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As leading technology companies have grown exponentially over the last decade, so too have concerns about their outsized impact on our economy and democracy. How to regulate these firms has emerged as a key policy question of our time. 

Racial equity is not yet a significant part of the mainstream tech policy debate. This needs to change. How we set the rules for these companies will have significant consequences throughout society, particularly for low-income communities and communities of color. As we consider policy choices, we must ask: Will these new technology policies serve to erase racial inequities and set us on a course of inclusive prosperity? Or, will they serve to deepen existing inequities?

This report makes the case for centering racial equity in the technology policy debate and presents a policy agenda for doing so. Through original research commissioned from academic experts in the field, a literature review, a policy landscape analysis, and interviews with subject-matter experts, we examined the business model underlying the largest technology firms and its impacts on people and communities of color. We found that the interlocking components of its business model exacerbate racial inequities in access to quality jobs and business opportunities, information, goods and services, and in democratic participation. This report charts a policy path toward a tech sector and economy organized around equity: just and fair inclusion in a society in which all can participate, prosper, and reach their full potential, including the nearly 100 million people in the US living in or near poverty.

Defining the Business Model

Through our research, we found that five key components define the business models and drive the profit strategies of the largest technology companies: data-driven services and computational infrastructure, advertising, market dominance, regulatory influence, and invisible labor. The combination of these five components sets large tech firms apart and allows them to continuously consolidate power, which leads to the replication and amplification of existing racial inequities.

Racial Equity Implications 

In a society riddled by individual, institutional, and structural racism, these business model elements—separately and combined—exacerbate and widen existing racial disparities in access to mobility-boosting opportunities as well as exposure to harms. Four key dimensions of racial equity are impacted:

  • Democratic participation. Large tech companies’ business model depends on collecting user data to generate advertising revenue, which allows advertisers to target demographic groups. This in turn enables targeted mis- and disinformation that spreads virally and impedes access to democratic processes for communities of color, as seen in the 2016 and 2020 US presidential elections.
  • Worker power, worker voice, and access to good jobs. As an indirect result of large tech companies’ labor practices, workers of color are pushed into lower-paid tech jobs, which leaves them subject to round-the-clock surveillance, poor working conditions, and an unstable labor market.
  • Equitable access to goods, services, and information. The computational infrastructure, data-driven services, and advertising components of the dominant tech firms’ business model leads to the exclusion of communities of color from digital goods and service provision as well as racial targeting in disinformation campaigns.
  • Ownership and entrepreneurship. Dominant tech companies control the computational infrastructure and data-driven services that power digital marketplaces and can prioritize their own products and services as well as those of businesses that can afford steep advertising costs —all to the disadvantage of small businesses and entrepreneurs of color. 

New Rules for a New Economy 

Immediate policy action is needed to address the structural drivers that enable the largest technology companies to conduct business practices that disproportionately harm communities of color and amplify racial inequities in America. We call on the US Congress, the Executive Branch, and independent federal agencies to advance the following five policy priorities:

Center racial equity in all technology regulatory efforts. Current tech regulatory efforts remain race-blind, which allows the tech sector to continue to perpetuate racial equity harms. To advance a society in which all people can flourish, all technology policy and regulatory efforts must proactively prioritize racial equity.

Promote democratic governance of technology. The most dominant tech firms in our economy currently limit the economic and political decision-making power of people of color and low-income workers. To achieve a just and fair society, federal, state, and local governments must set policy that ensures the use of technology by government entities promotes equitable outcomes and does not impede democratic governance.  

Build an equitable tech labor market. All workers, including gig, contract, and temporary workers who make up a large segment of the tech sector’s invisible labor force, need strong labor protections. In an equitable tech labor market, all tech workers would be able to access high-quality jobs that provide family-sustaining wages and benefits, career advancement and skill development pathways, collective bargaining rights, protection from harassment and discrimination, and safeguards against surveillance and data extraction.

Ensure equitable access to goods, services, and information. The profit strategies that power the tech business model often impede access to goods, services, and information for people of color. Policy interventions should eliminate harm to marginalized communities, evaluate the benefits and risks of public utility classification of information platforms, ensure that data privacy protections are treated as a civil rights issue, and prioritize environmental protections for vulnerable communities from the impacts of computational infrastructure.

