TikTok, Essential Infrastructure, and Imperial Regulation by Golden Share

As Microsoft considers acquiring TikTok’s American operations, President Trump has asked that the Federal Treasury should own a significant share. This move is entirely consistent with this administration’s technology regulation principles, which sees profitable telecommunications and digital services companies as both a cybersecurity attack surface and a prized form of capital that must be “American owned”. Surprising, perhaps, is the idea of partial government ownership. However, this idea has been floated recently by a number of scholars and think tanks. Something like Treasury ownership of company shares could set up institutions that serve not just American economic, but also civic interests.

Jake Goldenfein and I have recently published a piece in Phenomenal World, Essential Infrastructures“. It takes as its cue the recent shift of many “in person” activities onto Zoom during COVID-19 lockdowns to review the prevailing regulatory regimes governing telecommunications infrastructure and digital services. We trace the history of Obama-era net neutrality, grounded in an idea of the Internet as a public utility or essential facility. We then show how in the Trump administration, a new regime based on national and economic security directed Federal policy. We then go into some policy recommendations moving forward.

A significant turning point during the Trump administration has been the shift away from the emphasis on domestic and foreign provision of open Internet in order to provide a competitive market for digital services, and towards the idea that telecom infrastructure and digital services are powerful behemoths that, as critical infrastructure, are vulnerable attack surfaces of the nation but also perhaps the primary form of wealth and source of rents. As any analysis of the stock market, especially since the COVID-19 lockdowns, would tell you, Big Tech has been carrrying the U.S. stock market while other businesses crumble. These new developments continue the trend of the past several years of corporate concentration, and show some of the prescience of the lately hyperactive CFIUS regulatory group, preventing foreign investment in these “critical infrastructure”. This is a defense of American information from foreign investors; it is also a defense of American wealth from competition over otherwise publicly traded assets.

Under the current conditions of markets and corporate structure, which Jake and I analyze in our other recent academic paper, we have to stop looking at “AI” and “data science” as technologies and start looking at them as forms of capital. That is how CFIUS is looking at them. That is how their investors and owners look at them. Many of the well-intentioned debates about “AI ethics” and “technology politics” are eager to keep the conversation in more academically accessible and perhaps less cynical terms. By doing so, they miss the point.

In the “Essential Infrastructures” article, we are struggling with this confluence of the moral/political and the economic. Jake and I are both very influenced by Helen Nissenbaum, who would be quick to point out that when social activities that normally depend on the information affordances of in-person communication go on-line, there is ample reason to suspect that norms will be violated and that the social fabric will undergo an uncomfortable transformation. We draw attention to some of the most personal aspects of life–dating/intimacy, family, religion, and more broadly civil society–which have not depended as much on private capital as infrastructure as they do now. Of course, this is all relative and society has been trending this way for a long time. But COVID lockdowns have brought this condition to a new extreme.

There will be those that argue that there is nothing alarming about every aspect of human life being dependent on private capital infrastructure designed to extract value from them for their corporate owners. Some may find this inevitable, tolerable, even desirable. We wonder who would make a sincere, full-throated defense of this future world. We take a different view. We take as an assumption that the market is one sphere among many and that maintenance of the autonomy of some of the more personal spheres is of moral importance.

Given (because we see no other way about it) that these infrastructures are a form of capital, how can the autonomy of the spheres that depend on them be preserved? In our article, our proposal is that the democratic state provides additional oversight and control over this capital. Recognizing that the state is always an imperfect representative of individuals in their personal domains, it is better than nothing.

We propose that states can engage with infrastructure-as-capital directly as owners and investors, just as other actors interact with it. This proposal accords with other similar proposals for how states might innovate in their creation and maintenance of sovereign wealth since COVID. The editorial for our piece was thorough. Since we drafted it, we have found others who have articulated the logic of the general value of this approach better than we have.

The Berggruen Institute’s Gilman and Feygin (20202) have been active this year in publishing new policy research that is consistent with what we’re proposing. Their proposals for a “mutualist economy” wherein a “national endowment” is built from public investment in technology and intellectual property, which is then either distributed to citizens as Universal Basic Capital or used as a source of wealth by the state, is cool. The Berggruen Institute’s Noema magazine has published the thoughts of Ray Dalio and Joseph Stiglitz about using this approach for corporate bailouts in response to COVID.

These are all good ideas. Our proposal differs only slightly. If national endowment is built from shares in companies that are bailed out during COVID, then the national endowment is unlikely to include those successful FANG companies that are so successfully disrupting and eating the lunch of the companies that are getting bailed out. It would be too bad if the national endowment included only those companies that are failing, while the tech giants on which civil society and state are increasingly dependent attract all the real value to be had.

In our article, we are really proposing that governments–whether federal, state, or even municipal–get themselves a piece of Amazon, Google, and Verizon. The point here is not simply to get more of the profit generated by these firms into democratic coffers. Rather, the point is to shift the balance of power. Our proposal is perhaps more aligned with Hockett and Omarova’s (2017) proposal for a National Investment Authority, and more specifically Omarova’s proposal of a “golden share approach” (2016). Recall that much of the recent activity of CFIUS has been motivated by the understanding that significant shareholders in a private corporation have rights to access information within it. This is why blocking foreign investment in companies has been motivated under a “cybersecurity” rationale. If a foreign owner of, say, Grinder, could extract compromising information from the company in order to blackmail U.S. military personnel, then it could be more difficult to enforce the illegality of that move.

In the United States, there is a legal gap in the regulation of technology companies domestically given their power over personal and civic life. In a different article (2020, June), we argued that technology law and ethics needs to deal with technology as a corporation, rather than a network or assemblage of artifacts and individuals. This is difficult, as these corporations are powerful, directed by shareholders to whom they have a fiduciary duty to maximize profits, and very secretive about their operations. “Sovereign investment”–or, barring that, something similar on a state or local level–would give governments a legal way to review the goings-on in companies that it has a share in. This information access alone could enable further civic oversight and regulatory moves by the government.

When we wrote our article, we did not imagine that soon after it was published the Trump administration would recommend a similar policy for the acquisition of foreign-owned companies that it is threatening to boot off the continent. However, this is one way to get leverage on the problem of how the government can acquire, at low cost, something that is already profitable.

This will likely scare foreign-owned technology companies off of doing business in the U.S. And a U.S.-owned company is likely to fall afoul of other national markets. However, since the Snowden revelations, U.S. companies have been seen, overseas, as extensions of the U.S. state. Schrems II solidifies that view in Europe. Technology markets are already global power-led spheres of influence.


Benthall, S., & Goldenfein, J. (2020, June). Data Science and the Decline of Liberal Law and Ethics. In Ethics of Data Science Conference-Sydney.

Gilman, N. and Feygin, Y. (April, 2020), “The Mutualist Economy: A New Deal for Ownership” Whitepaper. Berggruen Institute.

Gilman, N. and Feygin, Y. (June, 2020) “Building Blocks of a National Endowment” Whitepaper. Berggruen Institute.

Hockett, R. C., & Omarova, S. T. (2017). Private Wealth and Public Goods: A Case for a National Investment Authority. J. Corp. L.43, 437.

Nissenbaum, H. (2009). Privacy in context: Technology, policy, and the integrity of social life. Stanford University Press.

Omarova, S. T. (2016). Bank Governance and Systemic Stability: The Golden Share Approach. Ala. L. Rev.68, 1029.