New Technology Requires New Regulatory Ambitions

In the face of new technologies, a nonprofit auto safety body provides an institutional model for elevating public protection ambitions.

Federal bumper standards. Federal rules to reduce gas leaks and fires in rear crashes. State laws setting the drinking age at 21. And local laws banning right turns on red lights at certain intersections. Each of these important regulatory actions came about, in part, because of the Insurance Institute for Highway Safety (IIHS).

Formed in the late 1950s, the nonprofit IIHS has helped steer the conversation about traffic safety from crash avoidance to crash survival. This U-turn in perspective placed less responsibility for traffic safety on drivers and more on automakers.

Since then, IIHS has continued to raise regulatory ambitions for auto safety by setting forth empirically supported, incremental, and impactful policies. By way of example, the nonprofit’s advocacy for safer automobile designs preceded and bolstered calls for the creation of the National Highway Traffic Safety Administration (NHTSA), the government agency dedicated to vehicle safety.

Today, to overcome the risks posed by emerging technologies such as artificial intelligence (AI), quantum computing, and geoengineering, a similarly ambitious and influential organization is needed. IIHS’s regulatory approach offers a roadmap for how best to structure such an organization as well as for how to determine which regulatory tasks such an organization should take on.

How did IIHS impact the proliferation of car and road safety features? Extensive and elaborate crash testing done by IIHS has, for decades, alerted the public to the dangers of certain automobile designs. In turn, IIHS changed industry adoption of safety measures from a burden to a competitive advantage.

This dynamic—consumers informed by IIHS testing, standards, and rankings who then demand safer cars—has saved lives that would have been lost if it were only the federal government holding automakers accountable. In fact, federal regulators now rely on this dynamic, waiting to issue rules and guidance until the diffusion of a specific safety measure has been assured as a result of market pressure.

The risks posed by emerging technologies now require the creation of a data-driven, publicly trusted, and ambitious entity akin to the IIHS. I will call it the emerging risk regulator (ERR).

Just as IIHS subjects automobiles to a litany of rigorous and evolving tests, an ERR would require any entity involved in the commercialization of a technology that is deemed to pose an emerging risk to undergo a battery of exams. Just as IIHS shares the results of its tests publicly and in formats that alter consumer behavior, an ERR would provide the public with actionable information to avoid the purchase and use of products that present undue, unmitigated, and unknown risks. Finally, just as IIHS continuously updates its tests to challenge automakers to improve existing safety features and develop new features, an ERR would find innovative ways to probe the vulnerabilities of products and encourage entities to adopt safety measures.

The success of IIHS in causing automakers to change their designs even in the absence of a legal obligation deserves more attention from groups focused on regulating emerging technologies. Some researchers in the area of emerging technologies support the creation of new laws and regulations, and even new agencies, to address the associated risks. A version of an ERR, however, could come into effect sooner and alter consumer behavior in a more immediate and drastic way than a new agency could.

A new agency may once have been an effective tool to confront these risks. At one time, according to legal scholars Jerry L. Mashaw and David Harfst, the legal culture—characterized then by high regulatory ambition and few legal constraints—facilitated the adoption of “broadly applicable, forward-looking safety standards.” This earlier culture empowered administrative entities, such as NHTSA, to issue rules that “pushed the industry into uncomfortable territory.”

In other words, during this earlier period, agencies had the legal, regulatory, and social license to issue ambitious regulations that anticipated risks and identified aspirational goals for regulatory entities, even on relatively nascent or expanding industries that threatened public safety and well-being.

Since then, however, each branch of government has imposed legal constraints on the capacity of the administrative state to issue proactive and aspirational regulations.

Courts have adopted new constitutional and statutory interpretations that serve to reduce agency discretion. Successive administrations, to varying degrees, have subjected agency action to greater White House scrutiny. And a sizable group in Congress has demonstrated a willingness to exert greater control over agencies and the federal rulemaking process.

These actions indicate that the contemporary legal culture has squashed regulatory ambition by imposing ever more legal constraints.

