Government regulation of business is dominating the headlines these days, with the Department of Justice and dozens of states trying to break up music promoter Live Nation, a blizzard of recent actions seeking to rein in Big Tech players like Apple and Amazon, and of course, the recently signed legislation to force ByteDance to sell TikTok.
Many founders and investors sound like broken records as they grouse about the heavy hand of government regulation. But there are some interesting exceptions.
I recently checked in with a couple of prominent tech investors about the state of affairs, particularly as it relates to TikTok. After writing a series of articles about the hidden ties between TikTok and its Chinese corporate parent, I was curious to hear their takes.
My first stop was Bradley Tusk, who has made a career, and hundreds of millions, from assisting and investing in companies subject to heavy government regulation. His Tusk Ventures’ investments include rideshare giant Uber, sports betting platform FanDuel, and renter’s insurance behemoth Lemonade. He lists companies subject to the most government scrutiny—like Google, Walmart, and AT&T—as clients of Tusk Strategies. He even almost opened his own casino. And yet, Tusk, while acknowledging the seeming hypocrisy, says he is supportive of the TikTok ban.
“You have a situation where our biggest competitor [China] controls a piece of propaganda that’s in every single kid’s pocket,” says Tusk. “It’s just so overwhelmingly logical to get rid of it that it transcends parties and special interests and ideology and everything else.”
That said, Tusk believes that all social platforms are detrimental to children’s mental health and that Section 230 should be repealed. If tech companies weren’t shielded from liability by Section 230, Tusk argues, “the financial incentives would change and that would lead to better content moderation.”
David Ulevitch, a general partner at Andreessen Horowitz who co-leads the firm’s $600 million defense tech American Dynamism program, feels the same as Tusk when it comes to TikTok. “When we have a situation where so many Americans are being influenced by an adversary of the United States, a ban makes a lot of sense,” he told Fortune.
Ulevitch, who led a16z’s Series B investment in defense giant Anduril, thinks the negative mental health repercussions that stem from social media use may be beneficial to countries like China and Russia. “If you can make an entire population of people feel really depressed or feel really bad about themselves, that has consequences—that may be an objective of a foreign adversary.”
With an election approaching, the comments show how investor attitudes towards regulation and tech policy aren’t as clear cut as they might once have seemed.
What about regulation outside of tech? I asked Tusk, who recently wrote a book called Vote With Your Phone: Why Mobile Voting Is Our Final Shot at Saving Democracy, about the LiveNation lawsuit. “Absolutely the right move,” he said. “When you have a company that has so much market dominance and is so hated universally by consumers, it’s definitely the right move,” Tusk wrote in a text.
He followed up moments later to note that he has equity in LiveNation rival StubHub. “But I’d have the same view here either way,” he added.
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Alexandra Sternlicht
Twitter: @iamsternlicht
Email: alexandra.sternlicht@fortune.com
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