads never lead anywhere? And you're making content that no one sees. And it takes forever to build a campaign? Well, that's why we built HubSpot. It's an AI-powered customer platform that builds campaigns for you.

Tells you which leads are worth knowing. And makes writing blogs, creating videos, and posting on social a breeze. So now, it's easier than ever to be a marketer. Get started at HubSpot.com slash marketers. Hi, Kara. Hey, Maria. How you doing? I'm good. I'm good. How are you? Good. So just for people who don't know, I first met Senator Cantwell, I'm going to call her Senator Cantwell to start with, in Seattle in the 90s. And I remember I was just there and I had a big memory of having dinner with you there.

I think it was on First Street. I don't remember. When you were an executive at Real Networks with Rob Glazier and you and I had dinner. to remember, when you were an executive at Real Networks with Rob Glazier and you and I had dinner. One of the early players in the streaming industry, the music streaming industry. There aren't a lot of former tech executives on the Hill. I'd love you to talk a little bit about this time. Obviously, it's a long time ago, but talk about how it shaped your views. Because as I recall, you and I talked a lot about privacy in Real Networks. It was caught in a privacy controversy, which you had handled at the time. Yeah, I think, first of all, I just

want to say that thank you for dedicating your new book to Walt Mossberg, because one of the key things during that time period was that all our product reviews lived or died by Walt Mossberg. So he had such a tremendous impact on the industry. And I don't think people today understand that and understand that that's like a validation process. So when you think about where we are today with algorithms and trying to have a little more transparency about what algorithms or AI might do. The fact that there were people like Walt Mossberg and a very deliberative review process that software went through, not just with him, but I mean a whole sector, that those reviews were a third party looking at the code and then saying, yes, this is what it does, and this is how well it does it,

and this is where it's bad. this is how well it does it, and this is where it's bad. Anyway, that was just an interesting time. Yeah. We knew what was happening. Just for people to know, you were vice president of marketing at Real Networks. I'd love to get an idea of how did the tech formulate you? Obviously, both of Walt and I had big privacy.

We talked about privacy almost all the time, the idea of the violations of privacy. And we're going to get into your bill and everything else. But talk about how it shaped you, your time working in tech. Because you were early tech, which is a very different tech than today tech. I was just having a discussion with Jim Lanzone, who's now running Yahoo. There was a different internet then. It was a different attitude and everything else. then. It was a different attitude and everything else. Well, we, first of all, I had met Rob when I was in the House of Representatives for a very short term, led the charge against the administration's

then Clinton-Gore clipper chip. And we were successful at defeating that because it was an idea of let's have a government backdoor, a hardware solution. And just being a freshman member of Congress, I thought that was like a horrible idea and that we weren't going to succeed, you know, in the marketplace. So after that, I really became close with Nathan Myhrvold, somebody who was kind of a mentor to me. At Microsoft? At Microsoft. with Nathan Myhrvold, somebody who was kind of a mentor to me.

At Microsoft? At Microsoft. So the early days, it was incredibly exciting to be pioneers in that space and to really help what is now the streaming media industry that exists today. But one of the earliest things was in the Bosnian conflict, the radio got shut down and a broadcaster in the Netherlands picked it up and said, this is what's going on in that strife. And so all of a sudden you could see how a thousand flowers could bloom and this kind of enlightenment of the public

and people commenting could be a very positive thing. So you're right. It was a very different internet than today. But at the same time, there were some of the same things. I remember you and I, and I went back and looked at my stories, had lots of back and forth when I was at the Wall Street Journal talking about the spyware controversy at Real Networks. In that case, they track listeners' patterns and download history.

You guys were pretty forthright, as I recall. How did that affect your views on privacy? Because you were the one dealing with it at the time. Well, I think, first of all, I had no idea that this is what the code was and that somebody wrote it. So that right away got my attention because, yes, the good news is Rob stood up right away and said, no, no, no, we've got to take this out, we're not doing this, and helped lead an industry standard setting for privacy. But what it taught me is I kept thinking, well, how in God's name did this happen if the CFO or the general counsel or somebody hadn't said,

here's a bright line? And why was it that a bunch of developers thought that that was okay to put into a code and people didn't really know about it? Now, my sense is a competitor probably who wanted to compete with real networks is the one who figured that out and explained it to people. To me, it showed why you need a very bright line, that you have to have in the C-suite people evangelizing that these are the things you shouldn't do. Now, obviously, the world is so different than then. I mean, when you think about where we are today. Right. But it taught me that only these bright lines where you say you can't do this or the company will be sued is what is going to get the general counsel and the CEO and the CFO and everybody on the same page squashing these kinds of activities. Right.

