This article was originally published in Forbes.
The American public recently learned that Silicon Valley needs to work with the government more effectively in order to protect the privacy of the consumer. At a recent event, “MONage, The Future of Communications”, Glenn S. Richards, Partner, Pillsbury Winthrop Shaw Pittman LLP, explained the overall importance of government regulations for the consumer and shared how the technology community can become more compliant. This is a summary of that presentation.
Why Are Regulations Important?
Innovators may outpace or even ignore regulators, but eventually, the government will find you, said Richards. Rather than wait, he suggests that firms proactively review the regulatory landscape that impacts their products and services and then design offerings with this in mind. Although innovators typically resist regulation, he described four compelling reasons that regulations exist:
Consumer protection. Whether it’s physical safety, such as autonomous vehicles, or privacy, consumer protection is important to regulators. There are now increasingly serious conversations about protecting the privacy of the consumer on social media. These concerns may result in pressures to move towards a more European privacy model of opting in or out. It’s important that firms capturing data gain consent from customers. Firms should also carefully consider how data is captured, stored, and accessed.
Public safety. In the post-9/11 world, the government wants to understand how technologies work, and how they can be used to find, and stop, persons that want to do harm to our country.
Level playing field. When disruptive technology enters the marketplace, the incumbents will naturally say “Whoa, all our regulations need to apply to these new guys too” said Richards. A natural question is why home sharing and ride sharing companies aren’t regulated in the same way as hotels and taxis. Although disrupters typically initially take the position that rules don’t apply to them, over time, they eventually submit to regulation.
Taxes. Governments always seek to tax revenues and broaden their tax base. When your products generate revenue, the government will took for its percentage. Even if it doesn’t initially know how to categorize what you are offering, they will eventually figure it out, said Richards.
7 Ways Technology Firms Can Become More Compliant
Given the importance of regulations, how should the technology industry proceed? Richards shared some advice about staying on the right side of the government and regulations when it comes to social media and other new technology:
- Look at the current regulatory landscape to understand the requirements. If none exist because your technology is unique, try to find similar technologies or services and determine how they are regulated.
- Design your product to meet the needs of people with disabilities. The government (particularly, the Federal Communications Commission (FCC)), is clear that newly developed technology must be able to be used by persons with physical disabilities.
- Be good corporate citizens. Make proper disclosures about what your services can and can’t do. Disclosures should be clear, conspicuous, and true. Disclosures will enhance your relationships with regulators and help you to avoid or mitigate lawsuits.
- Join trade associations. Trade associations will help your firm stay up to date on rules and regulations and important legislation that that may impact your industry. Many association are attempting to establish standards and best practices that may keep regulators at bay when the industry acts responsibly.
- Educate lawmakers and establish relationships to take away the fear of the unknown. Introduce your services and technology to regulators. Describe how you are creating jobs and creating economic value. Visit Washington, but also invite the local, state and federal legislators and regulators to your facilities. You will gain the regulators’ cooperation when they feel part of your community.
- Make campaign contributions to gain access to politicians to mitigate legislation that may hinder your operations.
- Not surprisingly, Richards’ final bit of advice is this: Hire a good law firm.
Good advice for us all.