The Transition of Power: What Biden’s Victory Means for Tech

After a tightly contested presidential election, Joe Biden was elected as the 46th president of the U.S. Can the tech industry heave a sigh of relief with this win? Or will Biden’s administration introduce new regulations for the tech sector?

After an arduous campaign, Democrat Joe Biden will become the 46th American president with a winning threshold of 270 electoral college votes. With Biden moving into the White House on January 20, 2021, the world expects his administration to bring stability in various sectors, including tech, energy, and healthcare. 

As the president, Biden might make progress on regulating the industry on misinformation, net neutrality, and antitrust. Biden’s administration would even shred President Donald Trump’s technology policies and develop a reformed agenda that would create a long-term impact on the tech industry and the global economy. Let’s find out how the tech industry reacted to Biden’s win and what a Democratic candidate in the White House means for Silicon Valley.

America, I’m honored that you have chosen me to lead our great country.

The work ahead of us will be hard, but I promise you this: I will be a President for all Americans — whether you voted for me or not.

I will keep the faith that you have placed in me. pic.twitter.com/moA9qhmjn8Opens a new window

— Joe Biden (@JoeBiden) November 7, 2020Opens a new window

A Rise in Corporate Tax

Moving to the corporate tax, under the Trump administration, tech companies benefited from a steady stock market and a drop in the corporate income tax rate from 35% to 21%. The new tax bill even exempted American MNC companies from paying taxes on foreign-earned income. 

In fact, under the Trump administration, 91 companies in the Fortune 500Opens a new window paid zero federal taxes in 2018, which directly impacts economic growth and lower employment rates. But with Biden’s administration, there is a possibility that the corporate tax will increase to 28%Opens a new window .

In an interview with CNBC, Biden saidOpens a new window , “I think Amazon should start paying their taxes. I don’t think any company; I don’t give a damn how big they, the lord almighty, should absolutely be in a position where they pay no tax and make billions and billions of dollars.”

John Boyd, Jr., principal of The Boyd Company, explainedOpens a new window , “A high corporate income tax rate puts the U.S. at a competitive disadvantage versus lower-taxed nations like Ireland and Canada in the effort to attract new corporate investment and jobs.” 

Friendlier Immigration Policies

Trump has been an advocate of stricter immigration policies, which affected tech companies from hiring high-skilled workers worldwide. Trump brought several changes to the H1-B work visa program, such as suspension of the new immigration work visas, new H1-B visa wage rule restrictionsOpens a new window . These stringent immigration policies impacted the U.S. economy as immigrants have founded 45% of the U.S. Fortune 500 companies, including Apple, Amazon, Google, and Intel. 

However, Biden has a moderate approach toward immigration policies. During his campaign, Biden released a policy statement to reform the H1-B system and work on eliminating country-quota for green cards. These relaxed immigration policies will turn out as a boon for tech companies as it will help them become more competitive in global markets.

The campaign saidOpens a new window , “A Biden administration will streamline and improve the naturalization process to make it more accessible to qualified green card holders. Biden will restore faith in the citizenship process by removing roadblocks to naturalization and obtaining the right to vote, addressing the application backlog by prioritizing the adjudication workstream and ensuring applications are processed quickly, and rejecting the imposition of unreasonable fees.”

Also Read: Should Big Tech Lose Sleep Over U.S. Election Outcome?

An End of the U.S.-China Trade Wars?

U.S. and China have been under escalating trade wars, which has financially impacted tech companies and supply chain manufacturers of both countries. Under Trump’s administration, Huawei Technologies, ZTE Corp were added to a trade blacklist, followed by increased import taxes and the purchase of TikTok U.S. The on-going trade wars affected tech companies, including Apple, Dell, NVIDIA, Qualcomm, and Intel, that rely heavily on Chinese manufacturers.

With Biden in the Oval Office, there is a hope that his administration might look into a strategic approach with economic factors, which will enable tech companies like Apple and semiconductor giants such as Intel, Qualcomm, and NVIDIA to flourish in both countries. 

Improvement of Digital Infrastructure

During the pandemic, every sector, from work to education to healthcare, has transitioned to remote working and has been heavily dependent on the internet. However, American citizens have experienced a digital divide with inequalities in access to high-speed broadband. 