So back in your election back in 2000, Wired Magazine reported on it and said Maria Cantwell, the 41-year-old dot-com mega-millionaire who financed her upstart campaign for U.S. Senate against three-term incumbent Slade Gordon was declared the winner in the closest statewide race in Washington's history. It went on to say, what influence she'll wield in terms of the future of technology legislation is unclear. So look back on that 20-plus years in the Senate

because there hasn't been legislation. And I want you to describe first your influence and also the lack of tech legislation, specific. I'm not talking about general legislation that can impact tech, but specific legislation. Well, very proud that we led the charge against what I would say is government overreach, just like with the Clipper chip. We took on John Ashcroft on Magic Lantern, which right after 9-11, there were a lot of attempts

to try to go further than people wanted to go on technology and really, I think, violated what we're trying to stop, just like with the TikTok battle. We're trying to stop, just like with the TikTok battle. We're trying to stop any government from overreaching into the privacy of U.S. citizens. But, you know, we were successful in passing some legislation that basically helped prevent identity theft and things of that nature.

But getting to the ranking member and chairmanship of the committee has given me the leverage to help get legislation passed. I'd love to get your say. Why has not, that's protecting us from government. And obviously there was Snowden revelations and everything else and the impact of that. And obviously John Ashcroft, the spying of the government was something very different than throttling back big tech companies as they got more and more and more powerful. From your perspective, why hasn't something happened until now? And you're saying you're now the chair of the Senate Commerce Committee. You now have a tremendous amount of power over which tech bills make it out of committee

and which ones never do. From your perspective, why has that been? I think when you look at the industry and where it's gone, and we've been, you know, definitely a proponent of some of the changes we were able to get, like on the back page and making sure that internet ISPs didn't put up language that would enable trafficking and things of women. But, yeah, big tech is pretty powerful. trafficking and things of women. But yeah, big tech is pretty powerful. And I think people thought that both DOJ and FTC could handle a lot of this. And I think what we found over the last

10 years is that, yeah, the FTC can find these companies, but does it stop the bad behavior? If you can get a $5 billion check from Google or Facebook and for their violations and you think that that sounds you know like something did it really change behavior and I think that what we've learned is it doesn't change behavior no it's a parking I called it a parking ticket in the column I wrote earlier this month the Washington Post ran an article that essentially which I thought was interesting blamed you for the dearth of tech legislation I think it's a little more complex than that myself but according to one house say that's where ath of tech legislation. I think it's a little more complex than that myself. But according to one house aide, that's where a lot of tech legislation goes to die

in that committee. It's a graveyard over there. How do you respond to critics on this? I had never pegged you as the person stopping this. I thought it was a couple of things. But talk about this. I'd love you to address that. Well, it's hilarious.

Because most of your complaints, when you stop legislation, seem to center on enforcement or lack thereof, that it's not effective legislation, so why pass it, correct, from what I can glean. But go ahead. Yeah, no, that's right. That's right. So the point is, as states, during this time period, as big tech has stopped Congress from passing legislation, lobbying against it, the one entity that they didn't really effectively stop is states started passing strong privacy laws. And those states, whether you're talking about California or Illinois or other places, were successful. That meant that they wanted to come and get a very weak federal law that would supersede them. So from the moment I became the ranking member, I've just been chased around the halls every day by the same question.

When are we going to pass a privacy bill? But they mean a weak federal standard. And so this too was like the cavalcade of that who I think people really thought they could put pressure on us to pass a weak bill and run over states. And I knew all along that there's no way California would go for that. I mean, so I wasn't really worried. It is, you know, it is painful at times to be, you know, accused of that. But in reality, I know what the game is. The game is let's pass a privacy law, say that we did, you know, maybe be even European and not be effective. And what I knew that we had a shot at doing, if more people would understand that we didn't really have that bright line and that the information age was going to continue to unfold and that we needed that bright line. So when AI happened, I think all of a sudden there was a moment again where people were just saying out loud at hearings, oh, we need a strong privacy law.

