Modern Prometheans: Government Regulators Need to Understand and Appreciate Tech to Avoid Stifling Innovation, Says Utah AG Reyes

Topics: Access to Justice, Efficiency, Government, Government Regulation, Leadership, Regulation & Compliance, Risk Management

Tech-Enabled A2J

Sean Reyes, the Attorney General of Utah, has a perspective on technology somewhat unique among government regulators. Reyes often refers to tech inventors, investors and entrepreneurs as modern-day Prometheans, harkening back to the titan of Greek myth. According to lore, Prometheus stole fire from the gods, gifted it to mankind and, as a result, was punished eternally by Zeus and his fellow Olympians. To Reyes, modern technology, like ancient fire, has enriched mankind in sundry ways but can also be abused and cause great destruction. As AG, he says it is his job to guard against those abuses but hopes regulators will more fully appreciate the benefits of tech innovators and the sacrifices they make.

“To bring new tech to market, innovators take great risk, just as Prometheus did,” Reyes says. “Certainly, altruism is not their only motivation. They want to support families, be validated, and compensated appropriately. But, by and large, they have noble intentions for improving lives or changing the world. Statistically, they will fail numerous times, max out credit cards, work 100-hour weeks, wear 10 hats in a startup, and put it all on the line before being successful, if they ever are.” If they can overcome all of those obstacles and many more challenges facing any business, he says, then they must then deal with laws that cannot keep pace with innovation and regulators who are often skeptical of technology, particularly when it is highly disruptive.

“I’ve likened government regulators to the Greek gods of the technology space,” Reyes said. “Not because I literally believe we are gods — I actually think the opposite is true, that we are servants of the people, and we must approach the tremendous amount of responsibility vested in us by the people with a great deal of humility.” But, when it comes to the effect that government regulators and legislators can have on businesses, on the economy, and on jobs, they are in some senses, gods.

attorney general

Sean Reyes, the Attorney General of Utah

“We have an out-sized impact on the lives and the businesses that we oversee,” Reyes explains. “We wield enormous power. An investigation alone — whether or not wrongdoing is ultimately discovered — can ruin a company. If you have ever been on the other side of the government in an investigation or enforcement action, as I have for my [former] clients, you feel acutely the immense gravity of state power.”

In 2013, at the age of 42, Reyes was appointed Utah’s top law enforcement officer with a mandate to restore public trust in the wake of devastating scandals involving his predecessors. Reyes overwhelmingly won re-election in 2014 and 2016 based in part on his reputation as an aggressive prosecutor of criminal conduct. But in forging his image as bulldog on crime, his business background has helped him remember the lessons he learned working for and defending technology companies.

Prior to public service, he spent years on the business side of technology, running a venture fund, as general counsel for a small tech and media company in Utah, and practicing for 14 years at one of the state’s largest law firms where he represented tech companies. So, it’s with caution, not hubris, that he worries about how regulators approach the tech sector and innovation in general.

“Sometimes we are afraid of tech because we don’t understand it. Other times, we do understand it, but assume the worst about it,” he explains. “In certain cases, we overreact in our well-intended efforts to protect our citizens, consumers, and markets. In the process, we punish the Prometheans, we punish the businesses and the innovators, and without intending it, we punish consumers as well.”

So, what’s the best way to combat this problem?

Respectful and Bi-Partisan Networking

Networking and education — and that’s what makes Reyes’ involvement in organizations like the Conference of Western Attorneys General (CWAG) so vital, he says. “Being involved in an organization like CWAG is a perfect opportunity to cultivate this confluence of interests,” he notes. “CWAG helps bring together regulators, the business community, NGOs, and policy makers to discuss in a respectful, bi-partisan, and productive way how to find that ever-elusive balance we seek.”

Reyes says that one of the things that he loves about CWAG is how members can collaborate without partisan distraction on different initiatives. About three years ago, Reyes asked CWAG Executive Director Karen White if he could create a cyber summit to address issues of cyber-crime, data security, and privacy — not just as an offering to CWAG members, but also as a way to educate himself and his colleagues. Interest in the program grew and when CWAG Chair Mark Brnovich, AG of Arizona, crafted his Chair’s Initiative on these issues, he rolled Reyes’ program into the larger initiative.

Similarly, as Chairman of the powerful Rule of Law Defense Fund (the policy arm of the Republican Attorney General Association), Reyes has also led tech education efforts among his Republican counterparts, hosting a first-ever technology summit this year in San Jose that included Oracle CEO Safra Catz, Rick White of Wozniak & White, and Banjo founder Damien Patton.

“Government works best, especially in my state of Utah, when it is a primer for facilitating, guiding, and orienting those who are better fit to solve problems.”

Delving deep into the regulation of technology is exciting and educational, and simultaneously terrifying, because if you think about it from just a vulnerability stand-point, it can be overwhelming, Reyes says. “Consumers might look at a smart refrigerator and think it’s the most awesome thing they’ve ever seen because it can sync their calendar, remind them when credit cards need to be paid, detect when their milk is getting low, and signal Amazon, which sends a drone to drop off a gallon at their doorstep,” he adds. “But they may not realize how much more exposed they are to a hacker by integrating so much personal information in one spot.” So, while tech is maximizing efficiency or convenience in life, Reyes notes that regulators are thinking, ‘Okay, how do we make sure all these good things cannot be abused, and what can we do to protect this expanding interconnectivity for our constituents?’

That’s where Reyes sees the bright light on the horizon — finding ways government regulators and policy-makers can work to promote innovation and change while still providing strong protections for consumers, markets, and society. “If we can keep government as a catalyst to draw on the awesome power of the private sector, the education community, NGOs, the non-profit and for-profit world, and corral all of those resources toward a solution that is best,” he says. “Government works best, especially in my state of Utah, when it is a primer for facilitating, guiding, and orienting those who are better fit to solve problems.” However, when government, which is not inherently efficient, tries to be the answer to every problem — and it doesn’t matter if it’s federal, state, or local government — it starts to metastasize and becomes counterproductive, he explains.

“Then, you start to see government creep into everything,” Reyes warns, adding that before anyone realizes it, government has crafted overly restrictive regulations and is enforcing them aggressively. “When that happens, we are punishing the Prometheans of our time.”