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Is 'Big Tech' the next 'Big Finance'?

Nicole Goodkind
Nicole Goodkind
Daily Ticker

There may be a four-month waiting list for the Tesla Model S but overall, there’s a lack of demand for electric vehicles in the U.S. There are currently only about 200,000 of them on the road--around 1% of the nation’s cars, way behind the government’s hopes for 5-10%.

Now legislators from eight large coastal states are speaking out. They’re expected to roll out a plan Thursday that will put 3.3 million zero-emission vehicles on the road by 2025 through consumer incentives and regulatory action.  

“We’re looking at more tax incentives and building out more electric charging stations to help stimulate more electronic car sales,” says Yahoo Finance tech reporter, Aaron Pressman.

Tesla, Tesla, Tesla

Tesla appears to be the only zero-emission game in town (or at least the only one that’s actually selling). So are these government incentives all about Elon Musk’s car company? “Well, I hope not,” says Pressman. “It’s quite possible. Tech companies are gaining more and more influence and Tesla has been fighting some lobbying battles with dealers and gaining power in order to get more government incentives going.”

‘Big Tech’ hand-in-hand with ‘Big Gov’?

It’s typical for government bureaucracy to lag behind industry. It’s also typical for an industry to lobby in order to get regulation up to speed with innovation—but is tech now stuffing government coffers and lobbying for their own regulation? And are lawmakers able to understand the regulation that tech wants them to put in place? We’ve seen Google try to get regulators on board with driverless cars, large Internet companies rallying for more freedom and even defying the government with their data disclosure policies. It seems that the policy is 'innovate now and worry about legislation later.'

“[Tech has] come a long way,” says Pressman. “They used to just get run over or ignored and now they’re building up.” But in a lot of areas where tech is important, tech companies don’t have the dominant voice, points out Pressman. “Cable and telecom companies also have a lot of say so in the net neutrality fight they’re not getting what they want….But there’s more and more at stake and so we’re seeing more and more lobbying by the tech companies and more spending.”

Google spent $14.1 million lobbying in 2013, Microsoft $10.5 million and Facebook $6.4 million—they are all on track to surpass that in 2014. At this year’s White House Correspondent’s dinner large tech companies threw some of the most popular after-parties.

Tech industry following in finance’s footsteps?

For some, tech’s move to push regulation (and deregulation) on the U.S. government might be reminiscent of the financial industry’s power in D.C. prior to the 2008 recession. Just like U.S. legislators had difficulty understanding complicated financial derivatives, they also have difficulty understanding intricate tech innovations (see: the internet is a series of tubes). It’s probably quite difficult to effectively regulate what you don’t understand.

“[Tech] is hopefully not doing anything that’s so deregulatory and hands-off that it would cause a problem,” says Pressman. “I think that the Internet has been lightly regulated, that’s clear, and will hopefully continue to be that way. It seems that tech companies are going in a completely different direction than that, so hopefully we’ll be okay.” 

In 1994 the core of the Internet was privatized by the U.S. government setting off the tech boom. “The government is being a bit of a helicopter parent,” says Pressman. “The Internet is 20 and maybe it needs more of a hands-off, net neutrality sort of thing…Hopefully the government will continue to keep its hands off allowing it to flourish.”

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