They got that AI was going to put whatever was happening on steroids and that maybe they were right. We needed something strong. Yeah. So let's talk about your privacy bill because I think one of the issues I had is they're going to pass sort of a nothing bill, right? And as you said, you were noting European privacy laws, even if they're strong, are ineffective because they don't really apply. It's not from the U.S., right? It's not the U.S. doing this. And I think the game of the tech companies is indeed to pass a bill that is no teeth whatsoever or very small fines or no enforcement or one that they,

I'm not going to say they write, but that they can deal with rather easily, correct? Yes. That's what you're saying. Yes. You recently released a draft bill called the American Privacy Rights Act or APRA. It tries to address a broad set of online privacy issues. So why don't you tell us what's in it? Well, I'm saying this is, if you want a federal law, which I do, because I still want the information age to unfold, but I also think

that it's in danger. There's a lot of challenges that it's putting on us, like the demise of the free press and less information, and obviously really harm to U.S. citizens. And, you know, even potentially when you have some of this data escape, harm to U.S. military. And so we need a strong standard. So this says we will create a federal preemption, but the standard is that if you have caused substantial harm, that you have a right to correct and that you have a private right of action. So we think that's a very strong tool. And the reason why- Liability is what you're talking about, which they don't have, correct? For sure. For sure. For sure.

So what else is in it that's important from your perspective? Well, just on this point for a second, because the European model is a little bit bureaucratic. And it is similar to the FTC. I'm not saying we don't have to have a strong FTC. I'm just saying, you know, these people move very fast and they will continue to move fast. And so I'm just a firm believer that if you create that private right,

you're planting an acorn that will grow into a very mighty oak. And that is what we truly need. And that that system is better than what the European model is, because we're not stopping the bad behavior. They're just moving faster. And I guess that is also what I learned. Working in the industry is how fast they can continue to move. So, okay, what else are we trying to do? We're saying that you can't have an algorithm that's discriminatory. We are taking your civil rights and putting it into a federal standard that relates to software code. So you can't have a code that redlines against people or uses information to discriminate against them.

And we're saying those companies who do keep in store data have to have better hygiene. You can't just hire a 20-year-old who knows very little about the safety, forgets to do a patch, forgets to fix the software, even though there's been one available for four weeks that you have to treat people's data with if you are a big data store with more certainty and correctiveness. Or, yes, you could be liable for those actions as well. So APRA would prevent states from creating stronger privacy laws. California has a very strong one, the strongest probably. Was it a concession you made in order to reach a compromise with your Republican co-author, Representative Kathy McMorris-Rogers, or is it just better policy? No, it's better policy, but we have thread the needle. So,

California has passed something, but they don't have a private right of action except for in one instance. So, we're getting a federal private right of action across the board, but we have kept, but both Illinois and California have already put on the books. And so we think that preserves what people have voted for and yet gives us the ability to get something very strong at the federal level. So there seems to be a lot of optimism around your bill

from all over the place. At the same time, some thought it should have been done years ago. Talk about why you think it took this long. Well, there's a lot of money being spent in Washington to get a weak bill, okay? And that march to get a weak bill, you know, happened when the states started getting stronger bills. And so that really only happened in the last, you know, whatever, six or seven, maybe a little longer. I don't know when the earliest privacy bill done by a state was, but you can see they're trying to clamp that down. But, you know, California passing by initiative of the people, you know, that's an even higher standard, right?

That wasn't just the state legislature. So nobody in California is going to think about overriding that. And so, but these, they really came to D.C. thinking, well, we'll correct this problem. We'll just pass this very, you know, weak federal bill. So that fight, I think people didn't really understand what was at stake. They didn't understand all the harm. Now, I mean, I had a constituent tell me the other day that her aunt had shelled out $60,000 because somebody sent her an AI video because Facebook had showed how much she likes Kevin Costner, and she thinks Kevin Costner really wants to come visit her in

Seattle, Washington. And so real harm is being done. And I think people have now come to grips with the fact that these companies aren't, that if you're in binding arbitration with them, you're not going to get anywhere. And so you want to give teeth to this. So what is the chance of this passing at this point? Where is it at this moment? Well, my colleague had a hearing in her committee on it. We're going to have hearings in the Senate on it. We hope to take action and move forward on it. I think that it is the right framework. I do think it's, again, as I mentioned, the AI discussion probably kick-started people into higher gear again because they thought this is something that, I think they got how the information age is going to continue to unfold.

When they saw AI, they were like, oh, this is going to kick it up even more. Right. So, we need a tool. So, this was people, you know, who really may or may not have been that active in this debate. I mean, obviously, on this particular piece of legislation, we have been going round and round since 2019. So people just, that moment got a lot of people saying, oh, we need a framework. We need a framework. And so what happens now?

