Big Tech CEOs Appear At Hearing

In a marathon hearing, Democrats make their case on why big tech is engaged in antitrust and anti-competitive practices. Whether this hearing and a future report change anything is an open question.

First things first, if you would like to receive my Technology Policy Update, email me. You can find some of these Updates from 2019 and 2020 here.

On  29 July, the House Judiciary Committee’s Antitrust, Commercial, and Administrative Law Subcommittee held its sixth hearing on “Online Platforms and Market Power” titled “Examining the Dominance of Amazon, Apple, Facebook, and Google” with the heads of Amazon, Apple, Google, and Facebook that lasted more than five hours. Democrats largely focused their questions on the documents and information provided by the companies to make the case each had engaged in practices that are at the least anti-competitive if not illegal under the Sherman and Clayton Antitrust Acts. On the other hand, Republicans largely avoided discussing anti-competitive or antitrust issues except in connection with lines of questioning regarding social media moderation of content that is allegedly biased against conservatives and the People’s Republic of China (PRC).

The subcommittee is expected to issue its report in the near term with possible recommendations on how to amend US law to address the problems turned up during the investigation. However, the Republican-controlled Senate and the White House will likely not be receptive to legislation to update the US’ antitrust or anti-competitive laws. And yet, a Democratic White House and Senate may prove more receptive and able to effect changes in these laws. It remains to be seen whether the US Department of Justice (DOJ) and the Federal Trade Commission (FTC) bring broad cases against these companies for potential violations. Likewise, groups of states are collectively investigating Google and Facebook, and the attorney general of California is looking into Amazon’s business practices. Finally, the European Commission (EC) is also investigating a number of this companies as its new leadership considers the size and power of tech companies a central issue in the European Union.

Subcommittee Chair David Cicilline (D-RI) asserted “[a]lthough these four corporations differ in important and meaningful ways, we have observed common patterns and competition problems over the course of our investigation:

  • First, each platform is a bottleneck for a key channel of distribution. Whether they control access to information or to a marketplace, these platforms have the incentive and ability to exploit this power. They can charge exorbitant fees, impose oppressive contracts, and extract valuable data from the people and businesses that rely on them.
  • Second, each platform uses its control over digital infrastructure to surveil other companies—their growth, business activity, and whether they might pose a competitive threat. Each platform has used this data to protect its power, by either buying, copying, or by cutting off access for any actual or potential rival.
  • Third, these platforms abuse their control over current technologies to extend their power. Whether it’s through self-preferencing, predatory pricing, or requiring users to buy additional products, the dominant platforms have wielded their power in destructive, harmful ways in order to expand.

Cicilline stated that

  • At today’s hearing we will examine how each of these companies has used this playbook to achieve and maintain dominance—and how their power shapes and affects our daily lives. Why does this matter? Many of the practices used by these companies have harmful economic effects. They discourage entrepreneurship, destroy jobs, hike costs, and degrade quality. Simply put: They have too much power. This power staves off new forms of competition, creativity, and innovation. And while these dominant firms may still produce some new innovative products, their dominance is killing the small businesses, manufacturing, and overall dynamism that are the engines of the American economy.
  • Several of these firms also harvest and abuse people’s data to sell ads for everything from new books to dangerous “miracle” cures. When everyday Americans learn how much of their data is being mined, they can’t run away fast enough. But in many cases, there is no escape from this surveillance because there is no alternative. People are stuck with bad options. Open markets are predicated on the idea that if a company harms people, consumers, workers, and business partners will choose another option. We are here today because that choice is no longer possible.

Cicilline stated “I am confident that addressing the problems we see in these markets will lead to a stronger, more vibrant economy…[b]ecause concentrated economic power also leads to concentrated political power, this investigation also goes to the heart of whether we, as a people, govern ourselves, or whether we let ourselves be governed by private monopolies.”

Subcommittee Ranking Member James Sensenbrenner (R-WI) lauded the technological innovations the four companies have provided Americans that made coping with the COVID-19 pandemic easier. He reiterated that “being big is not inherently bad” and asserted the opposite was true because in the US success should be rewarded. Sensenbrenner said the hearing is designed to help the subcommittee better understand the roles the companies play in the digital marketplace and the effect on consumers and the public at large. He said that data drives the marketplace and those who control the data, in essence, control the marketplace. Sensenbrenner said there are broader questions around data such as who owns it; do they share data with their customers or competitors; what is the fair market value of that data; is there anything monopolistic in acquiring this data; and what are the implications of monetizing data.

Sensenbrenner claimed that since the “tech investigation” began, “we have heard rumblings from many” who say your companies have grown too large. He stated that since the hearing was announced the complaints have gotten even louder. Sensenbrenner said he found these complaints informative, but he did not plan on litigating each complaint today. He asserted antitrust law and the consumer welfare standard have served the US well for over a century and have provided a framework for some of the US’s most successful and innovative companies. Sensenbrenner allowed that as the economy evolves, antitrust law may need updating to meet the needs of the nation and its consumers. He stated his concern that market dominance in this space is ripe for abuse, “particularly when it comes to free speech,” as Facebook, YouTube, and Twitter have become the public space of today as political debate unfolds in real time. Sensenbrenner said that reports of “dissenting views, often conservative views” are targeted or censored are seriously troubling. He stressed that “conservatives are consumers, too” and “they need the protection of antitrust laws.” He argued that the power to shape debate carries tremendous responsibility.

Sensenbrenner said facts should guide the inquiry. He noted the companies are large, successful, and powerful, all of which are fine. He asserted he wanted to leave the hearing with a better picture of how these qualities affect consumers.

Amazon CEO Jeff Bezos claimed

  • The global retail market we compete in is strikingly large and extraordinarily competitive. Amazon accounts for less than 1% of the $25 trillion global retail market and less than 4% of retail in the U.S. Unlike industries that are winner-take-all, there’s room in retail for many winners. For example, more than 80 retailers in the U.S. alone earn over $1 billion in annual revenue.
  • Like any retailer, we know that the success of our store depends entirely on customers’ satisfaction with their experience in our store. Every day, Amazon competes against large, established players like Target, Costco, Kroger, and, of course, Walmart—a company more than twice Amazon’s size. And while we have always focused on producing a great customer experience for retail sales done primarily online, sales initiated online are now an even larger growth area for other stores. Walmart’s online sales grew 74% in the first quarter.
  • And customers are increasingly flocking to services invented by other stores that Amazon still can’t match at the scale of other large companies, like curbside pickup and in-store returns. The COVID-19 pandemic has put a spotlight on these trends, which have been growing for years. In recent months, curbside pickup of online orders has increased over 200%, in part due to COVID19 concerns. We also face new competition from the likes of Shopify and Instacart—companies that enable traditionally physical stores to put up a full online store almost instantaneously and to deliver products directly to customers in new and innovative ways—and a growing list of omnichannel business models. Like almost every other segment of our economy, technology is used everywhere in retail and has only made retail more competitive, whether online, in physical stores, or in the various combinations of the two that make up most stores today. And we and all other stores are acutely aware that, regardless of how the best features of “online” and “physical” stores are combined, we are all competing for and serving the same customers. The range of retail competitors and related services is constantly changing, and the only real constant in retail is customers’ desire for lower prices, better selection, and convenience.
  • It’s also important to understand that Amazon’s success depends overwhelmingly on the success of the thousands of small and medium-sized businesses that also sell their products in Amazon’s stores. Back in 1999, we took what at the time was the unprecedented step of welcoming third-party sellers into our stores and enabling them to offer their products right alongside our own. Internally, this was extremely controversial, with many disagreeing and some predicting this would be the beginning of a long, losing battle. We didn’t have to invite third-party sellers into the store. We could have kept this valuable real estate for ourselves. But we committed to the idea that over the long term it would increase selection for customers, and that more satisfied customers would be great for both third-party sellers and for Amazon. And that’s what happened.
  • Within a year of adding those sellers, third-party sales accounted for 5% of unit sales, and it quickly became clear that customers loved the convenience of being able to shop for the best products and to see prices from different sellers all in the same store. These small and medium-sized third-party businesses now add significantly more product selection to Amazon’s stores than Amazon’s own retail operation. Third-party sales now account for approximately 60% of physical product sales on Amazon, and those sales are growing faster than Amazon’s own retail sales. We guessed that it wasn’t a zero sum game. And we were right—the whole pie did grow, third-party sellers did very well and are growing fast, and that has been great for customers and for Amazon. There are now 1.7 million small and medium-sized businesses around the world selling in Amazon’s stores. More than 200,000 entrepreneurs worldwide surpassed $100,000 in sales in our stores in 2019. On top of that, we estimate that third-party businesses selling in Amazon’s stores have created over 2.2 million new jobs around the world.

