Your update on important Internet policy issues
The COVID-19 pandemic crisis has halted indefinitely Congressional activity on tech sector-related legislation. Congress and the Administration have shifted focus exclusively to responding to the public health, safety, and economic impacts of this unprecedented national emergency. Nationwide, huge swaths of the public and private sector (including schools, colleges, and universities, and government agencies) where possible have moved operations online. The pandemic also has forced a delay in some state Presidential election primaries and suspended large campaign rallies and live audience debates until further notice.
Prior to the national emergency, Congress was engaged in an active tech agenda, including:
Section 230/Intermediary Liability. Senate Judiciary Chairman Lindsey Graham (R-SC) and Senator Richard Blumenthal (D-CT) introduced S. 3398, the “Eliminating Abusive and Rampant Neglect of Interactive Technologies Act of 2020,” the EARN IT Act, on March 5. The bill would condition Section 230 liability protections on compliance with “best practices” for preventing child sexual exploitation online which would be developed by a 19-member commission, subject to Congressional review. The Senate Judiciary Committee held a hearing on the bill on March 11. The bill has drawn some bipartisan support, but is opposed by many tech companies and leading privacy and security advocates because it threatens free speech and security online.
Attorney General William Barr hosted a half-day DOJ workshop on Section 230 on February 19, 2020. Attorney General Barr followed this event with a March 5 DOJ announcement of voluntary principles developed with and agreed to by six major tech companies (Google, Facebook, Microsoft, Snap, Twitter and Roblox) governing how they police content to prevent child sexual abuse online and potentially serving as a baseline for the tech industry as a whole.
There have been rumblings that the U.S. Trade Representative is being pushed to exclude “conduit immunity” language from upcoming trade negotiations. This is a developing issue that the i2Coalition is following closely.
DMCA Modernization. The Senate Judiciary IP Subcommittee held the second in its series of hearings on DMCA modernization on March 10. The hearing focused on international online copyright infringement and how other countries police this behavior.
Federal Privacy. Bipartisan comprehensive federal privacy legislation negotiations have yet to resolve preemption and private right of action sticking points. Several new bills have been introduced by individual Senators addressing preemption and added regulatory and enforcement resources.
Antitrust/Competition Policy. The Senate Judiciary Antitrust Subcommittee held a hearing examining self-preferencing by digital platforms. The DOJ held a workshop on proposed vertical merger guidelines.
The timing of a return to regular legislative order in Congress and policymaking in the Administration is unclear and depends on the effect of the extraordinary measures imposed nationwide in mid-March to slow virus spread. The i2Coalition will stay alert to policymaking opportunities emerging from this crisis through which the capabilities of a safe and open Internet may be harnessed to support public health, safety, and economic resilience and recovery.
Economy & Workforce:
COVID-19 Reaction – President Trump declared a National Emergency on March 13, invoking the Stafford Act to open the door to more federal aid for states and municipalities. The House passed an assistance package on Friday, March 13 (the “Families First Coronavirus Response Act”) prior to its recess, and then passed a revised “technical corrections” bill by unanimous consent on March 16. The Senate postponed its recess and will act on a relief measure as quickly as possible following the House’s action. Additional industry-targeted assistance bills (e.g., travel and tourism sector) and other emergency legislation may soon follow. The White House is pushing Congress for a “go big” recovery package that may top $1 trillion and will include options for aid for airlines, hotels, casinos and small-to-medium-sized businesses ($250B).
As businesses begin to shut down or limit operations to slow the transmission of COVID-19, many questions have surfaced about compensation and benefits for gig and hourly employees. Congress and the Administration will continue to focus on these issues as part of the overall economic stimulus and workforce policy response to the COVID-19 crisis.