So for people to understand, you have the committee hearings, and you've got until November to pass this, correct? Or what happens? I mean, you have until the end of the year to pass it, and we're going to give it our best shot. I mean, we're going to have hearings, and we're going to talk in more detail about why this is so important and what it does. But we've had a couple of people already who's, you know,

the National Association of Broadcasters, an industry that's been very decimated by all of this advertising switch to online. And Microsoft has said some good things about it. And we have some other more conservative groups who testified and said good things about it. So I think people are seeing, wait, wait, this might be how we achieve this. I heard the same thing from Senator Klobuchar a year ago about her bills, and she got run over by lobbying. She said the same thing several times to me on stage. She goes, Kara, I promise you this is going through. I was like, I don't think it will. So what are you facing from your perspective?

What's the opposition you're facing here? What's the thing you're watching out for that's going to cut your knees off? Well, that's a good question. That's a good, I, you know, I'm not, do I think this is a sure bet? No, of course not. This is, it takes, it takes time. But I do think that privacy as an issue in, you know, the information age, or even just in this last bill that came over from the House that we voted on, which was the whole supplemental, also had a data broker bill in there that basically showed that data brokers may not be your best friends. They may be a little bit more of the villain in this play. And I think people are waking up to that, and the public is waking up to that. And so they're saying, how can you protect me? So over the last couple of years,

you protect me? So over the last couple of years, the Senate, Republicans have stepped back on binding arbitration. There was a provision that just got passed very quickly where on this issue of sexual assault and sexual harassment, the Senate said, no, no, no, you shouldn't be stuck in binding arbitration with the company that you think has caused you this harm. And I do think there are other Republican senators who are saying, no, no, no, no, you can't be stuck in binding arbitration. So does the passing of the data broker bill and then the TikTok bill, which was in the foreign aid package, help with this privacy bill? Yes. Because how?

Explain how. Because it shows that you can pass these things, even though there's big powers and big influence who are confusing the message, that you still can prevail. I wrote a column a decade ago called the Internet Bill of Rights, and I had 10 bills, 10 different bills, none of which passed.

You know, what we could, including algorithmic transparency, antitrust bills. We ask an expert to send a question for each episode, and today's question comes from Jeff Kossoff. Let's hear what he has to say. And, of course, it's about our favorite bill, Section 230. Hi, Senator Cantwell.

I'm Jeff Kossoff, and I'm an associate professor of cyber law at the U.S. Naval Academy, but I speak only for myself. Five years ago, I published The 26 Words That Created the Internet, a history of Section 230. I published The 26 Words That Created the Internet, A History of Section 230. Since then, members of Congress have introduced dozens of proposals to amend Section 230, aimed at either encouraging platforms to take a more hands-off approach to moderation, or creating incentives for them to remove harmful but constitutionally protected content. These proposals have received a lot of attention but have not become law. The big question I would ask is, does this failure reflect a recognition that Section 230, despite its imperfections,

is better than all the alternative legal systems? And if not, how would you change Section 230? Thank you. Well, it's obviously a very big question, and he's right about the amount of debate. I would say that when it came to the back page issue, we were like, no, we need to change it. Right. This was having to do, explain what that was for people who don't know the back page. So it was when ISPs would post or have information that was about the trafficking of women. And we were like, no, no, no, you have a liability here to take that down. were like, no, no, no, you have a liability here to take that down. And I would say, you know,

the AWS case against Parler, where, you know, they basically took down information because they were the host. And basically, there was information on Parler where people were like, yeah, go attack the Capitol. And AWS took that down. So there are this debate, which is very alive and well, I guess you would say, in Congress where people are equating that kind of hate speech with free speech. And we're trying to say, no, no, no, that is hate speech. And we are trying to make sure that in our privacy law that we could get somewhere with a law that basically helps push back on the amount of data and information that's flowing from you. And really clarify this, not necessarily changing 230, but if someone was creating real harm, then we would pursue that. So I guess the best I can say is that it's going to be a continued debate. How much does reining in ISPs for their liability matter when it comes to the citizens? And to me, it matters in the context of protecting them right now with their most