Apple CEO Tim Cook asserted

  • The smartphone market is fiercely competitive, and companies like Samsung, LG, Huawei and Google have built very successful smartphone businesses offering different approaches.
  • Apple does not have a dominant market share in any market where we do business. That is not just true for iPhone; it is true for any product category.
  • What motivates us is the continuous improvement of the user experience, and we focus relentlessly on and invest significantly in new breakthroughs, innovative features and deepening the principles that set us apart.
  • Privacy and security are key examples of this drive. This is true for the iPhone and for every device we make. We build products that, from the ground up, help users protect their fundamental right to the privacy of their personal data. This principle is foundational and touches everything else we do.
  • We created the App Store in 2008 as a feature of the iPhone. Launching with a little more than 500 apps, it was our ambitious attempt to dramatically expand the features and customizability of every user’s device. We wanted to create a safe and trusted place for users to discover apps—and a means of providing a secure and supportive way for developers to develop, test and distribute apps to iPhone users globally.
  • Apple continuously improves, and provides every developer with cutting-edge tools like compilers, programming languages, operating systems, frameworks and more than 150,000 essential software building blocks called APIs. These are not only powerful, but so simple to use that students in elementary schools can and do make apps.
  • The App Store guidelines ensure a high-quality, reliable and secure user experience. They are transparent and applied equally to developers of all sizes and in all categories. They are not set in stone. Rather, they have changed as the world has changed, and we work with developers to apply them fairly.
  • For the vast majority of apps on the App Store, developers keep 100% of the money they make. The only apps that are subject to a commission are those where the developer acquires a customer on an Apple device and where the features or services would be experienced and consumed on an Apple device.
  • Apple’ s commissions are comparable to or lower than commissions charged by the majority of our competitors. And they are vastly lower than the 50 to 70 percent that software developers paid to distribute their work before we launched the App Store.
  • In the more than a decade since the App Store debuted, we have never raised the commission or added a single fee. In fact, we have reduced them for subscriptions and exempted additional categories of apps. The App Store evolves with the times, and every change we have made has been in the direction of providing a better experience for our users and a compelling business opportunity for developers.
  • I am here today because scrutiny is reasonable and appropriate. We approach this process with respect and humility. But we make no concession on the facts.

Alphabet CEO Sundar Pichai contended

  • Google operates in highly competitive and dynamic global markets, in which prices are free or falling, and products are constantly improving. Today’s competitive landscape looks nothing like it did 5 years ago, let alone 21 years ago, when Google launched its first product, Google Search.
  • For example, people have more ways to search for information than ever before — and increasingly this is happening outside the context of only a search engine. Often the answer is just a click or an app away: You can ask Alexa a question from your kitchen; read your news on Twitter; ask friends for information via WhatsApp; and get recommendations on Snapchat or Pinterest. When searching for products online, you may be visiting Amazon, eBay, Walmart, or any one of a number of e-commerce providers, where most online shopping queries happen.
  • Similarly, in areas like travel and real estate, Google faces strong competition for search queries from many businesses that are experts in these areas.
  • A competitive digital ad marketplace gives publishers and advertisers, and therefore consumers, an enormous amount of choice. For example, competition in ads — from Twitter, Instagram, Pinterest, Comcast and others — has helped lower online advertising costs by 40% over the last 10 years, with these savings passed down to consumers through lower prices.
  • We also deliberately build platforms that support the innovation of others. Using Android — a product I worked on for many years — thousands of device makers and mobile operators build and sell devices without any licensing fees to us or any requirement to integrate our products. This greatly reduces device prices, and today billions of consumers around the globe are now able to afford cuing-edge smartphones, some for less than $50. And in doing so they are able to access new opportunities — whether it’s sharing a video with friends and family around the world, gaining an education for themselves or their children, or starting a business. Competition also sets higher standards for privacy and security. I’ve always believed that privacy is a universal right and should be available to everyone, and Google is committed to keeping your information safe, treating it responsibly, and putting you in control of what you choose to share. We also never sell user information to third parties. But more must be done to protect users across industries, which is why we’ve long supported the creation of comprehensive federal privacy laws.

Facebook CEO Mark Zuckerberg asserted

  • Our story would not have been possible without U.S. laws that encourage competition and innovation. I believe that strong and consistent competition policy is vital because it ensures that the playing field is level for all. At Facebook, we compete hard, because we’re up against other smart and innovative companies that are determined to win. We know that our future success is not guaranteed, especially in a global tech industry defined by rapid innovation. The history of technology is often the history of failure, and even industry leading tech companies fail if they don’t stay competitive. This is why we’re focused on delivering better services for people and businesses, and competing as vigorously as we can within the rules.
  • Although people around the world use our products, Facebook is a proudly American company. We believe in values — democracy, competition, inclusion and free expression — that the American economy was built on. Many other tech companies share these values, but there’s no guarantee our values will win out. For example, China is building its own version of the internet focused on very different ideas, and they are exporting their vision to other countries. As Congress and other stakeholders consider how antitrust laws support competition in the U.S., I believe it’s important to maintain the core values of openness and fairness that have made America’s digital economy a force for empowerment and opportunity here and around the world.
  • Like many companies, we’ve both built our own products from the ground up, and we’ve moved others forward through mergers and acquisitions. Our acquisitions have helped drive innovation for people who use our own products and services and for the broader startup community. Acquisitions bring together different companies’ complementary strengths. When you acquire a company, you can benefit from their technology and talent, and when you are acquired you get access to resources and people you otherwise might never have been able to tap into.
  • Facebook has made Instagram and WhatsApp successful as part of our family of apps. Instagram and WhatsApp have been able to grow and operate their services using Facebook’s bespoke, lower-cost infrastructure and tackle spam and harmful content with Facebook’s integrity teams and technology.
  • Following its acquisition, Instagram was able to get help stabilizing infrastructure and controlling runaway spam. It also benefited from the ability to plug into Facebook’s self-serve ads system, sales team and existing advertiser relationships to drive monetization, and was able to build products including IG Direct and IG Video that used Facebook’s technology and infrastructure. Before it was acquired, WhatsApp was a paid app with a reputation for secure communications; together we built on that by introducing end-to-end encryption and making it free to use. Since its acquisition, WhatsApp has also been able to develop products such as voice and video calling that were built on Facebook’s technology stack.
  • These benefits came about as a result of our acquisition of those companies, and would not have happened had we not made those acquisitions. We have developed new products for Instagram and WhatsApp, and we have learned from those companies to bring new ideas to Facebook. The end result is better services that provide more value to people and advertisers, which is a core goal of Facebook’s acquisition strategy.

