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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.