sensitive data and information. So you're going at it through the privacy belt, liability through privacy and data, rather than getting sucked up into a First Amendment argument, which this always gets sucked up into, correct? Yes. And what I'd love you to talk very briefly about is this idea, a lot of the, you just referenced in the proponents that always try to drag it into a First Amendment discussion, right? Rather than what it is, which is a privacy discussion. So talk a little bit about that. We don't have enough time. I mean, it's a long story. Everybody's claiming free speech violations. Andiktok example is a perfect example we were trying to do something but everybody said oh no no this is about free speech well it wasn't it was about a government backdoor that could be doing nefarious things and how does the government have a line

that says no you can't do this so um you're not thinking about the election but i think generally around here people think by the time you get to May, it's all over. Like no one's going to do anything or let anybody do anything because it's too close to an election. So I think what we need to do is pursue this legislation and make sure that people understand that it is a real tool that could aid in so much of what we need. We don't have a bright line here. We don't have a bright line. We Group CEO, Mike Gitlin. Through the words and experiences of investment professionals, you'll discover what differentiates their investment approach, what learnings have shifted their career trajectories, and how do they find their next great idea.

Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Your business is ready for launch. But what's the most important thing to do before those doors open? Is it getting more social media followers? Or is it actually legitimizing and protecting the business you've been busy building? Make it official with LegalZoom.

LegalZoom has everything you need to launch, run, and protect your business all in one place. Setting up your business properly and remaining compliant are the things you want to get right from the get-go. And LegalZoom saves you from wasting hours making sense of the legal stuff. And if you need some hands-on help, their network of experienced attorneys from around the country has your back. Launch, run, and protect your business to make it official today at LegalZoom.com and use promo code VoxBiz to get 10% off any LegalZoom business formation product, excluding subscriptions and renewals. Expires December 31st, 2024. Get everything you need from setup to success at LegalZoom.com and use promo code VoxBiz. LegalZoom.com and use promo code VoxBiz. LegalZoom provides access to independent attorneys and self-service tools. LegalZoom is not a law firm and does not provide

legal advice except we're authorized through its subsidiary law firm, LZ Legal Services, LLC. that process, there are a lot of really complicated things happening that have to go right in order for that sale to go through. Stripe handles the complexity of financial infrastructure, offering a seamless experience for business owners and their customers. For example, Stripe can make sure that your customers see their currency and preferred payment method when they shop. So checking out never feels like a chore. Stripe is a payment and billing platform supporting millions of businesses around the world, including companies like Uber, BMW, and DoorDash. Stripe is a payment and billing platform supporting millions of businesses around the world, including companies like Uber, BMW, and DoorDash. Stripe has helped countless startups and established companies alike reach their growth targets, make progress on their missions, and reach more customers globally. The platform offers a suite of specialized features and tools to power businesses of all sizes, like Stripe Billing, which makes it easy to handle subscription-based charges, invoicing, and all recurring revenue management needs. Learn how Stripe helps companies of all sizes make progress at Stripe.com. That's Stripe.com to learn more. Stripe. Make progress.

Now, you just mentioned TikTok, which is interesting because it, of course, has been using these free speech arguments. So let's talk about that. President Biden just signed a bill to force ByteDance to divest itself from TikTok. Explain what the bill does and how it's changed and how it's supposed to work. Because you were originally skeptical of the bill as it was written in the House. Talk about the changes and why your movement towards it was a big deal because you were in opposition to the original. Your movement towards it was a big deal because you were in opposition to the original.

Yeah, well, the truth of the matter is, but again, this is where all things get confused because we don't have enough journalism. We, you know, more than a year ago, drafted a bill called the GARD Act, which said, let's create this tool within the federal government. So similar to CFIUS. That bill just didn't get a Republican co-sponsor for people, didn't it? Right, because the purview that you've just described is pretty broad, that people out there are on the Republican side. Oh, there's a deep state. You can't trust anybody. You can't give anybody new powers. You can't trust anybody. You can't give anybody new

powers. You can't give a president new powers. You can't give the Department of Commerce new powers. You can't do this. And so I was running into this at the same time we were negotiating with DOJ and Commerce and everybody and working with people. But we put it out there because we thought we do need a tool. I mean, we can't have Huawei and the hardware situation, and we can't have another software situation come up in the future. We really do need a tool here, a government process. But when the House- The unsiphius.

Yes, yes. And so when the House popped out this bill, and we met with the sponsors in a secure location to talk about all of this, none of that I'm revealing, nothing secret here. But they just said, this is the only way we got this done. We couldn't give the authority to anybody. We couldn't give the authority to anybody. We couldn't. They didn't think that their coalition of people would support saying, yes, Department of Commerce or Department of Justice or what have you, that they could only do it, that the GARD Act as a tool wasn't likely, you know, if I could have put that on the table. Now, we considered other things, you know, the notion that the FCC, you know, because really, you know, the social part should be the small part. The media part should be the big part. I said that, I'm like, it's a broadcast network.