© Michael Kans, Michael Kans Blog and michaelkans.blog, 2019-2020. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Michael Kans, Michael Kans Blog, and michaelkans.blog with appropriate and specific direction to the original content.

Image by Jorge Guillen from Pixabay

Further Reading, Other Developments, and Coming Events (28 July)

First things first, if you would like to receive my Technology Policy Update, email me. You can find some of these Updates from 2019 and 2020 here.

Here are Further Reading, Other Developments, and Coming Events.

Coming Events

  • On 28 July, the House Rules Committee will consider the rule for and amendments to the H.R. 7617—Department of Defense Appropriations Act, 2021 [Defense, Commerce, Justice, Science, Energy and Water Development, Financial Services and General Government, Homeland Security, Labor, Health and Human Services, Education, Transportation, Housing, and Urban Development Appropriations Act, 2021].
  • On 28 July, the Senate Commerce, Science, and Transportation Committee’s Communications, Technology, Innovation, and the Internet Subcommittee will hold a hearing titled “The PACT Act and Section 230: The Impact of the Law that Helped Create the Internet and an Examination of Proposed Reforms for Today’s Online World.”
  • On 28 July the House Science, Space, and Technology Committee’s Investigations and Oversight and Research and Technology Subcommittees will hold a joint virtual hearing titled “The Role of Technology in Countering Trafficking in Persons” with these witnesses:
    • Ms. Anjana Rajan, Chief Technology Officer, Polaris
    • Mr. Matthew Daggett, Technical Staff, Humanitarian Assistance and Disaster Relief Systems Group, Lincoln Laboratory, Massachusetts Institute of Technology
    • Ms. Emily Kennedy, President and Co-Founder, Marinus Analytics
  • On  29 July, the House Judiciary Committee’s Antitrust, Commercial, and Administrative Law Subcommittee will hold its sixth hearing on “Online Platforms and Market Power” titled “Examining the Dominance of Amazon, Apple, Facebook, and Google” that will reportedly have the heads of the four companies as witnesses.
  • On 30 July the House Oversight and Reform Committee will hold a hearing on the tenth “Federal Information Technology Acquisition Reform Act” (FITARA) scorecard on federal information technology.
  • On 30 July, the Senate Commerce, Science, and Transportation Committee’s Security Subcommittee will hold a hearing titled “The China Challenge: Realignment of U.S. Economic Policies to Build Resiliency and Competitiveness” with these witnesses:
    • The Honorable Nazak Nikakhtar, Assistant Secretary for Industry and Analysis, International Trade Administration, U.S. Department of Commerce
    • Dr. Rush Doshi, Director of the Chinese Strategy Initiative, The Brookings Institution
    • Mr. Michael Wessel, Commissioner, U.S. – China Economic and Security Review Commission
  • On 4 August, the Senate Armed Services Committee will hold a hearing titled “Findings and Recommendations of the Cyberspace Solarium Commission” with these witnesses:
    • Senator Angus S. King, Jr. (I-ME), Co-Chair, Cyberspace Solarium Commission
    • Representative Michael J. Gallagher (R-WI), Co-Chair, Cyberspace Solarium Commission
    • Brigadier General John C. Inglis, ANG (Ret.), Commissioner, Cyberspace Solarium Commission
  • On 6 August, the Federal Communications Commission (FCC) will hold an open meeting to likely consider the following items:
    • C-band Auction Procedures. The Commission will consider a Public Notice that would adopt procedures for the auction of new flexible-use overlay licenses in the 3.7–3.98 GHz band (Auction 107) for 5G, the Internet of Things, and other advanced wireless services. (AU Docket No. 20-25)
    • Radio Duplication Rules. The Commission will consider a Report and Order that would eliminate the radio duplication rule with regard to AM stations and retain the rule for FM stations. (MB Docket Nos. 19-310. 17-105)
    • Common Antenna Siting Rules. The Commission will consider a Report and Order that would eliminate the common antenna siting rules for FM and TV broadcaster applicants and licensees. (MB Docket Nos. 19-282, 17-105)
    • Telecommunications Relay Service. The Commission will consider a Report and Order to repeal certain TRS rules that are no longer needed in light of changes in technology and voice communications services. (CG Docket No. 03-123)

