Brunswick Review

In Conversation: Adam Kovacevich

Brunswick speaks with the founder and CEO of a new technology industry coalition about anti-trust regulation, key trends, and why he remains a “techno-optimist.”

Adam Kovacevich is founder and CEO of the Chamber of Progress, a new technology industry coalition devoted to a progressive society, economy, workforce, and consumer climate. Chamber of Progress’ corporate partners include Amazon, Google, Meta, Uber and many more.

Kovacevich recently served as Head of North America and Asia Pacific Government Relations for Lime, the shared scooter mobility company, where he led a team that expanded consumer access to shared scooters and helped cities craft smart rules of the road for a new mode of transportation.

 

High Resolution 5 (6)

Prior to that, Kovacevich led Google’s 15-person US policy strategy and external affairs team. In that role, he drove the company’s US public policy campaigns on privacy, security, antitrust, intellectual property, intermediary liability, telecommunications, advertising, taxation and workforce issues—as well as its partnerships with conservative, progressive, consumer and civil rights organizations.

Kovacevich is an active member of the tech policy community, having served as a board member for the Internet Association, Information Technology Industry Council, Information Technology and Innovation Foundation, Internet Education Foundation and National Cyber Security Alliance, as well as an advisory council member for the Center for Democracy and Technology.

He spoke recently at a Brunswick webinar moderated by Senior Advisor Debbie Frost. Their conversation has been edited and condensed for clarity. 

You’re a self-described techno optimist. Can you tell us why that is and if it's still the case today, particularly when people are so wary of the role tech plays in the fabric of our society?
I call myself a techno optimist with a pragmatic asterisk. I’ve always enjoyed working where the future meets the present—where the stuff that's exciting for the future meets the concern of the present as represented by policymakers and their constituents.

The way in which technology has enabled protests and whistleblowing and dissent—progressives have wanted that for a long time. What troubled me was that a lot of Democrats stopped viewing tech as “their” industry, or our industry, when Donald Trump got elected.

The Congressional Democrats went from thinking that the internet was this thing that we used to get Barack Obama elected to the thing that the Russians used to get Trump elected. Many of them quickly turned from techno optimist to techno pessimist. But Democratic voters show consistently positive attitudes toward tech. That's a big gap that we're trying to fill.

Tell me about the Chamber of Progress and what your plans and goals are.
I had been a consumer of trade associations for much of my career and was starting to see ways in which trade associations were failing companies, or at least coming up short in terms of the value that they were delivering. First, several trade associations that I was a part of were basically being run by company member representatives and had devolved into companies vetoing each other back and forth. That leads to the association losing its effectiveness over time.

Secondly, there are more and more public interest groups on the left that are anti-industry. As those groups got a mix of funding from companies and foundations, they faced pressure to take only foundation money and be anti-industry, which left a void on the center left.

I founded Chamber of Progress to respond to those dynamics. We don’t have a company member board. Companies don’t have a vote or a veto, which is a similar setup to the US Chamber of Commerce.

When I pitch to companies, I tell them, "I want you to be 70% thrilled that we're going be an effective bulldog for you and 30% begrudgingly tolerant of the rest."

And I believe that value proposition is better than “20% ho-hum happy” with what you're getting from a bland, neutral association. Some companies are game for that, some companies are not.

We're also expressly center left: we’re trying to articulate a path for the moderate Democrat who may have some concerns about tech but isn't ready to throw the whole industry overboard.

I think it's safe to say that it's going to be choppy waters for tech this year. Can you share some of your predictions for what we might see from the industry?
One of the things that guides me in our work is the understandable anxiety around the power of big tech.

Ultimately, whether the debate is about anti-trust, or speech content moderation or privacy, they are all just different components of the debate on how tech carries power. And the big dividing line among Democrats in the United States is what do you want to do about that power.

Polling that we've done suggests that the crowd of Democrats pushing to break up the big companies is no more than 25% to 30%. The rest are interested in harnessing that the power. But that group is not as vocal. So the anxiety about tech's power is going to continue.

And then the argument is over how that manifests itself in the individual debates on policy. I think on content moderation, Congress will do nothing. There's no agreement there. Republican states will continue to pass content moderation bills this year, mostly focused on transparency and disclosure. Those bills will probably all be ultimately found unconstitutional. There will be plenty of litigation. Trump is suing Twitter and Facebook.

And in my estimation, all these cases will be found in favor of the platforms. The courts are going to end up affirming the platforms’ own First Amendment rights to set whatever rules they want to. All these Republican lawsuits are actually going to end up strengthening platforms' editorial rights.