Eliminate disparities in ownership and entrepreneurship. Large tech firms neutralize the threat of competition through strategies that either absorb smaller businesses or eliminate their market viability. Without policies that target monopoly power and support competition, this foundational aspect of the underlying business model will continue to exacerbate the racial wealth gap. Policymakers must also proactively remove barriers and provide investments that increase racial equity and inclusion in the tech sector. 

A regulatory agenda that centers racial equity will build not only a more equitable tech sector but also a more equitable economy in which everyone has access to the resources they need to thrive. While exclusion and racialized harms cost our society and economy, inclusion and equity bring cascading benefits for all. 

Original Research Informing This Report

This report was informed by a series of research papers commissioned from academics and researchers working at the intersection of racial equity and the technology sector. 

  1. Cierra Robson and Ruha Benjamin (Princeton University), “Silence No More: Addressing Anti-Competitive Opportunity Hoarding in the Tech Industry.” 

Workplace discrimination stifles opportunities for Black and Indigenous communities and people of color with talent and competitiveness within the tech industry. Current laws against well-known anticompetitive practices that only protect against de jure racism are not enough to ensure racial equity.

  1. Fallon Wilson (#BlackTechFutures Research Institute), “Supporting Black Businesses Online with Federal Policies and Recommendations.”

Black-owned businesses face structural barriers to success in the tech sector. Policies to close the digital divide, facilitate support for Black businesses in new tech environments, and pass antimonopoly legislation are crucial to ensure racial equity in tech entrepreneurship. 

  1. Jasmine McNealy (University of Florida), “A Power Analysis of Platforms: Expression, Equitable Governance, and Participation.”

Our current regulatory framework is not fit for the tech sector. The relatively small number of platforms we have to communicate with each other online hold a lot of power. Therefore, we conducted a power analysis that looks at who the key players are in this space, their relationships with each other, and the impacts of those relationships.

  1. Amina Kirk and Mae Watson Grote (Change Machine), “Data: Power or Pawn? Advancing Equity by Reimagining the Consumer-Data Relationship.”

Financial technology (“fintech”) is used to exploit the power imbalances between users and institutions that collect data. Big Tech is a growing player in this arena and is exacerbating the sector’s power imbalances in ways that harm people of color who navigate financial insecurity.

  1. Nicol Turner Lee (Brookings Institution), “It’s Time for an Updated Civil Rights Regime Over Big Tech.”

Racism is at the center of the technologies that govern our private and public lives. We need an updated civil rights regime to address the multitude of racial inequities perpetuated by Big Tech as current civil rights laws are not fully equipped to adequately regulate this sector. 

  1. Sarah Myers West (AI Now Institute), “Antitrust, Labor, and Racial Equity: Analysis of 2021 Congressional Antitrust Reforms.” 

Currently proposed anti monopoly legislation is poised to improve conditions for tech industry workers, particularly tech workers of color. These bills can be strategically leveraged to promote the needs of low-wage tech workers and improve their labor conditions and pay by reducing Big Tech’s market power. 

  1. Shelly Steward (The Aspen Institute), “How Platform-Based Work Contributes to the Racial Wealth Gap.”

Platforms, many of which are owned and controlled by Big Tech, weaken the position of workers, particularly workers of color, by making them more disposable and invisible to their employers. Meanwhile, the employer remains shielded from responsibility. We need a range of labor reforms, including ending worker misclassification, establishing public portable benefits, and regulating data extraction.

  1. Ulises Ali Mejias (State University of New York at Oswego), “The People vs. the Algorithmic State: How Government Is Aiding Big Tech’s Extractivist Agenda, and What We Can Do About It.”

The government’s use of algorithmic decision-making—and its failure to regulate others’ use of these technologies—is undermining democratic governance and increasing inequality and racism.

  1. Veena Dubal (University of California, Irvine), “Technology, Fissuring, and Race.”  

Big Tech hires workers through third-party platforms, temporary arrangements, and other classification schemes to shed risk, responsibility, and labor overhead. These workers, who are disproportionately people of color, make less money than direct employees and are generally treated as “second-class” citizens. We must look at how low-wage tech workers are organizing under these conditions for a path forward.