Josh Hawley Versus the Machine

WFB: If you were looking for a David to the multi-billion-dollar, big-tech Goliath, you could do worse than Sen. Josh Hawley (R., Mo.).

Since arriving to the Senate in January, Hawley has made a name for himself as a Silicon Valley skeptic. In March, he attracted attention for his heated cross-examination of Google executives. And in May, he delivered a provocative speech at the Hoover Institution in which he called “the entire social media economy” a “source of peril” for America.

Hawley has also put his legislation where his mouth is. He has floated four separate bills meant to regulate tech: an update to the Children’s Online Privacy Protection Act, a federal Do Not Track right, a limit on how video sites serve content containing children, and a ban on “loot boxes” in video games marketed to kids.

This last bill, in particular, has attracted derisive attention from critics, who dismiss it as of a kind with the craze for video-game regulation in the 1990s. Video games, social media—is it really fair to bring so much rhetorical and legislative pressure to bear on toys and sites for chatting with your friends?

But, as he explained in a wide-ranging conversation with the Washington Free Beacon, Hawley views his legislative work as part of a deeper critique of how tech firms, often heralded as the future of America, have designed a profit model driven more by addiction than innovation.

“One motivation [of the loot box bill] is to protect children from exploitative practices that are targeted directly at them,” Hawley said. “And I think it gets to a broader question about what video game companies, social media companies, are doing employing exploitative practices, addictive practices, in their business model, often aimed at kids, in order to make money. Is this really something that we want to countenance?”

The business models of many tech companies do differ radically from those of traditional firms. When we interact with real-world businesses, we usually trade money for whatever they sell, whether it is a hamburger or repairs to your house. But many popular tech products, like Facebook and YouTube, provide their content to users for free and make their profit off collecting data and then serving personalized ads. Video games increasingly work in much the same way, providing a “free-to-play” experience that users can really only compete in if they buy in-game content.

Hawley’s view is that this profit model naturally lends itself to practices that encourage addictive behavior. Thus loot boxes: cheap in-game items that cost money to open, which randomly spit out an item, usually worthless but sometimes rare. The concept, which encourages users to buy many boxes to get a sought-after in-game prize, is reminiscent of casino slot machines. The result, as tech site the Verge recently documented, is that players can spend thousands of dollars on games that are nominally “free.”

Hawley is not the only one concerned about this dynamic. His loot box bill is co-sponsored by two Democrats, Sens. Ed Markey (Mass.) and Richard Blumenthal (Conn.). Sen. Maggie Hassan (D., N.H.) told the Verge that she is also interested in more regulation. And overseas, fifteen members of the Gambling Regulators European Forum signed a letter in September saying they fear the risks of “blurring of lines between gambling and other forms of digital entertainment such as video gaming.”

Most of Hawley’s proposals are specifically aimed at restricting tech firms from reaching children. As he put it, he wants to stop firms from “exploiting children by putting little casinos on their phones…to make a buck,” emphasizing that “we don’t allow casinos to target children and minors.” Kids have been known to spend thousands of dollars (or pounds) of their parents’ money on in-game purchases.  read more