On anti-trust, at least here in the United States, the big debate is going to be around these nondiscrimination bills that affect the big tech companies. And as always, you're going to see a lot of company-versus-company industry stuff. For example, you've got Match, Spotify and Epic Games trying to pass bills to hobble Apple and Google on app store rules.

You’ve also got Walmart, Walgreens and other retailers trying to do the same to Amazon on online marketplace rules in a way that also hurts Etsy and eBay. Most of those things I think will end up in a draw, because I believe fundamentally most legislators don't really care that much about picking sides on this.

What we’ll be watching is the Federal Trade Commission, because the Chair, Lina Khan, will probably start a privacy rulemaking there.

One of the other things that we're sort of starting to dabble in is crypto. Crypto has a Democratic problem. Most of crypto's biggest champions in Washington are Republicans, but most of crypto's biggest users are Democrats, so there's a big gap there that we're going to try and remedy.

In my estimation, all these cases will be found in favor of the platforms. The courts are going to end up affirming the platforms’ own First Amendment rights to set whatever rules they want to.

What trends are you seeing on anti-trust, and the efforts for the United States and the European Union to unify around it?
I don't expect much unifying. Here in the United States, there's a package of bills that have been proposed, some of which have passed the committee level at the House of Representatives. One deals with basically banning most acquisitions by big tech.

Another deals with data portability. The one that's most contentious is nondiscrimination, how you shouldn't favor your own products. Our group has been vocal against that. That's being pushed by the smaller downstream companies: Yelp, Spotify, Match and Tile, all of whom have some issue with Amazon, Google, Facebook and Apple.

That one has gotten the most attention. But one of the things you saw in the House is that the moderate Democrats and California Democrats are concerned about it. And our point against it is that if you support nondiscrimination, you're targeting integrated products like Google Maps and Search Results or Amazon Prime and Amazon, and you're denying companies the opportunity to provide an integrated product experience.

And sure, that could hurt another company. The competition always does, but it’s very pro-consumer. All of these things are beloved by consumers. Half the country has an Amazon Prime account.

We generally support marketplaces and the right of marketplaces to set their own rules, even if that's disruptive to a downstream player. For example, take a company like Yelp. Yelp is downstream to Google. And they don't like how Google treats them. But Yelp is upstream to restaurants, and some restaurants don't like how Yelp treats them.

But we also have small companies who we're working on with other issues and who don't care about the anti-trust issues at all. I'm personally of the view that competition issues are where a lot of the action is right now.         

Do you think folks will exhaust themselves on anti-trust and Section 230, and refocus on things like consumer privacy and areas where there are easier wins? 
I do think if Republicans take over the House this year, they will make speech and content moderation issues their primary vector of attack against big tech, less so the anti-trust issues. I’m not sure that politicians can set aside their love of headlines in favor of pragmatic solutions.

Another thing to consider is, about a dozen years ago, there was this summer where all these airplanes got stuck on airport tarmacs for, like, five hours.

And it caused a huge outcry and led Congress to push the FAA to adopt a three-hour tarmac rule. That is an example of a very properly narrowly tailored regulation that has probably 90 percent support. And it worked. They didn't break up the airlines, they didn't tax the airlines. They just did this rule. But it was in response to a crisis of the moment. And I don't know what the tarmac rule of tech regulation is. When it happens, it will have 90% support. But most of the ideas that are debated right now are not that and they don't have 90% support.                

Is it easier to think about these issues with the partisan divide in mind?
I do. I think most politicians do. The difference is your average congressional Democrat has to get elected with both Democratic and Independent votes. Your average congressional Republican can get elected in many cases with purely Republican votes. So your average member of Congress views this stuff differently.

The other thing to consider is that “techlash” in polling is far more acute among Republican voters than among Democratic voters. And I personally believe that's because of Trump and Fox News. The echo chamber effect has made that more acute. But with respect to the actual issues, I don’t see that big a partisan divide in polling.

What you see in the in the polling is, if you ask people, "Do you think tech ought to be more regulated?" or “Do you think tech has too much power?” 70% to 80% of people say yes. Where the polling starts to diverge is, "If this proposal had this effect, would you support it or oppose it?" If you are a company fighting a policy that’s harmful to you, your best argument is to lay out for the consumer the effect it's going to have on the product.

What advice you have for smaller, pre-IPO companies to weather this landscape this year?
The biggest thing is to get fans and followers as quickly as possible. One of the things I found interesting when I was at Lime was that very early on, it started building a database of users for political action.

And it could be something as simple as sending a petition to a city on scooter rules. More and more startups that I interact with are doing this, building their own internal mobilization function as early as possible.

For example, last fall the US infrastructure bill had this crypto taxation provision, and it sparked a massive outcry from crypto users. And it was effective. I don't think that will ever happen again, because now Congress and the administration are a little scared of the crypto people. They’re going to take this tool and turn it into a missile.