Section 230/Intermediary Liability Rules:
Senate: S. 3398, The EARN IT Act – On Thursday March 5, Senate Judiciary Committee Chairman Lindsey Graham (R-SC) and Senator Richard Blumenthal (D-CT) introduced S. 3398, the “Eliminating Abusive and Rampant Neglect of Interactive Technologies Act of 2020,” or EARN IT Act. As of mid-March the bill has eleven cosponsors and has drawn bipartisan support. The bill would create a 19-member commission tasked with crafting “best practices” for companies to follow to combat child abuse online, subject to congressional review. The commission would include the heads of the DOJ, DHS, and the FTC, plus 16 additional members appointed by Congress and including some from the tech sector. The bill has not been well-received in either the tech community or by privacy and security advocates because they have argued that it threatens both free speech and security online.
The Senate Judiciary Committee held a hearing on the bill on Wednesday, March 11. Witnesses included representatives from the Internet Association, Match Group, the National Center for Missing & Exploited Children, and the Catholic University Law School. Of the witnesses, only the Internet Association voiced opposition to the bill. The majority of the nine Senators that actively participated in the hearing agreed that many tech companies are not doing enough to stop the abuse and sexual exploitation of children online. Only two Senators (Lee and Leahy) seemed to question the potential consequences of the legislation regarding Fourth Amendment concerns and encryption. Blumenthal explicitly stated that he does not believe that S. 3398 poses a threat to end-to-end (E2E) encryption and cited WhatsApp as an example of an E2E-encrypted platform that still has high exploitation reporting numbers. Graham notably expressed a strong desire to move quickly on this bill, but it is possible there will be another hearing on the bill with testimony from law enforcement officials. After the hearing Blumenthal said that he expects a bipartisan House companion bill to be introduced.
House: Schakowsky Letter to USTR – Rep. Jan Schakowsky (D-IL), chairwoman of the House Energy and Commerce Subcommittee on Consumer Protection and Commerce, sent a February 27 letter to USTR Ambassador Lighthizer reiterating that USTR should not include Section 230-like protections in future trade deals. This follows the successful inclusion of the provisions in USMCA, which Energy and Commerce leaders warned against. Schakowsky is also drafting Section 230 legislation that she intends to help protect consumers from illegal third-party conduct on platforms.
Department of Justice Section 230 Workshop – On February 19, the Justice Department hosted a workshop to discuss the status and importance of Section 230. Attorney General Barr said the Department is seeking to determine whether the liability protections are still necessary for tech companies, which he noted are no longer “underdog upstarts” and have become “titans of U.S. industry.” Barr hopes to incentivize companies to create a safer environment on their own.
DOJ Child Exploitation Prevention Guidelines – On Thursday, March 5, the Department of Justice unveiled voluntary principles calling on tech companies to adopt rules and practices on reports of abuse to law enforcement, how they search for suspected child exploitation and harm on their sites, and the type of advice they provide to potential victims. The principles were crafted with input from Silicon Valley and AG Barr said he hopes that they will set up a baseline for companies to follow to deter online abusers.
India Intermediary Liability Rules – India’s proposed modifications to its intermediary liability rules continue to draw strong opposition from the tech sector. On behalf of our numerous members with India operations, the i2Coalition has urged India’s authorities to reconsider its approach due to the negative impacts it would have on Internet infrastructure providers.
EU – Artificial Intelligence (AI) – The European Commission released plans to regulate the use of AI and encourage data sharing among companies and governments in Europe, with a proposal expected later this year that could make platforms liable for hosted content. Under the proposed rules, AI would be deemed “high risk” or “not high risk,” where high-risk applications, such as in the health or law enforcement fields, could face sanctions and would be subject to a series of tests by authorities. U.S. Chief Technology Officer Michael Kratsios criticized the plan and will discuss the Administration’s concerns with the EU.
- Consumer Data Privacy and Security Act – Sen. Jerry Moran (R-KS) introduced S. 3456, that would create a national privacy standard that preempts most state laws and authorizes the Federal Trade Commission to hire 440 new employees to increase the agency’s privacy enforcement. It does not include a private right of action. This is separate from the Chairman Wicker draft that was circulating a few months ago, and it was originally intended to be a bipartisan bill with Sen. Richard Blumenthal (D-CT), though the two could not yet come to an agreement. Blumenthal said that he looks forward to more conversations about the bill.
