Tech has been among the hardest hit sectors in the recent stock market upheaval and it could come under additional pressure as Democrats take control of Congress in the new year and promise intense scrutiny possibly in the form of hearings and investigations, FOX Business has learned.
Democratic leaders are signaling that at least two major Congressional committees, House Judiciary and House Energy and Commerce, are openly discussing hearings and launching inquiries into technology companies’ use and alleged misuse of customer information, people with direct knowledge of the matter tell FOX Business.
The probes will likely be led by several ranking members of these committees that have oversight of technology related issues: David Cicilline (D-RI) of the Judiciary Committee, Michael Doyle (D-PA), and Tony Cárdenas (D-CA) both of the Energy and Commerce Committee, these people say.
The Democrats’ interest in holding big tech responsible for privacy violations represents somewhat of an about-face for a party that traditionally considered Silicon Valley an ally in progressive causes. Executives at the big tech companies are reliable Democratic donors and have been for years. In fact, many executives on Wall Street expected the new Democratic House leadership to focus its attention and investigatory agenda on the big banks—the long time target of the party's class warfare angst, particularly following the 2008 financial crisis.
While the big banks may not totally escape scrutiny from the likes of Maxine Waters (D-CA), the incoming Chairwoman of the House Financial Services Committee, the party's leadership led by soon-to-be House speaker Nancy Pelosi (D-CA) believes the base of the party is now more wary of the power of big tech companies that exploit user data on their platforms by selling it to third parties, often without public disclosure, these people add.
At issue: a series of data breaches and embarrassing disclosures about selling user data to political operatives particularly by the social media giant Facebook that has generated significant bad publicity for the tech companies over the past year.
If and when the House focuses on the privacy issue, it could pressure stocks of companies like Google, Facebook and Amazon as well as Apple, all of which collate and in some cases have sold user data to third parties to generate enormous profits and massive stock valuations in recent years.
Without a free hand in selling this data, profits and stock prices will fall.
To be sure, the Democrats won't have a free hand in crafting legislation since they control only the House; Republicans added to their majority in the Senate during the recent midterms.