Is the Tech Industry Ready for an Uptick in Congressional Investigations?

With Democrats controlling the executive branch and the US Senate and Republicans controlling the House of Representatives, there are deep divisions in the US government over issues that affect the technology industry. Consequently, Congress is spending less time legislating and more time investigating. Many of the investigations are aimed at specific companies operating in the technology space, with a recent trend of those companies being called out by name in the title of the congressional hearings. Morgan Lewis lawyers detail some of the trends in congressional inquiries and investigations in the technology industry and the practical considerations for companies faced with responding to Congressional requests.

Congressional Authority

Congressional authority is often questioned when a company or executive is served with a congressional request or subpoena. The answer to the question “Are they allowed to ask for this?” is unequivocally “Yes.” Congress’s power to investigate is implied in Article I of the Constitution, and the Supreme Court has affirmed Congress’s authority to investigate, hold hearings, and demand documents and testimony. Congress’s authority is coextensive with its authority to legislate—to create laws and oversee that the laws are administered effectively and efficiently. Congressional investigations and oversight have been exercised throughout the history of the US government.

It is important to seek out counsel when you receive such an inquiry to ensure that you are fully aware of any legal risks, including those collateral to the congressional investigative process—including criminal, civil, and administrative enforcement.

Trends to Watch in Tech Investigations

• Artificial intelligence is still an evolving technology, so some of the congressional inquiries could be more information gathering than enforcement actions.
• Congress has been discussing how to regulate data privacy, freedom of speech, and general oversight around Big Tech for quite a while and is still split on how consumer privacy will be enforced or protected by legislation.
• There is continued antitrust scrutiny on companies for favoring their own products or requiring outside vendors to use their apps.
• Labor is taking a front seat in many government decisions these days. Congress is taking a harder look at technology companies’ labor practices, especially around union organizing.

Practical Considerations 

How best to cooperate:

• Assess personalities, motivations, and focus of the investigation.
• Get everyone beyond “can they do this” mindset.
• Play the game and be cordial.
• Never underestimate members or their staff.
• Acknowledge inquiry immediately and seek to establish timetable.
• Seek negotiated accommodations/compromises.
• Meetings with staff may help.
• Overt political campaign to derail investigation will not help.

How best to coordinate:

• Ensure all the stakeholders (legal, communications/PR, government relations) are appropriately involved in the response.
• Identify related legal and reputational risks (political/legislative, criminal, civil, and administrative).
• Ensure that all relevant stakeholders are coordinating internal and external messaging.

How best to prepare:

• Develop a proactive response plan now to determine who will respond and how they will coordinate with all relevant stakeholders. It’s important to have a robust internal communications plan to ensure that appropriate individuals know the plan and their roles in it. As part of that plan, develop proactive monitoring of congressional and media outputs.

If you are interested in What to Expect During Congressional Testimony: A Guide for Preparation and Procedure, as part of our Technology Marathon 2023, we invite you to subscribe to Morgan Lewis publications to receive updates on trends, legal developments, and other relevant areas.