Only a narrow kind of regulation can emerge in this culture. Case-by-case and retrospective regulation has become the norm—a norm justified, in part, by the theory that agencies can more easily implement and enforce such regulations, while deterring bad behavior through the punishment of single actors.

Yet emerging technologies—such as AI, quantum computing, and geoengineering—pose risks of greater magnitude, likelihood, and irreversibility. In light of these risks, the public interest demands a return to anticipatory and aspirational regulation.

Realigning the legal culture to advance the public interest requires that regulatory ambitions be raised and legal constraints be lowered—or at least prevented from intervening further into the authority and discretion of the administrative state.

And in the short run, advocates should prioritize raising regulatory ambitions over altering legal constraints. The legal constraints imposed by each of the three branches seem unlikely to diminish in the coming years or even decades.

The U.S. Supreme Court seems to be adopting a so-called ossification doctrine—a sort of meta-doctrine that has manifested in the creation and enforcement of the major questions doctrine, the revitalization of the nondelegation doctrine, and the reduction of agency discretion pursuant to Chevron v. Natural Resources Defense Council, Auer v. Robbins, and Kisor v. Wilkie.

Anticipatory and aspirational regulation is anathema to the ossification doctrine. Even if the other branches of the federal government reversed their respective stances on agency discretion, the courts would serve as a backstop that reinforces and entrenches an era of reactive and inconsequential regulation.

Notably, neither the executive branch nor the legislative branch seem likely to vary from their current positions. Both President Joseph R. Biden and former President Donald J. Trump—the two most likely occupants of the White House come 2025—established track records of subjecting regulatory action to greater scrutiny. And even though the U.S. Senate has so far proven to be unwilling to adopt the Regulations from the Executive in Need of Scrutiny Act of 2023, the ideas underlying this legislation have captured the support of the majority of the U.S. House of Representatives.

Given these legal constraints, even the creation of a new agency with boundless regulatory ambition seems doomed to issue rules and guidance that get stayed by the courts and ultimately reversed. This process could slightly raise public awareness of an issue but it would likely have little to no effect on whether emerging technologies pose severe, irreversible risks to the public. The best case for agencies in the current legal culture is to serve as a coordinator of industry self-regulation, rather than a regulatory police officer demanding compliance with aspirational regulations.

If legal constraints seem relatively fixed, then raising regulatory ambitions represents the better starting point for those keen on mitigating the risks related to emerging technologies.

That is where an ERR should come in. By studying IIHS’s record of serving as NHTSA’s source of regulatory ambition, an ERR can develop into a source of data and policy proposals that alter the legal culture by identifying anticipatory and aspirational regulations desired and demanded by the public. This demand function is the crucial bit—consumers need to understand the risks posed by products that feature emerging technologies to such an extent that they are willing to pay for safer products.

An old story from The New York Times illustrates the model that IIHS uses to shape consumer demand. First, IIHS performs visceral and definitive tests—in this case, running the 1970 and 1971 car models of various brands through the same low-speed crash tests. Next, it shares those results with regulators, regulated entities, and the public—for instance, by sending its president to testify before a Senate subcommittee. Then, IIHS presents its findings in relevant units—in this example, disclosing that the average estimated repair costs for the newer 1971 models were “markedly higher” on average.

This testing model allowed for easy dissemination of IIHS findings to the public. It is unsurprising that the public and, by extension, automakers have long been influenced by such tests.

Which tests should be used to measure the risks of emerging technologies and which standards would best convey those results to the public in a manner that alters their purchasing decisions is well beyond the scope of this essay. The aim here is simply to redirect the focus of individuals and organizations concerned about technological risk toward a successful institutional structure.

Given the current legal culture, characterized by significant legal constraints, the only hope for anticipatory and aspirational regulations is the creation of an entity akin to IIHS. Such an entity, an ERR, promises significant benefits. It could come to fruition sooner than a new agency or significant legislation. It could start conducting relevant tests prior to another generation of products equipped with emerging technologies being released. And finally, it could update and publicize its test results in a manner most likely to alter consumer and corporate behavior.

Kevin Frazier is an assistant professor at the Crump College of Law of St. Thomas University.

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