Well, I keep, I kept saying, why didn't I put it on a sign like media in a big way? Because we wouldn't let them own ABC News and we wouldn't let them do programming of ABC News, right? So we would, you know, we thought about other tools, but in the end, we realized that we had to figure out how to turn this really into a divestment bill and give time for a negotiation to take place. And that the House tool being so targeted towards six months really wasn't going to pull that off. And that was your skepticism of the bill? Is the time frame? No, the GARD Act, which I introduced was the real way I think we should deal with this, and this is listening to DOJ and the two cases, Montana and Trump cases, where they lost, we realized that we had to have something on the constitutionality that would hold up in court. And so we wanted to craft that because we didn't think this was going to be the last time we'd have to use it. And we think with hardware, we still have liability, too.

liability too so and that's why i'm for like a technology nato like okay you big five sophisticated democracies you know u.s europe japan you know you set the rules of the road on how um the information aid should work on this and because your democracies and your sophisticated technologies and then just tell the rest of the world look if you want to sell products into this system then you need to meet this standard too. Right. And that way it won't feel so personalized. Yeah. Yeah, it won't feel so personalized to China.

So, but the bottom line is here this bill was coming and we gave them changes, but the one that they felt most comfortable with was the point we were making on turning it into a true divestiture. And how did you do that? By giving enough time for people to communicate about it. Right, that was one aspect, to make it 270 days.

Yeah. But one of the things, talk about the constitutionality. You just referenced it very briefly, but at one point you said of the House bill, quote, I just don't know if it'll hold up in court. Let's get to something that can be upheld. So talk about that. Is it just the timing or that you've done something here? Because several people think it holds up a little better. You referenced two cases where TikTok won in Montana and with Trump. Right. Well, Grindr is another example where the other thing happened, where we were successful

at getting the divestiture. And so we do think it can be successful. And so myself and Warner went out to the floor to talk about the purpose and findings in a little more detail so that we had that for the record and to talk about what we're really concerned about, that this is not to be punitive.

It's not to punish ByteDance or TikTok, but to make sure that U.S. citizens or U.S. military aren't hurt by nefarious actions that could be taken by an algorithm that basically could be pushed into the system by a government entity. And so we have put that into the record. It probably wouldn't have had any more clout if it was in the bill than it is than what we just did. But we wanted to get that out there. But the key thing is to give our government the tools to communicate with the Chinese government about this in a longer period of time. And that was achieved.

A lot of legal scholars just worry about the free speech implications of this bill. Play devil's advocate and argue their point, and then tell us how the bill addresses those concerns. Well, everybody wants, just like I mentioned in the early days of Real Networks, you want a thousand flowers to bloom. That was the power of the internet, that anybody could become a broadcaster. Okay? So yeah, we love that. And we love that because we're Americans and we believe in free speech. And when you think about what that allows us to do, lots of things that people get to express their opinion. But being lectured about free speech from, you know, a dictator is pretty crazy when you can't even, you know, I mean, they're basically, you know, controlling that information,

not just in China, but, you know, in nefarious actions that could be happening on these platforms. So the key thing here is for us to continue to evangelize this issue. We want no government backdoors, just like I fought on Clipper Chip, just like I'm fighting now, no government backdoors. That's not the- Including the Chinese government. For sure the Chinese government. Look, there's indications that they're taking the most vulnerable in our society

and targeting them because of their vulnerabilities and then sending them content that just accelerates that vulnerability. And that is what we got to put a stop to. And if U.S. companies are doing that too, just because they want to make some money, kind of like what the Facebook whistleblower said on the algorithm that increased hate speech and they said oh it makes us more money so we're going to do it no no no put a stop to that put a stop to that on pivot Scott and I have been debating the TikTok legislation for years and I've always thought the security the national security threat is very real and just uh just the fact that they can do it even if they didn't have proof that they did it was enough that said i thought it was really important for the government to show proof so that people would be convinced of what was happening

and that they had to sort of uh put up that proof in order to get the legislation passed because of such an opposition around first amendment issues um and i i i certainly do think something nefarious is going on largely because we do not have reciprocity there and also because they can do it. And so if you can do it, they will do it. But what do you think about this idea of needing to see evidence in order to pass legislation like this? Well, I went through, you know, again, don't think anybody runs to a floor speech from the United States Senate, but I did go through the Rutgers information that was published in a report recently

about the kinds of activities where you show similar platforms and their ratios. And, you know, how is it that you can have like, you know, 5,000 times more statements about the Dalai Lama or Tinaman Square on Instagram. Because they can. I think I've come around to the idea is if they can do it, that's enough. You know, whether they did it or not, I don't really care.