- Data Protection Act – Sen. Kristen Gillibrand (D-NY) introduced S. 3300, the Data Protection Act, on February 13 to establish a Federal data protection agency that would oversee and create new rules for how tech companies can collect, use and store the personal information of users. Gillibrand’s legislation adds to a growing number of bills from lawmakers looking to either create a new agency to deal with privacy matters or reform the FTC’s powers.
- Kids’ Internet Design and Safety Act – Sens. Blumenthal (D-CT) and Markey (D-MA) introduced legislation on March 5 which would require social media platforms like YouTube and TikTok to place new restrictions on how users under the age of 16 interact with their sites. Specifically, the bill would bar autoplay videos, push alerts and other features that typically encourage children to spend more time on the site.
FISA Bill – The House passed the Foreign Intelligence Surveillance Act reauthorization on March 11. The Senate passed a 77-day stopgap extension of authority on March 16 which the House is expected to approve. This temporary extension provides breathing room so that later, after the immediate COVID-19 crisis has subsided, the Senate can debate surveillance and privacy issues raised for some Senators in the House-passed bill. The House bill addresses three provisions of the USA Freedom Act that touch on roving wiretaps, lone wolf surveillance and a controversial program that previously allowed the U.S. government to request access to phone metadata. Senators Lee (R-UT) and Paul (R-KY) have encouraged the president to veto the bill because they do not think it is enough of a reform and does not address what they believe was unwarranted spying on the president during the 2016 election. AG Barr supports the measure, but Trump has not reflected his full support for the House bill.
Senate – DMCA Hearing – On Tuesday, March 10, the Senate Judiciary Subcommittee on Intellectual Property held a hearing entitled, “Copyright Law in Foreign Jurisdictions: How Are Other Countries Handling Digital Piracy.” The hearing provided Members of the Subcommittee with an opportunity to examine online acts of copyright infringement occurring overseas and the manner by which foreign countries police such behavior. Chairman Tillis (R-NC) said that this was the second in an ongoing series of hearings focused on the DMCA. He closed his statement by expressing interest in examining the recently enacted EU copyright directive and the merits behind the possibility of implementing site blocking here in the U.S. Ranking Member Coons (D-DE) expressed a similar view, but he also articulated a greater appreciation for striking the right balance between the interests of copyright owners versus those of copyright users. The next hearing is tentatively scheduled for April 28 and will address whether private agreements and existing technology provide a solution to online piracy.
Digital Platforms’ Self-Preferencing Hearing – On March 10 the Senate Judiciary Subcommittee on Antitrust held a hearing to address potential antitrust issues raised when digital platforms leverage their market power to advantage their own products or services over those of third parties also offered through their platforms. Witnesses included public interest groups, an economics professor, Yelp and ACT/The App Association. The panels debated whether current law is sufficient to deal with anticompetitive behavior by large digital platforms. Possible new enforcement approaches were discussed, ranging from the creation of an expert regulatory agency that would ensure the operation of a non-discrimination framework, to an outright rule prohibiting platforms from competing with users of their platforms to eliminate the ability to self-preference.
DOJ Workshop on Vertical Mergers – On Wednesday, March 11, the Justice Department held a public workshop focusing on the “Proposed Vertical Merger Guidelines” it developed in conjunction with the Federal Trade Commission. The workshop provided current and former antitrust enforcement officials, members of academia and public interest representatives with an opportunity to comment on the draft guidelines and recommend possible improvements to how federal antitrust agencies review vertical mergers to evaluate whether they violate antitrust law. The FTC’s subsequent workshop originally scheduled for March 18 has been postponed.
