As if Big Tech weren’t powerful enough already, recent decisions by the Supreme Court will give some of the most valuable companies in the world more latitude to undermine the government’s ability to rein them in, according to legal experts WIRED spoke to.
“This has been a bad couple of weeks for regulatory agencies, it’s been a bad couple of weeks for the rule of law, and it’s been really terrible for consumers,” says David Vladeck, a professor at Georgetown Law and former director of the Federal Trade Commission’s Consumer Protection Bureau.
On Thursday, the Supreme Court ruled that enforcement decisions by the Securities and Exchange Commission in fraud cases should be litigated in court, a decision that could carry over to other agencies. The next day, the court voted to overturn a key precedent known as the Chevron doctrine, which emerged from the 1984 ruling on Chevron v. Natural Resources Defense Council. The doctrine gave federal agencies the power to interpret laws when rulemaking and ensured that lower courts deferred to them. Now, courts will get to decide how much deference to give regulators’ decisions—and the same conservative legal movement that led to the Supreme Court’s decisions over the past week has infiltrated lower courts as well.
The carnage continued this week. On Monday, the court struck another blow to regulators after it ruled that a North Dakota truck stop could sue over debit card fees. The ruling will allow companies to challenge long-established rules.
Laura Phillips-Sawyer, a professor at the University of Georgia School of Law, tells WIRED that these decisions will “surely have a chilling effect on further rulemaking” and encourage more litigation from tech companies. Phillips-Sawyer compares the current moment to the 1930s, when the Supreme Court struck down recently implemented New Deal legislation empowering the federal government. There are important differences today—the court is overturning long-standing precedents rather than new laws, for example—“but it seems like a crisis nonetheless,” she says.
The court’s recent trio of rulings—which fell along ideological lines, with all the conservative judges assenting and all the liberals dissenting or abstaining—are the latest in a series of politically conservative judgments undermining what is often referred to as the “administrative state.” In 2021, for example, the court revived the so-called major questions doctrine, which made it so courts will not automatically assume agencies can definitively rule on important issues, unless Congress has explicitly said so. In 2022, the court used this doctrine to invalidate an Environmental Protection Agency ruling requiring coal-fired plants to adopt cleaner technology.
Big Tech firms have already begun to take advantage of these shifting winds. Meta, for example, filed a lawsuit against the FTC in 2023 over a proposal that would prevent the firm from profiting off data collected from minors, arguing that the FTC’s authority is “unconstitutional.” At the time, Senator Ed Markey, Democrat of Massachusetts, said that Meta was adopting “extreme, right-wing legal theories.” Vladeck says that Meta may use the court’s decision about SEC enforcement actions in its arguments against the FTC.
SpaceX has adopted similar tactics in its battles against federal regulators. After the National Labor Relations Board in January accused the company of illegally firing eight workers for criticizing Musk in an internal letter, SpaceX filed a lawsuit alleging that the agency’s structure is unconstitutional.
The overturning of Chevron in particular means “we’re clearly going to have more litigation,” says Berin Szoka, director of the Washington, DC-based nonpartisan think tank TechFreedom. For example, the FTC’s April decision banning noncompete clauses is likely at risk. Even though the agency has not relied on Chevron in its enforcement actions in recent years, the doctrine did provide it a level of deference in courts when it came to rulemaking. “There’s a zero percent chance that argument wins now,” Szoka says.
Another decision that could be more easily challenged is the Federal Communications Commission’s ruling, also in April, reinstating Obama-era net neutrality rules that were rescinded under the Trump administration. Net neutrality, proponents argue, is an important consumer protection principle that ensures service providers can’t give some types of traffic (for example, their own streaming services) better treatment than others. The FCC’s 500-page document on the decision explicitly names Chevron as one statute that gives it the authority to reinstate the rules.
Szoka emphasizes that while the decision to overturn Chevron is likely to create “confusion” in lower courts, it isn’t a death sentence for courts’ deference to regulators. Courts will now decide how much weight to give regulators’ decisions—that could be a little or a lot—and it’s possible that some of those cases will end up before the Supreme Court, further clarifying the new rules.
In the event of a second Trump administration, the recent changes may even end up being beneficial to progressives, Szoka points out. If the Trump administration packs agencies with leaders who are loyal to the president and carry out his agenda, Szoka says, “I think you have to ask, do you really want the courts deferring to those agencies?”
In the meantime, Phillips-Sawyer says, other countries have already stepped up to regulate tech companies in ways that affect US consumers. “Tying the hands of administrative agencies may have the effect of ceding regulatory authority of fast-moving tech industries to the European Commission on issues like privacy, data portability, and digital platform access and interoperability,” she says.
In effect, Phillips-Sawyer adds, the US is falling behind the rest of the world when it comes to important issues like antitrust: “The US invented competition policy—what we call antitrust law —but we’re not only failing to adapt to modern times, we’re falling into political retrenchment.”
With the death of Chevron, Congress could step in and try to legislate a comparable level of deference to regulators. However, that strategy is not guaranteed to succeed. “It's hard for Congress to overrule the Supreme Court precedent,” says Vladeck. “Congress tomorrow could pass a statute reimposing the Chevron rule, and the court would ignore it.”
With all of the Supreme Court’s recent rulings undermining the federal government’s power and giving courts more latitude, something fundamental has shifted, according to Vladeck. “It’s now an imperial court,” he says.
Correction: 7/3/2024, 3:00 PM EDT: A misspelling of Laura Phillips-Sawyer's name has been corrected.