Biden said he plans to invest $20 billion in rural broadband infrastructure to bring internet connectivity to limited access regions to solve this issue. He also spoke about his plans to invest in emerging technologies, including 5G and AI, which will spur growth for the telecom industry.

Sharing his views on the U.S. elections and technology growth, Brad Smith, president of Microsoft, saidOpens a new window , “Broadband has become the electricity of the 21st century, vital for everything from patients needing telehealth consultations to children who are attending school from home. 

“Today, too many rural families find there is no broadband service available, while too many underprivileged urban families find no broadband service that is affordable. A nation that would not tolerate millions of Americans living without electricity should no longer accept millions of families without broadband.”

Along with this, Biden might restore the Obama-era net neutrality rule, a plan to regulate broadband internet as a utility, and to ensure internet service providers (ISPs) treat all internet communications equally. If the net neutrality rule is restored, telecom companies such as Verizon, AT&T, and Comcast will not be able to choose what their customers see online, nor will they charge content providers. Also, net neutrality will ensure an even playing field where small businesses will be able to compete with industry heavyweights, such as Comcast and Verizon. 

An End of Section 230?

Section 230 of the Communications Decency Act provides immunity to social media platforms and online websites from lawsuits over the content published by users on their platforms. 

In January 2020, Biden reportedly called Section 230 the tech industry’s biggest liability shield and revealed his intentions to revoke it immediately. Biden believes that tech companies, including Facebook, Google, and Twitter, haven’t done enough to curb misinformation and have amplified extremist views and hate speech on their platforms. Currently, social networking platforms are under legal interrogation. 

If Biden’s administration revoked Section 230, online platforms would have to regulate content on their sites aggressively, or they might face legal charges. Moreover, eliminating the law would bring new restrictions on online speech. Biden’s administration might use legislation against tech companies to spread misinformation.

 In an interview with The New York Times, Biden saidOpens a new window , “The idea that it’s a tech company is that Section 230 should be revoked, immediately should be revoked, number one. For Zuckerberg and other platforms. It should be revoked because it is not merely an internet company. It is propagating falsehoods they know to be false, and we should be setting standards, not unlike the Europeans are doing relative to privacy.”

Also Read: Election Day Is Here: How Will the Result Impact the Tech Industry?

Better Regulations for Big Tech Companies

A few years ago, Google, Facebook, Amazon were American success stories. But now, their market dominance has been a hot button issue that has gauged the attention of both Republicans and Democrats. 

Under Trump’s administration, in July 2020, there were landmark congressional hearings against the CEOs of Amazon, Apple, Facebook, and Google. While in October 2020, the Department of Justice filed an antitrust lawsuit last month against Google over its monopolistic search advertising practices. FTC is also planning to file an antitrust lawsuit against Facebook.

While all these cases might take years to wrap up, there is a possibility that Biden might either continue the lawsuit against big tech or settle it with improved regulations. However, few Democrats want breakups of big tech companies, which might pressure the president-elect to go after the business models and monopolistic practices of the big tech companies—for example, Google’s digital advertising business or Apple’s 30% commission for its App Store. 

Regardless of the decision, it is clear that big tech companies are now under the tight scrutiny of lawmakers, and the coming few years might blunt their market dominance and open doors for entrants and startup tech companies.

Several Silicon Valley tech CEOs congratulated Biden over his victory in the U.S. presidential elections.

Microsoft founder Bill Gates congratulated the president-elect and looked forward to working with the new administration on various global issues, such as the pandemic, climate change, poverty, and inequality.

Congratulations to President-Elect Biden and Vice President-Elect Harris. Thank you to the election officials and campaign workers who worked tirelessly to ensure a record number of Americans could cast a ballot and have it counted during such an challenging time for our country.

— Bill Gates (@BillGates) November 7, 2020Opens a new window

Jeff Bezos, CEO of Amazon, congratulated Biden and Harris on Instagram, statingOpens a new window , “unity, empathy, and decency are not characteristics of a bygone era.”

Biden seems like a new hope for the tech industry who might reshape the tech industry with better competition, promotion of new companies, and job opportunities. The financial support for Biden’s campaign also indicates that the tech industry wanted an assertive president who would make America the world’s technological leader.

How will Biden impact the tech industry? Comment below or let us know on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We’d love to hear from you!