Economic Report of the President – In its annual report, the Council of Economic Advisers (CEA) pushed back on calls from a report during the Obama administration to strengthen antitrust enforcement, saying rewrites to the law or creation of a new digital regulator would be “premature.” The report called into question the conclusions of the 2016 study, saying evidence was at best “inconclusive.” The CEA specifically took issue with Sen. Amy Klobuchar’s (D-MN) bill that would change the legal standard to make it easier for federal agencies to block mergers.
Trade and Tax:
USMCA – On March 13, Canada formally approved the United States-Mexico-Canada Agreement (USMCA). The deal was passed through the legislature before Parliament shut down for five weeks in response to the coronavirus pandemic. This final approval kicks off a three-month period for all three signatory countries to agree on implementation regulations, including naming each country’s representatives for the conflict resolution mechanism.
U.K. Trade Agreement and Digital Tax – U.S. tech sector representatives have lashed out at the U.K.’s plans to impose a digital services tax from the beginning of April. This move could threaten the progress of the U.S.-U.K. trade agreement negotiations. On March 2, the U.K. DIT released a “UK-US Free Trade Agreement” action plan. The plan’s goals for digital trade are to reduce the cost of international trade, facilitate the coordination of global value chains, and help connect businesses and consumers, including mechanisms to support digital business models and contracts.
House: China Trade Ways and Means Committee Hearing – The Committee held a hearing on Wednesday February 26 on U.S.-China Trade and Competition. There was no witness from the Administration. Chairman Neal said that the goal of the hearing was to examine whether phase 1 of the China deal addresses all the concerns underlying the 301 case, and what should be addressed in phase 2. The Republican Members praised phase 1, and applauded the president for his efforts. Democratic Members focused on the need for an overall industrial and trade strategy when dealing with China, and raised concerns about overdependence on a single source for supply chains.
House: China – Pandemic-Related Tariff Relief Proposal – Democrats on the House Ways & Means Committee have suggested to USTR that the administration should consider lifting tariffs to blunt the economic impact of the coronavirus pandemic, but several members said USTR was not receptive to the proposal. White House trade advisor Peter Navarro also has rejected it out of hand. The issue was raised by Democrat Rep. Stephanie Murphy from Florida, who has been a thorn in the administration’s side on tariffs and the need for Congressional oversight. It was also echoed by the Trade Subcommittee Chair Rep. Earl Blumenauer (D-OR) and other Democrats on the committee. The possibility of tariffs being lifted is low right now, but could come up again as solutions for economic stimuli are discussed.
China/Supply Chain Threats:
- Senate – Network Security Trade Act – On March 5, Senator Thune (R-SD) introduced S. 3394, a bipartisan bill that seeks to ensure that trade agreements protect the security of digital telecommunications systems, including next generation 5G equipment. The legislation would expand the trade negotiating objectives under the Bipartisan Congressional Trade Priorities and Accountability Act of 2015. Negotiators would have to ensure the security of the global communications infrastructure and address unfair trade practices of suppliers owned or supported by foreign governments. Though Huawei and ZTE are not mentioned directly, this is an attempt to target those companies’ trade practices.
- “Rip and Replace” Enacted – On March 12, President Trump signed into law the Secure and Trusted Communications Act which would authorize the FCC to provide up to $1 billion to help small U.S. carriers rip out and replace equipment from Huawei and ZTE. Several dozen small U.S. carriers currently rely on such gear. FCC Chairman Pai put out a statement that the commission still needs accompanying appropriations to make this effort possible.
Senate – TikTok Ban Legislation – At a Senate Judiciary hearing on big tech and China, Sen. Josh Hawley (R-MO) expressed his displeasure with TikTok not agreeing to testify. He announced that he plans to introduce legislation that would ban the use of TikTok by all federal employees on government devices for national security reasons.
EUROPEAN LEGISLATIVE UPDATES:
One of i2Coalition’s global strategic partners is eco, a major Internet industry association in Europe, which provides a weekly “View From Brussels” update on European Internet politics. Read the latest updates here: https://international.eco.de/view/brussels/
We wish you the best, and please stay well.