2024 Election - Implications on Technology

A Harris administration is expected to support robust AI regulation aimed at minimizing bias and enhancing consumer protection. This approach would attempt to ensure that AI systems are developed and deployed in a fair and ethical manner, fostering trust and reliability in AI technologies. Continuing the Biden administration’s focus on data privacy and AI governance in healthcare, a Harris administration would likely implement more stringent oversight of how patient data is used. New regulations governing AI tools that interact with patient records would be introduced, ensuring compliance with HIPAA and enhancing patient data protection.

Under Harris, there would also likely be a broader expansion of federal cybersecurity standards, particularly targeting critical infrastructure, supply chains and consumer protection. Companies would be required to follow stricter reporting and security protocols to enhance overall cybersecurity resilience, reducing vulnerabilities to cyber threats.

Meanwhile, Trump has not explicitly addressed the regulation of AI-driven consumer technologies such as facial recognition, biometrics and tracking technologies. However, these technologies might face less federal scrutiny under his administration, potentially allowing for faster technological growth in sectors like retail and advertising. Trump is expected to support AI regulation that focuses on high-risk sectors, aiming to mitigate risks associated with AI while allowing for innovation and development in less-critical areas.

Additionally, Trump may advocate for a narrower construction of what constitutes patient or health data under HIPAA, enabling broader applications of AI in medical decision-making tools and fostering innovation in healthcare technology. Under Trump, cyber defense policies might shift focus from consumer protection to industry self-regulation, benefiting tech companies developing AI-based cybersecurity tools by reducing regulatory burdens and encouraging innovation in cybersecurity solutions.

The Patent Eligibility Restoration Act (PERA) aims to clarify what constitutes patentable subject matter, while the Promoting and Respecting Economically Vital American Innovation Leadership Act (PREVAIL) seeks to modify Inter-Partes Review (IPR) proceedings within the United States Patent and Trademark Office (PTO). Both are bipartisan initiatives designed to fortify U.S. patent rights amidst ongoing challenges and may find renewed support in a second Trump administration, although Trump has not explicitly endorsed them. Conversely, the Biden-Harris administration has not aggressively promoted these acts, and their future under Harris remains uncertain.

Drawing from the tenure of Director Andrei Iancu, President Trump's previous appointee, a new Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO) is likely to advocate for streamlined examination rules that favor inventors, aiming to reduce IPRs and PTO re-examinations of patents to promote innovation.

Under a Harris administration however, Kathi Vidal or a similar appointee is likely to continue as Under Secretary of Commerce for Intellectual Property and Director of the USPTO. Director Vidal’s tenure suggests a continued focus on PTO review and re-examination of patents to increase quality and substantive Director review of decisions and rulemaking to enhance the robustness and reliability of the U.S. patent system

Additionally, Harris has promised to work to raise the federal minimum wage, potentially increasing operating expenses for companies and possibly resulting in job losses. She supports paid leave and increasing the child tax credit, though implementation details remain unclear.

Harris has not directly commented on the FTC’s proposed rule banning noncompete agreements, but the rule was proposed under the Biden-Harris administration. If enacted, it would prohibit noncompetition agreements with employees, with limited exceptions, and invalidate existing agreements for most employees.

Trump has also not taken a stance on the FTC’s rule banning noncompetition agreements. However, based on his actions during his prior term, Trump may appoint commissioners to the FTC who would be more likely to rescind the rule or instruct government lawyers not to defend it in court. If the FTC’s ban on noncompete agreements, which is currently enjoined while legal challenges are decided, were to go into effect in the future, employers would be prohibited from entering into noncompetition agreements with employees (with limited exceptions), and the ban would invalidate existing agreements with most employees Both Trump and Harris have called for eliminating taxes on tips, potentially reducing federal revenues by more than US$1 trillion over the next decade, but increasing take-home pay for workers in tip-reliant industries. In response, employers could reclassify wages as tips in certain circumstances, further increasing the federal deficit. In 2019, Trump signed the Federal Employee Paid Leave Act (FEPLA) providing twelve weeks of paid parental leave to qualifying federal employees. The Trump campaign has not indicated whether Trump would work to expand this policy direction by supporting paid leave for non-public employees.

Harris proposes increasing the corporate tax rate from 21 percent to 28 percent, impacting corporate businesses and enhancing the value of deductions, credits and tax planning strategies. She supports taxing carried interest as ordinary income for high earners, increasing tax costs and potentially phasing out management fee waivers. Harris also proposes increasing the capital gains tax rate from 20 percent to 28 percent for high-income households, potentially creating buying opportunities in a "rush to exit" scenario.

Additionally, she proposes limiting 1031 like-kind exchanges to US$500,000 in gains and providing a US$25,000 tax credit for first-time homebuyers, spread over four years, aiming to increase the affordability of certain homes and potentially stimulating the housing market.

Conversely, if re-elected, Trump would seek to reduce corporate tax rates from 21 percent to 20 percent. In addition, companies that manufacture their products in the United States would be eligible for a special 15 percent corporate rate, reducing business taxation and incentivizing onshoring or U.S. investment.

If elected Trump will likely aim to permanently extend the tax cuts introduced by the 2017 Tax Cuts and Jobs Act, fostering a more favorable economic environment for corporate growth. The Trump campaign has called for imposing higher tariffs, including tariffs of 10 – 20 percent on all U.S. imports and 60 percent on imports from China. These changes could create supply chain issues for many companies, though there is debate as to what extent the executive branch can unilaterally implement tariffs without congressional action.

Regardless of who is elected, we are unlikely to see a return to the traditional antitrust principles that largely describe antitrust enforcement from 1980 through 2016. Although reduced regulatory overreach based on unprecedented theories would provide more regulatory certainty regarding whether transactions are likely to obtain antitrust clearance, distrust of big business on both sides of the political aisle likely will continue to make the regulatory landscape less predictable for businesses.

Under Trump, the departure of Lina Khan as FTC Chair would be likely. While at first blush this would suggest a more business-friendly environment, antitrust enforcement will remain a powerful tool that could be used to scrutinize corporate initiatives some Republicans view as overreach, such as ESG and political censorship. However, an increase in negotiated settlements, which have largely disappeared under the current administration, would result in fewer lawsuits, reducing the length and cost of legal battles and promoting a return to reasonable remedies that efficiently balance the interests of the government, private companies and consumers. Harris on the other hand has not commented on the potential departure of Lina Khan as FTC Chair.

Harris has, however, indicated support for continued scrutiny in the healthcare and life sciences sectors, likely resulting in more investigations and litigations, possibly under novel antitrust theories. While this could create additional burdens on healthcare and life sciences companies, these novel theories so far have not gained much traction in courts for parties that are willing to fight it out.

Finally, a second Trump administration likely will continue to scrutinize conduct practices by Big Tech. Although the 2024 decision finding that Google illegally maintained its monopoly in general search came during the Biden administration, that lawsuit was filed in 2020 by the Trump administration. Thus, it is possible that ongoing lawsuits the Biden administration has filed against Amazon and others will continue.

A Trump administration is expected to continue a business-friendly regulatory environment, focusing on reducing federal oversight and encouraging innovation in the technology sector. However, potential changes in tax policies, labor laws and trade tariffs may pose challenges.

A Harris administration is expected to continue robust regulatory activity and support for AI regulation, data privacy and cybersecurity, fostering trust and reliability in technology. However, increased regulatory scrutiny, potential tax changes and new labor policies may pose challenges for the technology sector. Strategic planning and comprehensive due diligence would be essential for navigating these changes effectively.