In a lot of ways, which has been a shift for me in a lot of ways, is the idea is the ability to do one. And then the rest, because if we had reciprocity, that's exactly what we'd do, too, by the way. The U.S. government would use these platforms if they were available in China, presumably. But one of the things was the pushback from TikTok and their lobbyists. So a bipartisan group of lawmakers worked together for a year to write the bill in secret because they were afraid lobbyists would water it down. You were speaking about watering down privacy bills before. TikTok has spent over $20 million on lobbyists since 2019, hired a raft of former congressional aides, including your former deputy chief of staff and acting legislative

director, Rosemary Gutierrez. Talk a little bit about this because the money is real. Why was it important to keep it within a small group of people from your perspective? Well, I don't, you know, I don't know that we were trying to keep it within a small group of people from your perspective? Well, I don't know that we were trying to keep it within a small group of people. I mean, Mark Warner put something out, the Restrict Act, and they just attacked the hell out of that. And we put the Guard Act out. You know, they didn't really attack the Guard Act. I mean, they probably thought, okay, well, good luck getting that passed. I don't know what they thought, but they didn't attack it with the same—

Gusto. Yeah, the same gusto they did restrict. But I do think the House colleagues thread—they basically were, it looks like, maybe a little more— Cognizant. Oh, I mean, like formulaic and how they were going to roll this out and and i mean it's not lost on me that there's been this china committee and that the house republicans particularly i mean i i believe in a more coopetition model that you compete and cooperate on various things that it's not just black and white. But the committee over there, I think,

had been working, so you could tell that that was a priority for them to do something. And I think those, I don't know how long it took you to have to talk to Gallagher or Krista Murphy about that, like how long they were on the, you know, the side of keeping this quiet. But I have to say, I was surprised. We had been talking to a lot of people at DOJ and Commerce and others about the GARD Act because we kept trying to figure out how we could get the Republicans, although the Republicans in the Senate were like, no, no, no, we don't want to go there because we're worried that it's going to give power to somebody and that they're going to step on free speech.

And they just drank that Kool-Aid. And we just kept saying, that's not what this does. Our government's asking us for a tool that will stand up in court. Let's give them one. You weren't part of this group. They did worry about the impact. And, in fact, once it was out, I wasn't sure the TikTok bill would make it through the Senate because a lot of people didn't think it was happening. But President Trump signed an executive order that would have essentially banned American companies from doing business with TikTok.

He recently flip-flopped. Now he's against the ban. Why do you think he did that? And what will happen if he wins in November with the implementation of the law? Well, I don't know why he does anything, really. I don't know why he does anything. But I think that the process here is for the U.S. government to, in earnest, over the next six months,

really try to get this figured out. And to be sold to someone. Is there any preference for sale from your perspective? No, no, no. No, not at all. And then the last question about that, what about retaliation?

I mean, it does give China the chance to say they created some technology and it got sold on Wall Street and they made, you know, whatever, $200 billion. Like, if I was China, I'd be saying, hey, why don't we claim that we know how to do innovation? Like, what are your two choices? Be known for government backdoor influence or say that you're an innovator?

I would take the money and say I'm an innovator. But it is important for us to go back to this technology NATO idea. This isn't about picking on any one country. This is about saying these are the standards of the information age. And, you know, you should say this is, you know, you got to respect, you know, intellectual property. You can't have government back doors. You have to have transparency. You know, the things that we all could define and uniformly define, and then that would help everybody, would help Americans understand, oh, these are the

standards. These are the international standards of countries that are democracies and sophisticated technology countries. So they know what the rules of the road should be. And everybody else, if they're not complying with that, then you have to be suspect of their products and services. So I have a last question. Two things you said. You mentioned AI, and it comes up a lot. And we could spend an entire episode talking about it. Maybe we will.

