In opening statement at hearing on AI and Data Privacy, Cruz calls for balance of privacy and innovation

WASHINGTON, D.C. – In his opening statement at today’s Senate Commerce Committee hearing titled “The Need to Protect Americans’ Privacy and the AI Accelerant,” Ranking Member Ted Cruz (R-Texas) highlighted how the Biden administration’s executive actions on artificial intelligence (AI) and many proposals in Congress would impose a system that punishes American innovation and burdens entrepreneurs with stifling regulations. Sen. Cruz also discussed the need to target any AI-related problems with specific solutions, like his recently introduced bipartisan TAKE IT DOWN Act, which would address the scourge of revenge and AI-generated deepfake pornography. Lastly, Sen. Cruz called for Congress to consider a uniform data privacy standard that balances both privacy and innovation, rather than legislation that would benefit large businesses and trial lawyers at the expense of entrepreneurs.

Here are Sen. Cruz’s remarks as prepared for delivery:

“American prosperity depends on entrepreneurs. These are ambitious—and optimistic—men and women who are willing to take risks, pursue their dreams, and try and change the world. They mortgage their own homes and put everything on the line to build a business that fills an unmet need or does something better than what’s offered today.

“But throughout history, prosperity and human flourishing has been stymied or delayed by governments that imposed regulatory policies to address supposed ‘harms’ but in actuality overstated risk in order to protect incumbent operators, often large and powerful companies that didn’t want to compete.

“The United States has mostly chosen a different path — one where a free enterprise system, governed by the rule of law, allows Americans to freely pursue their ideas, grow their own businesses, and compete without having to obtain permission from all-knowing bureaucrats.

“Today’s hearing on data privacy and artificial intelligence (AI) is a debate about which regulatory path we will take.

“Do we embrace our proven history —one with entrepreneurial freedom and technological innovation. Or will we adopt the European model — where government technocrats get to second-guess and manage perceived risks with economic activity, ultimately creating an environment where only Big Tech with its armies of lawyers and lobbyists exist?

“Consider this. In 1993, at the dawn of the tech age, the economies of the United States and European Union were roughly equal in size. Today, our economy is nearly 50 percent larger than the EU’s.

“The tech boom happened in America in part because Congress and the Clinton administration deliberately took a hands-off approach to the nascent internet. The results were millions of jobs and a much higher standard of living.

“Unfortunately, the Biden administration and many of my colleagues are suggesting the EU model for AI, based heavily on hysterical, doomsday prophecies to justify a command-and-control federal regulatory scheme that will cause the U.S. to lose our technological edge over China.

“The Biden administration’s AI executive actions, as well as many of the AI legislative proposals, call for a new regulatory order that protects incumbent operators and discourages innovation with supposedly-optional ‘best practices’ or ‘guidance’ written by all-knowing bureaucrats – some of whom were recently employed by the same Big Tech firms they seek to regulate.

“We already see federal AI regulators and Biden allies talking about the need to stop ‘bias,’ ‘misinformation,’ or ‘discrimination’ in AI systems and algorithms. That’s code for ‘speech police.’

“Now, AI can be used for nefarious purposes just like other technologies. But to address specific harms or issues, we should craft appropriate and targeted responses.

“For example, Senator Klobuchar and I have introduced the bipartisan Take It Down Act, which targets bad actors who use AI to create and publish fake, lifelike pornographic images of real people. Our bill, which is sponsored by many Republican and Democrat members of this committee, would also require Big Tech to follow a notice-and-takedown process so ordinary Americans who are victimized by these disturbing images can get them offline immediately.

“The bipartisan Take It Down Act is a tailored solution to a real problem. On behalf of the teenage girls and others who’ve been victimized by deepfake explicit imagery, I hope this committee will soon take up the Take It Down Act.

“As I conclude, I’d like to address a related matter - the American Privacy Rights Act (APRA).

“I support Congress – not the FTC or any federal agency – setting a nationwide data privacy standard.

“Not only is it good for Americans to be empowered with privacy protections, but it’s good for American businesses that desperately need legal certainty give the increasingly complex patchwork of state laws.

“But our goal shouldn’t be to pass any uniform data privacy standard but the right standard that protects privacy without preventing U.S. technological innovation.

“I’ve discussed APRA with Chairwoman McMorris Rodgers and will continue my offer to work with her, but right now, APRA is not the solution. It delegates far too much power to unelected commissioners at the FTC.

“Its focus on algorithmic regulations under the guise of civil rights would directly empower the DEI ‘speech police’ efforts underway at the Biden White House, harming the free speech rights of all Americans.

“As currently constructed, APRA is more about federal regulatory control of the internet than personal privacy. And in the end, it’s the large companies with vast resources that ultimately benefit from bills like APRA at the expense of small businesses.

“I’m particularly concerned by APRA’s peculiar data minimization provisions, its sweeping ban on targeted advertising, its uneven preemption standard, and its private right of action — which I would note no red or blue state has enacted because it inevitably unleashes trial lawyers to engage in frivolous sue-and-settle lawsuits.

“We should pass a uniform data privacy standard, but we ought to consider a standard that starts with the data privacy work in the states — like Texas — that have carefully deliberated and debated the balance between privacy and innovation. Texas succeeded because it focused on Texans’ privacy — not regulating the entirety of the internet.

“It put Texans in control of the privacy over their data and gave them the transparency they need to make decisions in the marketplace. It also protects small businesses and innovation without sweeping and burdensome regulations or the empowerment of trial lawyers.

“That is the path Congress needs to take and is the path that I intend to pursue.

“I look forward to today’s discussion.”

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