Other Developments

  • The United States’ (US) Office of Management and Budget (OMB), an agency within the Executive Office of the President, has issued a memorandum in the same vein as other Trump Administration initiatives to increase the US government’s buying of goods and services produced domestically. Noting that 40% of the funds provided by Congress through annual legislation will be spent between 1 July and 30 September (roughly $200 billion), OMB urged federal agencies “to keep the following considerations in mind to support timely awards and maximize return on investment from each taxpayer dollar” among others:
    • Take full advantage of acquisition flexibilities and innovative tools. This week, the President’s Management Agenda unveiled a new cross-agency priority goal (CAP Goal) on “frictionless acquisition.” This CAP Goal creates a management platform to leverage modem buying strategies that have been shown to achieve just-in-time delivery with improved customer satisfaction and enable access to a broader and more innovative suite of companies and solutions. Agencies can review the resources on acquisition innovation and opportunities for collaboration by going to the frictionless CAP Goal on performance.gov.
      • The Goal Statement of this new CAP is “The Federal Government will deliver commercial items at the same speed as the market place & manage customers’ delivery expectations for acquisitions of non-commercial items by breaking down barriers to entry using modern business practices and technologies” as explained in a detailed presentation on frictionless acquisition released this month.
    • Use the resources of category management. As part of the ongoing transformation of federal acquisition, procurement involving common needs has been organized around categories of spending led by market experts who share business intelligence and help agencies avoid duplicative contracting work. This business structure has saved taxpayers more than $27 billion since FY 2016 and made it much easier for buyers to make rapid, well­ informed decisions on how best to acquire IT hardware, security, consulting services and many other every day needs that account for more than half of all contract spending. To stay current with market trends and available federal solutions, agencies should bookmark the category management dashboards on the acquisition gateway at https://hallways.cap.gsa.gov/app/#/.
    • Buy American. E.O. 13881 strengthens the general preference for American-made goods and, for the first time in 65 years, increases the percentage of U.S. manufactured content that must be in a product to qualify for the preference, including a very high standard for iron and steel. Agencies are encouraged to work with the Federal Acquisition Regulatory Council (FAR Council) to consider early implementation, as appropriate, while the rulemaking process proceeds.
    • In a related memorandum issued earlier this month, OMB asserted
      • Under the President’s Management Agenda and the leadership of OMB ‘s Office of Federal Procurement Policy (OFPP), the Administration has elevated the importance of acquisition innovation and category management as key pillars of a modernized procurement system. These pillars are proving to be critical assets in the face of market conditions that require heightened agility and the ongoing need r physical distancing as communities take steps to reopen. We are seeing smart use of existing contract vehicles and resources, supported by our category management market experts, such as for cleaning and distinction, information technology related to telework and healthcare, and enhanced entry screening services. We are also seeing growing examples of agencies leveraging innovative business practices, such as virtual acquisitions, that save time and enable acquisitions to continue where they might otherwise have been stopped.
      • OMB went on to detail best practices and examples in how agencies have adapted their procurement authority to the pandemic commensurate with ongoing Administration priorities such as category management
  • Senator Amy Klobuchar (D-MN) and some of her Democratic colleagues wrote Attorney General William Barr “to raise serious concerns regarding Google LLC’s (Google) proposed acquisition of Fitbit, Inc. (Fitbit)”. They stated
    • We are aware that the Antitrust Division of the Department of Justice is investigating this transaction and has issued a Second Request to gather additional information about the acquisition’s potential effects on competition. Amid reports that Google is offering modest, short-term concessions to overseas enforcers to avoid a full-scale investigation of the transaction in Europe, we write to urge the Division to continue with its efforts to conduct a thorough and comprehensive review of this proposed merger and to take any and all enforcement action warranted by the law and the evidence.
    • This letter comes at a time when the Department of Justice is considering Google’s potential antitrust practices and whether to file suit. The European Commission is also investigating the Google acquisition of FitBit.
    • Klobuchar is the Ranking Member of the Senate Judiciary Committee’s Antitrust, Competition Policy and Consumer Rights Subcommittee and was joined on the letter by Senators Richard Blumenthal (D-CT), Cory Booker (D-NJ), Mazie K. Hirono (D-HI), Sherrod Brown (D-OH), Mark Warner (D-VA), and Elizabeth Warren (D-MA).
  • Facebook and members of a class action and their attorneys have reached a second settlement in a suit brought under Illinois’ “Biometric Information Privacy Act” after a first settlement was rejected by the judge overseeing Patel, et al. v. Facebook, Inc.,. In January, the plaintiffs and Facebook agreed on a $550 million settlement to resolve claims the social media giant used and stored  people’s images contrary to the Illinois ban on such practices absent explicit consent. Facebook faced liability of up to $5000 per person affected and more than $40 billion in total potential liability. However, the judge thought the settlement was too low considering the Illinois legislature expressed its intention that violations would be punished more on the order of $1000 per person. Now, the parties have added $100 million, arriving at a $650 million settlement the judge will still need to bless.
  • Secretary of State Mike Pompeo made a speech at the Ronald Reagan Library “to make clear that the threats to Americans that President Trump’s China policy aims to address are clear and our strategy for securing those freedoms established.” Pompeo’s speech in the fourth in a series of Trump Administration officials making the Administration’s case against the People’s Republic of China (PRC), in some cases conflating PRC’s vying with the United States worldwide with the COVID-19 pandemic, suggesting the PRC is responsible for the course of the virus in the US and not Trump Administration policy.
  • The Department of Defense’s National Security Agency (NSA) and Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) “released an advisory for critical infrastructure Operational Technology (OT) and Industrial Controls Systems (ICS) assets to be aware of current threats we observe, prioritize assessing their cybersecurity defenses and take appropriate action to secure their systems.” The agencies asserted “[d]ue to the increase in adversary capabilities and activities, the criticality to U.S. national security and way of life, and the vulnerability of OT systems, civilian infrastructure makes attractive targets for foreign powers attempting to harm to US interests or retaliate for perceived US aggression.”
  • The Secretary of Defense released a memorandum for Department of Defense (DOD) regarding “poor Proper Operations Security (OPSEC) practices within DOD in the past have resulted in the unauthorized disclosure or ” leaks” of controlled unclassified information (CUI), including information to be safeguarded under the CUI category for OPSEC, as well as classified national security information (together referred to here as “non-public information”). Secretary of Defense Mark Esper asserted “[o]ngoing reviews reveal a culture of insufficient OPSEC practices and habits within the DOD” and stated “[m]y goal, through an OPSEC campaign, is to change that culture across DOD by reminding DOD personnel.”
  • The United Kingdom’s Information Commissioner’s Office (ICO) published its annual report for 2019-2020, “covering what the Information Commissioner has called a “transformative period” for privacy and data protection and broader information rights.” The ICO offered these highlights:
    • Supporting and protecting the public and organisations
      • The Age Appropriate Design Code, introduced by the Data Protection Act 2018, was published in January. When it comes into full effect, it will help steer businesses to comply with current information rights legislation.
      • We intervened in the High Court case on the use of facial recognition technology by the South Wales Police as part of our work to ensure that the use of this technology does not infringe people’s rights.  As a response to the judgement, we issued the first Commissioner’s Opinion.
      • Our new freedom of information strategy was launched which sets out how we work to create a culture of openness in public authorities.  It also commits us to making the case for reform of the access to information law as set out previously in our Outsourcing Oversight report.
      • In figures:
        • We received 38,514 data protection complaints.
        • We closed 39,860 data protection cases (up from 34,684 in 2018/19) .
        • We received 6,367 freedom of information complaint cases.
    • Enforcement
      • We took regulatory action 236 times in response to breaches of the legislation that we regulate. That included 54 information notices, eight assessment notices, seven enforcement notices, four cautions, eight prosecutions and 15 fines.  
      • Over 2,100 investigations were conducted.
    • Innovation
      • Through our successful regulatory sandbox service, we have worked with a number of innovative organisations of all sizes to explore new data uses in a safe way while helping to ensure their customers’ privacy.
      • We also received additional resources from the government’s regulators innovation fund to set up a hub with other regulators to streamline and reduce burdens on businesses and public services using data.
      • In January, we launched our consultation on an AI framework to allow the auditing and assessment of the risk associated with AI applications and how to ensure their use is transparent, fair and accountable.
    • International
      • On a global scale, we continue to chair the Global Privacy Assembly, driving forward the development of the assembly into an international network that can have an impact on key data protection issues across the year. This helps to protect UK citizen’s personal data as it crosses borders and helps UK businesses operating internationally.
      • Due to the period covered by the report it does not reflect the impact of COVID-19 although, acknowledging the pandemic, Ms Denham said: ”The digital evolution of the past decade has accelerated at a dizzying speed in the past few months. Digital services are now central to how so many of us work, entertain ourselves and talk to friends and family.”