You recently introduced a bipartisan bill called the Future of AI Innovation Act. Is that something we need to get out of it? It shouldn't take 20 years to do something about this at this point. And how are you looking at AI regulation overall? Well, back to this privacy law, I guarantee you it's real teeth in the law about algorithms where AI could use information on your sensitive data and then basically feed you something or continue to promulgate that information into discriminatory actions. So it might be, look, we saw all this healthcare stuff about you, now we think you should have a higher health insurance rate. We saw all this information about you and your employment or what have you.

Okay, so we're right now saying you can take action against that. But it is important for the US government. My colleague, Todd Young and I, who introduced this legislation also four years ago, introduced legislation that is the premise of what the executive order is. So now we're saying,

let's take these four responsibilities. The federal government needs to know and understand, you know, the system of what we're going to do actors, bad actors, on deep fakes. We have to train and skill a workforce on AI. And we need to make sure that foreign actors are not doing nefarious things with AI. Those are the four things that we think we need to address immediately. Okay, my final question sort of dovetails into a company that's in Washington. As chairman of the Commerce, Science, and Transportation Committee, you recently accused Boeing, which was founded in Washington, has most of its employees there of stonewalling an investigation into the door that blew off the Alaska Airlines flight. But one of the things that always struck me is that in that case, there's lawsuits, the CEO lost his job, there's investigations,

there's liability, there's everything coming down for it. One of the things you said that has really struck me here besides TechNATO is it's sad that people don't trust the government. In this case, they do, right? The government is being very strong here. And in the case of tech, they don't. Why is that? Well, I think you've said this. We've said it. Data is being weaponized. But the other thing that's happening is that what I would call it is, you know, basically bean counters have been empowered by information to have more rise within organizations because they can say, oh, this is what we could do and we can make more money. The information has given people a prejudice towards just the money-making side of the equation.

And we're saying, go back to solid engineering. That's what's going to win the day. Solid engineering, listening to the aerospace machinists and the aerospace engineers, and that's what's going to win the day. So why do people trust government for this stuff and not for tech? Well, I'm not, listen, I'm not 100% sure. I mean, they want to trust government, but in this case, the FAA got to be too light touch. And why?

Why? Because the technology was moving faster than they could keep pace with. So there is a whole big other issue here is how do you get a workforce within government that is smart as these companies are? And you know darn well that's very hard to do, very hard. But we have to figure out some way to elevate that debate and discussion. So if they're not working with or in the government, they're at least helping us dissect these issues. So with the FAA example, the bill that we wrote after the two MAX crashes said, you need to have these, what we would,

we just call them gray beards, but there are people who really understand technology and can identify for the FAA what some of those next generation technology risks are. And so we had this expert witness panel just two weeks ago, and they did a fabulous job. MIT professor in aviation who just tragically lost his sister in one of the MAX crashes. So the irony of he, but he's one of the people that worked on the task force, but the NASA people were there.

Everybody came together. And that is what we need to do to tackle the information age or harness it, if you will. I mean, there's a lot of good that happens, but we have to harness elements of it. But what does the government need? It needs smart technology people either to work at these agencies or to help understand the dynamic effects of this. And it's a challenge, but we have to step up to it. Senator Cantwell, thank you so much. Great to talk to you.

Today's show was produced by Christian Castro-Russell, Kateri Yochum, and Megan Burney. Special thanks to Sheena Ozaki, Andrea Lopez-Cruzado, and Kate Gallagher. Aaliyah Jackson engineered this episode, and our theme music is by Trackademics. If you're already following the show, come join us at TechNATO. If not, you belong to the Axis of Evil. Go wherever you listen to podcasts, search for On with Kara Swisher and hit follow.

Thanks for listening to On with Kara Swisher from New York Magazine, the Vox Media Podcast Network and us. We'll be back on Thursday with more. Support for this podcast comes from Stripe. Stripe is a payments and billing platform supporting millions of businesses around the world, including companies like Uber, BMW, and DoorDash. Stripe has helped countless startups and established companies alike

reach their growth targets, make progress on their missions, and reach more customers globally. The platform offers a suite of specialized features and tools to fast-track growth, like Stripe Billing, which makes it easy to handle subscription-based charges, invoicing, and all recurring revenue management needs. You can learn how Stripe helps companies of all sizes make progress at Stripe.com. That's Stripe.com to learn more. Stripe. Make progress. Thank you. these by reading Alex Partners' latest technology industry insights, available at www.alexpartners.com slash vox. That's www.alexpartners.com slash vox. In the face of disruption, businesses trust Alex Partners to get straight to the point and deliver results when it really matters.