Getting those fans and followers as quickly as possible means the moment that your business model gets on the radar of a regulator, you can say, "I've got thousands of people behind me who like my product." And that's powerful.     

The two most interesting issues in tech policy are the problems of big tech and all the scrutiny associated with that, and the challenges of new and emerging tech, which is mostly a market access challenge.

What’s your organization's strategy toward the adversarial approach that regulators and lawmakers have taken regarding big tech? 
We've tried to go deeper on the idea that Democratic voters are not a monolith. It's very easy to look at the coverage of tech policy and say that the Democrats are going after tech. That obscures intra-Democratic differences, both among voters and politicians. This is something we’ve been researching quite a bit.

Our thesis is that Democratic voters in the United States falls into three buckets. The first are “latte liberals.” Latte liberals are the folks who tend to think that tech is victimizing people against their will, new tech is predatory, the big companies are tax dodgers, and it’s all terrible.

Latte liberals are probably no more than a third of the Democratic vote, but they predominate in both journalism and political staffing. Many Democratic staffers for more moderate members are themselves latte liberals.

The second category I call satisfied urbanites and suburbanites. These are people who get Amazon Prime deliveries two or three times a week, and use Instacart, DoorDash, Uber and Lyft. Happy tech consumers who live in cities or inner-ring suburbs.

The biggest challenge here is that this is a pro-tech group, but they're happy and complacent and also busy. They don't have time to show up at a city council meeting. They don't have time to write a letter. They do vote, and were probably the most important swing part of the Biden vote.

But they're silent. One of my pet ideas is I think Biden should have an Office of Suburban Affairs in the White House, because the suburban voters were so important to him.    

The third category, the “dubious dreamers.” These are folks living in places like Fresno and Stockton and the Bronx and Queens. They're not anti-tech—but they're a little wary that it really helps them. About the closest they get today is maybe an Amazon warehouse job or a gig driving job.

And they'd love to see more tech-related jobs and opportunity come their way, but they’re understandably skeptical of overpromising. Part of our thesis is that if we can do a more effective job as a group in organizing and mobilizing the second group and the third group, that can help counteract the cultural power of the first group.                       

When it comes to tech companies in highly regulated areas like telemedicine or automation or crypto, what trends do you think might emerge over the next year?
The two most interesting issues in tech policy are the problems of big tech and all the scrutiny associated with that, and the challenges of new and emerging tech, which is mostly a market access challenge.

We want to do something innovative in health, housing, transportation, education. And it's in a legal gray area, or we have to go city by city or state by state to get approval, and it's really hard.

And what you're really up against is I think two things. One is NIMBY-ism [not in my back yard]. Part of what we're trying to do is kind of challenge what urban progressives really want.

Secondly, the problem of vetocracy. Why would you be the person in the government agency who says yes to new tech when something's inevitably going to go wrong, when it's really easy to be the person to just keep saying no?

I really like working in that space. We call it permission-slip innovation, because if you want regulated innovation in transportation, housing and education, all these things that are in your non-software life, then you have to be pushing cities and states to allow new things. It’s key to be able to tie into some goal they have, whether it's sustainable or affordable housing, or equity.

One of the other things I've noticed is there is a big difference between the company that can launch, and deal with the friction, and the company that can’t launch without permission. I would call it Uber versus a Lime. Uber could launch and then dealt with the friction from launching. That’s a better business model. Drones, autonomous vehicles, scooters, they need permission.         

What is your approach to new members at Chamber of Progress?
Our membership, or partnership, is really in three buckets. One is technology issues, so that's primarily competition, speech, content moderation and privacy.

The second bucket is what I call civic innovation, anything that affects the service that you're going to use in your life in the cities or the suburbs: delivery services, drones, autonomous vehicles. Pushing back on NIMBYism in favor of interesting civic innovation.

The third bucket is financial, so crypto and financial technology in particular. We focus on working with Democrats to show how new tech is improving upon the predatory problems of the past, rather than repeating them, and creating financial opportunity that people haven't historically had access to.

We welcome partner companies who either have a policy or political target on their back or a market access challenge. I have great respect for companies who are not in those two categories. But what I've observed in some of the big trade associations is that companies who aren't in one of those two categories are often the ones urging the association not to stick its neck out for other companies. And that’s not what we want at Chamber of Progress.

--

Susan Lagana is a Partner in the Washington, DC office focused on public affairs and political issues.

Debbie Frost is a Senior Advisor in San Francisco. From 2008 to 2019, she was Vice-President of International and Policy Communications at Facebook and was a member of the executive leadership team.