Further Reading

  • The Twitter Hacks Have to Stop” – The Atlantic. Bruce Schneier makes the case that the United States and other western democracies must step in and regulate vital platforms like Twitter for security and size given the central role they play in most societies. Letting these companies implement their own security without oversight or transparency has led to a situation where the account of world leaders or government agencies are vulnerable to hacks and misinformation. Schneier thinks the size and dominance of Twitter, Facebook, etc is a major part of this problem that must also be addressed.
  • US and Australia set to launch campaign to counter disinformation” – Sydney Morning Herald. Two of the Five Eyes allies met in Washington on 27 July for their annual Australia-U.S. Ministerial Consultations (AUSMIN) and part of their planning on how to counter the People’s Republic of China (PRC) is working together on an effort to address the PRC’s disinformation campaigns. The already close relationship between Washington and Canberra has deepened as tensions between the United States (US) and PRC continue to escalate. However, the US and Australia are framing this initiative as aiming to counter all disinformation in the Indo-Pacific region, suggesting other nations may be waging disinformation campaigns of concern, including the Russian Federation and the Democratic People’s Republic of Korea.
  • Russia’s GRU Hackers Hit US Government and Energy Targets” – WIRED. Starting in December 2018, APT28 (aka Fancy Bear), a Russian hacking group, targeted and penetrated a number of United States (US) entities, including federal and state governments, educational institutions, and energy companies. APT28 is closely associated with Glavnoye razvedyvatel’noye upravleniye (GRU), the Main Directorate of the General Staff of the Armed Forces of the Russian Federation and is the entity behind the takedowns of Ukraine’s electrical grid in 2015 and 2016 among other high profile hacks and attacks. The timing of these attacks, sometimes executed as phishing attacks, is interesting for it comes after US Cyber Command and possibly the Central Intelligence Agency (CIA) took down Russia’s Internet Research Agency and other actions designed to deter Russian interference in the 2019 mid-term elections in November 2018.
  • “Hurting People  At Scale” – Facebook’s Employees Reckon With The Social Network They’ve Built” – BuzzFeed News. This article documents the dissent and turmoil inside the company about content moderation, which some see the social media giant doing dismally. Some employees and ex-employees are taking issue with how CEO Mark Zuckerberg and his leadership are acting or not to take down extreme and violent content.
  • Big Tech Funds a Think Tank Pushing for Fewer Rules. For Big Tech.” – The New York Times. The Global Antitrust Institute at George Mason University’s Antonin Scalia Law School has been pushing for less regulation of antitrust statutes and regulations, especially in “educating” antitrust officials at conferences. It has also been financially supported by large technology companies which benefit from these policies and has not been transparent about its funding or the extent to which these companies’ positions on antitrust inform its efforts and output. A similar New York Times investigation into other Washington DC think tanks exposed the transactional nature of some of these institutions, donors, and positions.

© Michael Kans, Michael Kans Blog and michaelkans.blog, 2019-2020. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Michael Kans, Michael Kans Blog, and michaelkans.blog with appropriate and specific direction to the original content.

Further Reading, Other Developments, and Coming Events (24 July)

First things first, if you would like to receive my Technology Policy Update, email me. You can find some of these Updates from 2019 and 2020 here.

Here are Further Reading, Other Developments, and Coming Events.

Coming Events

  • On  27 July, the House Judiciary Committee’s Antitrust, Commercial, and Administrative Law Subcommittee will hold its sixth hearing on “Online Platforms and Market Power” titled “Examining the Dominance of Amazon, Apple, Facebook, and Google” that will reportedly have the heads of the four companies as witnesses.
  • On 28 July, the Senate Commerce, Science, and Transportation Committee’s Communications, Technology, Innovation, and the Internet Subcommittee will hold a hearing titled “The PACT Act and Section 230: The Impact of the Law that Helped Create the Internet and an Examination of Proposed Reforms for Today’s Online World.”
  • On 28 July the House Science, Space, and Technology Committee’s Investigations and Oversight and Research and Technology Subcommittees will hold a joint virtual hearing titled “The Role of Technology in Countering Trafficking in Persons” with these witnesses:
    • Ms. Anjana Rajan, Chief Technology Officer, Polaris
    • Mr. Matthew Daggett, Technical Staff, Humanitarian Assistance and Disaster Relief Systems Group, Lincoln Laboratory, Massachusetts Institute of Technology
    • Ms. Emily Kennedy, President and Co-Founder, Marinus Analytics
  •  On 28 July, the House Homeland Security Committee’s Cybersecurity, Infrastructure Protection, & Innovation Subcommittee will hold a hearing titled “Secure, Safe, and Auditable: Protecting the Integrity of the 2020 Elections” with these witnesses:
    • Mr. David Levine, Elections Integrity Fellow, Alliance for Securing Democracy, German Marshall Fund of the United States
    • Ms. Sylvia Albert, Director of Voting and Elections, Common Cause
    • Ms. Amber McReynolds, Chief Executive Officer, National Vote at Home Institute
    • Mr. John Gilligan, President and Chief Executive Officer, Center for Internet Security, Inc.
  • On 30 July the House Oversight and Reform Committee will hold a hearing on the tenth “Federal Information Technology Acquisition Reform Act” (FITARA) scorecard on federal information technology.
  • On 30 July, the Senate Commerce, Science, and Transportation Committee’s Security Subcommittee will hold a hearing titled “The China Challenge: Realignment of U.S. Economic Policies to Build Resiliency and Competitiveness” with these witnesses:
    • The Honorable Nazak Nikakhtar, Assistant Secretary for Industry and Analysis, International Trade Administration, U.S. Department of Commerce
    • Dr. Rush Doshi, Director of the Chinese Strategy Initiative, The Brookings Institution
    • Mr. Michael Wessel, Commissioner, U.S. – China Economic and Security Review Commission
  • On 4 August, the Senate Armed Services Committee will hold a hearing titled “Findings and Recommendations of the Cyberspace Solarium Commission” with these witnesses:
    • Senator Angus S. King, Jr. (I-ME), Co-Chair, Cyberspace Solarium Commission
    • Representative Michael J. Gallagher (R-WI), Co-Chair, Cyberspace Solarium Commission
    • Brigadier General John C. Inglis, ANG (Ret.), Commissioner, Cyberspace Solarium Commission
  • On 6 August, the Federal Communications Commission (FCC) will hold an open meeting to likely consider the following items:
    • C-band Auction Procedures. The Commission will consider a Public Notice that would adopt procedures for the auction of new flexible-use overlay licenses in the 3.7–3.98 GHz band (Auction 107) for 5G, the Internet of Things, and other advanced wireless services. (AU Docket No. 20-25)
    • Radio Duplication Rules. The Commission will consider a Report and Order that would eliminate the radio duplication rule with regard to AM stations and retain the rule for FM stations. (MB Docket Nos. 19-310. 17-105)
    • Common Antenna Siting Rules. The Commission will consider a Report and Order that would eliminate the common antenna siting rules for FM and TV broadcaster applicants and licensees. (MB Docket Nos. 19-282, 17-105)
    • Telecommunications Relay Service. The Commission will consider a Report and Order to repeal certain TRS rules that are no longer needed in light of changes in technology and voice communications services. (CG Docket No. 03-123)

Other Developments

  • Slack filed an antitrust complaint with the European Commission (EC) against Microsoft alleging that the latter’s tying Microsoft Teams to Microsoft Office is a move designed to push the former out of the market. A Slack vice president said in a statement “Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software.” While the filing of a complaint does not mean the EC will necessarily investigate, under its new leadership the EC has signaled in a number of ways its intent to address the size of some technology companies and the effect on competition.
  • The National Institute of Standards and Technology (NIST) has issued for comment NIST the 2nd Draft of NISTIR 8286, Integrating Cybersecurity and Enterprise Risk Management (ERM). NIST claimed this guidance document “promotes greater understanding of the relationship between cybersecurity risk management and ERM, and the benefits of integrating those approaches…[and] contains the same main concepts as the initial public draft, but their presentation has been revised to clarify the concepts and address other comments from the public.” Comments are due by 21 August 2020.
  • The United States National Security Commission on Artificial Intelligence (NSCAI) published its Second Quarter Recommendations, a compilation of policy proposals made this quarter. NSCAI said it is still on track to release its final recommendations in March 2021. The NSCAI asserted
    • The recommendations are not a comprehensive follow-up to the interim report or first quarter memorandum. They do not cover all areas that will be included in the final report. This memo spells out recommendations that can inform ongoing deliberations tied to policy, budget, and legislative calendars. But it also introduces recommendations designed to build a new framework for pivoting national security for the artificial intelligence (AI) era.
    • The NSCAI stated it “has focused its analysis and recommendations on six areas:
    • Advancing the Department of Defense’s internal AI research and development capabilities. The Department of Defense (DOD) must make reforms to the management of its research and development (R&D) ecosystem to enable the speed and agility needed to harness the potential of AI and other emerging technologies. To equip the R&D enterprise, the NSCAI recommends creating an AI software repository; improving agency- wide authorized use and sharing of software, components, and infrastructure; creating an AI data catalog; and expanding funding authorities to support DOD laboratories. DOD must also strengthen AI Test and Evaluation, Verification and Validation capabilities by developing an AI testing framework, creating tools to stand up new AI testbeds, and using partnered laboratories to test market and market-ready AI solutions. To optimize the transition from technological breakthroughs to application in the field, Congress and DOD need to reimagine how science and technology programs are budgeted to allow for agile development, and adopt the model of multi- stakeholder and multi-disciplinary development teams. Furthermore, DoD should encourage labs to collaborate by building open innovation models and a R&D database.
    • Accelerating AI applications for national security and defense. DOD must have enduring means to identify, prioritize, and resource the AI- enabled applications necessary to fight and win. To meet this challenge, the NSCAI recommends that DOD produce a classified Technology Annex to the National Defense Strategy that outlines a clear plan for pursuing disruptive technologies that address specific operational challenges. We also recommend establishing mechanisms for tactical experimentation, including by integrating AI-enabled technologies into exercises and wargames, to ensure technical capabilities meet mission and operator needs. On the business side, DOD should develop a list of core administrative functions most amenable to AI solutions and incentivize the adoption of commercially available AI tools.
    • Bridging the technology talent gap in government. The United States government must fundamentally re-imagine the way it recruits and builds a digital workforce. The Commission envisions a government-wide effort to build its digital talent base through a multi-prong approach, including: 1) the establishment of a National Reserve Digital Corps that will bring private sector talent into public service part-time; 2) the expansion of technology scholarship for service programs; and, 3) the creation of a national digital service academy for growing federal technology talent from the ground up.
    • Protecting AI advantages for national security through the discriminate use of export controls and investment screening. The United States must protect the national security sensitive elements of AI and other critical emerging technologies from foreign competitors, while ensuring that such efforts do not undercut U.S. investment and innovation. The Commission proposes that the President issue an Executive Order that outlines four principles to inform U.S. technology protection policies for export controls and investment screening, enhance the capacity of U.S. regulatory agencies in analyzing emerging technologies, and expedite the implementation of recent export control and investment screening reform legislation. Additionally, the Commission recommends prioritizing the application of export controls to hardware over other areas of AI-related technology. In practice, this requires working with key allies to control the supply of specific semiconductor manufacturing equipment critical to AI while simultaneously revitalizing the U.S. semiconductor industry and building the technology protection regulatory capacity of like-minded partners. Finally, the Commission recommends focusing the Committee on Foreign Investment in the United States (CFIUS) on preventing the transfer of technologies that create national security risks. This includes a legislative proposal granting the Department of the Treasury the authority to propose regulations for notice and public comment to mandate CFIUS filings for investments into AI and other sensitive technologies from China, Russia and other countries of special concern. The Commission’s recommendations would also exempt trusted allies and create fast tracks for vetted investors.
    • Reorienting the Department of State for great power competition in the digital age. Competitive diplomacy in AI and emerging technology arenas is a strategic imperative in an era of great power competition. Department of State personnel must have the organization, knowledge, and resources to advocate for American interests at the intersection of technology, security, economic interests, and democratic values. To strengthen the link between great power competition strategy, organization, foreign policy planning, and AI, the Department of State should create a Strategic Innovation and Technology Council as a dedicated forum for senior leaders to coordinate strategy and a Bureau of Cyberspace Security and Emerging Technology, which the Department has already proposed, to serve as a focal point and champion for security challenges associated with emerging technologies. To strengthen the integration of emerging technology and diplomacy, the Department of State should also enhance its presence and expertise in major tech hubs and expand training on AI and emerging technology for personnel at all levels across professional areas. Congress should conduct hearings to assess the Department’s posture and progress in reorienting to address emerging technology competition.
    • Creating a framework for the ethical and responsible development and fielding of AI. Agencies need practical guidance for implementing commonly agreed upon AI principles, and a more comprehensive strategy to develop and field AI ethically and responsibly. The NSCAI proposes a “Key Considerations” paradigm for agencies to implement that will help translate broad principles into concrete actions.
  • The Danish Defence Intelligence Service’s Centre for Cyber Security (CFCS) released its fifth annual assessment of the cyber threat against Denmark and concluded:
    • The cyber threat pose a serious threat to Denmark. Cyber attacks mainly carry economic and political consequences.
    • Hackers have tried to take advantage of the COVID-19 pandemic. This constitutes a new element in the general threat landscape.
    • The threat from cyber crime is VERY HIGH. No one is exempt from the threat. There is a growing threat from targeted ransomware attacks against Danish public authorities and private companies.  The threat from cyber espionage is VERY HIGH.
    • The threat is especially directed against public authorities dealing with foreign and security policy issues as well as private companies whose knowledge is of interest to foreign states. 
    • The threat from destructive cyber attacks is LOW. It is less likely that foreign states will launch destructive cyber attacks against Denmark. Private companies and public authorities operating in conflict-ridden regions are at a greater risk from this threat. 
    • The threat from cyber activism is LOW. Globally, the number of cyber activism attacks has dropped in recent years,and cyber activists rarely focus on Danish public authorities and private companies. The threat from cyber terrorism is NONE. Serious cyber attacks aimed at creating effects similar to those of conventional terrorism presuppose a level of technical expertise and organizational resources that militant extremists, at present, do not possess. Also, the intention remains limited. 
    • The technological development, including the development of artificial intelligence and quantum computing, creates new cyber security possibilities and challenges.

Further Reading

  • Accuse, Evict, Repeat: Why Punishing China and Russia for Cyberattacks Fails” – The New York Times. This piece points out that the United States (US) government is largely using 19th Century responses to address 21st Century conduct by expelling diplomats, imposing sanctions, and indicting hackers. Even a greater use of offensive cyber operations does not seem to be deterring the US’s adversaries. It may turn out that the US and other nations will need to focus more on defensive measures and securing its valuable data and information.
  • New police powers to be broad enough to target Facebook” – Sydney Morning Herald. On the heels of a 2018 law that some argue will allow the government in Canberra to order companies to decrypt users communications, Australia is considering the enactment of new legislation because of concern among the nation’s security services about end-to-end encryption and dark browsing. In particular, Facebook’s proposed changes to secure its networks is seen as fertile ground of criminals, especially those seeking to prey on children sexually.
  • The U.S. has a stronger hand in its tech battle with China than many suspect” – The Washington Post. A national security writer makes the case that the cries that the Chinese are coming may prove as overblown as similar claims made about the Japanese during the 1980s and the Russian during the Cold War. The Trump Administration has used some levers that may appear to impede the People’s Republic of China’s attempt to displace the United States. In all, this writer is calling for more balance in viewing the PRC and some of the challenges it poses.
  • Facebook is taking a hard look at racial bias in its algorithms” – Recode. After a civil rights audit that was critical of Facebook, the company is assembling and deploying teams to try to deal with the biases in its algorithms on Facebook and Instagram. Critics doubt the efforts will turn out well because economic incentives are aligned against rooting out such biases and the lack of diversity at the company.
  • Does TikTok Really Pose a Risk to US National Security?” – WIRED. This article asserts TikTok is probably no riskier than other social media apps even with the possibility that the People’s Republic of China (PRC) may have access to user data.
  • France won’t ban Huawei, but encouraging 5G telcos to avoid it: report” – Reuters. Unlike the United States, the United Kingdom, and others, France will not outright ban Huawei from their 5G networks but will instead encourage their telecommunications companies to use European manufacturers. Some companies already have Huawei equipment on the networks and may receive authorization to use the company’s equipment for up to five more years. However, France is not planning on extending authorizations past that deadline, which will function a de facto sunset. In contrast, authorizations for Ericsson or Nokia equipment were provided for eight years. The head of France’s cybersecurity agency stressed that France was not seeking to move against the People’s Republic of China (PRC) but is responding to security concerns.

© Michael Kans, Michael Kans Blog and michaelkans.blog, 2019-2020. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Michael Kans, Michael Kans Blog, and michaelkans.blog with appropriate and specific direction to the original content.

Further Reading, Other Developments, and Coming Events (22 July)

First things first, if you would like to receive my Technology Policy Update, email me. You can find some of these Updates from 2019 and 2020 here.

Here are Further Reading, Other Developments, and Coming Events.

Coming Events

  • On 22 July, the Senate Homeland Security & Governmental Affairs Committee will markup a number of bills and nominations, including:
    • The nomination of Derek Kan to the Office of Management and Budget’s Deputy Director
    • The “Federal Emergency Pandemic Response Act” (S.4204)
    • The “Securing Healthcare and Response Equipment Act of 2020” (S.4210)
    • The “National Response Framework Improvement Act of 2020” (S.4153)
    • The “National Infrastructure Simulation and Analysis Center Pandemic Modeling Act of 2020” (S.4157)
    • The “PPE Supply Chain Transparency Act of 2020” (S.4158)
    • The “REAL ID Act Modernization Act” (S.4133)
    • The “Safeguarding American Innovation Act” (S.3997)
    • The “Information Technology Modernization Centers of Excellence Program Act” (S.4200)
    • The “Telework for U.S. Innovation Act” (S.4318)
    • The “GAO Database Modernization Act” (S.____)
    • The “CFO Vision Act of 2020” (S.3287)
    • The “No Tik Tok on Government Devices Act” (S. 3455)
    • The “Cybersecurity Advisory Committee Authorization Act of 2020” (S. 4024)
  • On 23 July, the Senate Commerce, Science, and Transportation Committee’s Communications, Technology, Innovation, and the Internet Subcommittee will hold a hearing on “The State of U.S. Spectrum Policy” with the following witnesses:
    • Mr. Tom Power, Senior Vice President and General Counsel, CTIA
    • Mr. Mark Gibson, Director of Business Development, CommScope
    • Dr. Roslyn Layton, Visiting Researcher, Aalborg University
    • Mr. Michael Calabrese, Director, Wireless Future Project, Open Technology Institute at New America
  • On  27 July, the House Judiciary Committee’s Antitrust, Commercial, and Administrative Law Subcommittee will hold its sixth hearing on “Online Platforms and Market Power” titled “Examining the Dominance of Amazon, Apple, Facebook, and Google” that will reportedly have the heads of the four companies as witnesses.
  • On 6 August, the Federal Communications Commission (FCC) will hold an open meeting to likely consider the following items:
    • C-band Auction Procedures – The Commission will consider a Public Notice that would adopt procedures for the auction of new flexible-use overlay licenses in the 3.7–3.98 GHz band (Auction 107) for 5G, the Internet of Things, and other advanced wireless services. (AU Docket No. 20-25)
    • Radio Duplication Rules – The Commission will consider a Report and Order that would eliminate the radio duplication rule with regard to AM stations and retain the rule for FM stations. (MB Docket Nos. 19-310. 17-105)
    • Common Antenna Siting Rules – The Commission will consider a Report and Order that would eliminate the common antenna siting rules for FM and TV broadcaster applicants and licensees. (MB Docket Nos. 19-282, 17-105)
    • Telecommunications Relay Service – The Commission will consider a Report and Order to repeal certain TRS rules that are no longer needed in light of changes in technology and voice communications services. (CG Docket No. 03-123)
    • Inmate Calling Services – The Commission will consider a Report and Order on Remand and a Fourth Further Notice of Proposed Rulemaking that would respond to remands by the U.S. Court of Appeals for the District of Columbia Circuit and propose to comprehensively reform rates and charges for the inmate calling services within the Commission’s jurisdiction.  (WC Docket No. 12-375)

Other Developments

  • Acting Office of Management and Budget (OMB) Director Russell Vought was confirmed by the Senate by a 51-45 vote. OMB has been without a Senate-confirmed Director since Mick Mulvaney resigned at the end of March, but he was named acting White House Chief of Staff in January 2019, resulting in Vought serving as the acting OMB head since that time.
  • Former Vice President and Democratic candidate for President Joe Biden issued a statement on Russian interference with the 2020 election that laid out his plan to respond and retaliate against these ongoing activities. His very high-level plan is a list of currently used methods of combatting cyber-attacks, much of which he would be able to undertake without Congressional assent. Biden contended “[d]espite the exposure of Russia’s malign activities by the U.S. Intelligence Community, law enforcement agencies, and bipartisan Congressional committees, the Kremlin has not halted its efforts to interfere in our democracy.” Biden said “[i]n spite of President [Donald] Trump’s failure to act, America’s adversaries must not misjudge the resolve of the American people to counter every effort by a foreign power to interfere in our democracy, whether by hacking voting systems and databases, laundering money into our political system, systematically spreading disinformation, or trying to sow doubt about the integrity of our elections.” He vowed:
    • If elected president, I will treat foreign interference in our election as an adversarial act that significantly affects the relationship between the United States and the interfering nation’s government.
    • I will direct the U.S. Intelligence Community to report publicly and in a timely manner on any efforts by foreign governments that have interfered, or attempted to interfere, with U.S. elections.
    • I will direct my administration to leverage all appropriate instruments of national power and make full use of my executive authority to impose substantial and lasting costs on state perpetrators.
    • These costs could include financial-sector sanctions, asset freezes, cyber responses, and the exposure of corruption.
    • A range of other actions could also be taken, depending on the nature of the attack.
    • I will direct our response at a time and in a manner of our choosing.
    • In addition, I will take action where needed to stop attempts to interfere with U.S. elections before they can impact our democratic processes.
    • In particular, I will direct and resource the Department of Defense, Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency, the Department of State, and the Federal Bureau of Investigation’s Foreign Interference Task Force to develop plans for disrupting foreign threats to our elections process.
    • This will be done, wherever possible, in coordination with our allies and partners, so that we are isolating the regimes that seek to undermine democracies and civil liberties.
  • Top Democrats in Congress have written the Director of the Federal Bureau of Investigation (FBI) requesting “a defensive counterintelligence briefing to all Members of the House of Representatives and the Senate regarding foreign efforts to interfere in the 2020 U.S. presidential election.” Speaker of the House Nancy Pelosi (D-CA), Senate Minority Leader Chuck Schumer (D-NY), House Intelligence Committee Chair Adam Schiff (D-CA), and Senate Intelligence Committee Ranking Member Mark Warner (D-VA) sent a letter to FBI Director Christopher Wray in which they claimed “that Congress appears to be the target of a concerted foreign interference campaign, which seeks to launder and amplify disinformation in order to influence congressional activity, public debate, and the presidential election in November.”
  • District of Columbia Attorney General Karl Racine (D) has inserted himself into the struggle raging over the Trump Administration’s remaking of the United States (US) Agency for Global Media (USAGM), in part, by installing Michael Pack as the head of USAGM. He filed suit “to resolve a dispute between two dueling Boards of Directors that has paralyzed the Open Technology Fund (OTF), a District nonprofit…which supports encryption and anti-censorship tools for people living in repressive societies…an independent nonprofit corporation organized and created under District law that receives grant funding from the USAGM” per his press release. Racine claimed:
    • The USAGM CEO does not have authority over OTF’s Board or officers: OTF is an independent D.C. nonprofit corporation, which governs itself under local law and under its own bylaws. While USAGM provides grant funding for OTF’s work, it does not have authority over OTF’s governance. OAG asserts that OTF’s bylaws are clear and that only the organization’s Board of Directors—not USAGM, its leadership, or any other body—has the authority to appoint or remove OTF directors.
    • Dueling Boards have paralyzed OTF: Two Boards are currently claiming authority over OTF, and without clarity as to which Board is properly in place, the organization is effectively leaderless. It is also unable to authorize decisions necessary for carrying out its functions, including decisions to authorize funding partner organizations have already been promised, and decisions related to potential new partnership. The leadership crisis has also left employees of the organization at risk of losing their jobs.
    • The original Board of Directors is the valid Board: OAG asserts that because Pack did not have authority under either District law or OTF’s bylaws to dismiss OTF’s Board of Directors, the Court should recognize OTF’s original Board as valid.
    • Any actions taken on behalf of OTF by Michael Pack or his replacement Board should be voided: Michael Pack did not have authority as USAGM CEO to dismiss or appoint Directors on behalf of OTF. As a result, any actions Pack or the replacement Board have taken on behalf of OTF should be invalidated.
  • The Department of Commerce’s (DOC) Bureau of Industry and Security (BIS) has announced further action against entities from the People’s Republic of China (PRC) by adding “to the Entity List 11 Chinese companies implicated in human rights violations and abuses in the implementation of the PRC’s campaign of repression, mass arbitrary detention, forced labor, involuntary collection of biometric data, and genetic analyses targeted at Muslim minority groups from the Xinjiang Uyghur Autonomous Region (XUAR)” according to the agency’s press release. DOC claimed “[t]oday’s action will result in these companies facing new restrictions on access to U.S.-origin items, including commodities and technology…[and] will supplement BIS’s two tranches of Entity List designations in October 2019 and June 2020, actions that together added 37 parties engaged in or enabling PRC’s repression in Xinjiang.”

Further Reading

  • Google Promises Privacy With Virus App but Can Still Collect Location Data” – The New York Times. Google’s version of the contact racing app developed with Apple has a feature the other company does not: it prompts users to turn on the Android device’s location setting. This feature would seem to be contrary to the claims made by Google and Apple that their Bluetooth tracing system does not collect sensitive location data. In fact, the companies refused to request of the governments of the United Kingdom and France, among others, to change settings on their smartphones to allow for centralized information collection on possible COVID-19 transmission. A number of European nations have pressed Google to remove this feature, and a Google spokesperson claimed the Android Bluetooth tracing capability did not use location services, begging the question why the prompt appears.
  • Inside the Federal Trade Commission’s Facebook probe” – Axios. The anonymous sources inside the Federal Trade Commission (FTC) cautioning that the agency will not likely pursue an anti-trust action against Facebook before next year may be part of an inner-agency quarrel slowing down the inquiry. Allegedly, the FTC’s Bureau of Competition and its Office of Policy Planning are at odds over the drafting of guidance that will govern the Facebook and other anti-trust investigations. The latter wants to keep the current standards of harm to consumers in terms of price changes, which the former thinks are inapplicable in the provision of free services. How this struggle plays out may well inform the agency’s approach to Facebook and other tech companies.
  • Beware the ‘But China’ Excuses” – The New York Times. This article cautions people from putting too much stock in the claims by the Trump Administration and technology companies that the People’s Republic of China (PRC) is the seeming threat they say it is. If the PRC is such a threat, the United States might consider investing more in basic research and development (R&D) and in some critical tech sectors to develop and build their products in the US. Also the notion advanced by some tech sector CEOs that breaking up the tech giants will ultimately benefit PRC competitors is scrutinized.
  • DHS Authorizes Domestic Surveillance to Protect Statues and Monuments” – Lawfare. One of my law school professors and a colleague examine a Department of Homeland Security’s (DHS) Office of Intelligence & Analysis (I&A) that authorizes intelligence and information collection on those who present threats to monuments, memorials, and statues that seems like a Trojan Horse by which DHS could surveil and mobilize protestors in the streets of American cities. The surveillance cannot be electronic surveillance, but then DHS could ask a sister agency to conduct such activity if needed.
  • Two more cyber-attacks hit Israel’s water system” – ZDNet. It appears Iran has responded to Israel’s cyber attacks that led to a number of problems at facilities in Tehran. This is the latest in an ongoing battle between the two Middle Eastern enemies that may escalate further.

© Michael Kans, Michael Kans Blog and michaelkans.blog, 2019-2020. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Michael Kans, Michael Kans Blog, and michaelkans.blog with appropriate and specific direction to the original content.

Further Reading, Other Developments, and Coming Events (21 July)

First things first, if you would like to receive my Technology Policy Update, email me. You can find some of these Updates from 2019 and 2020 here.

Here are Further Reading, Other Developments, and Coming Events.

Coming Events

  • The Federal Trade Commission (FTC) will hold its fifth annual PrivacyCon on 21 July and has released its agenda.
  • On 22 July, the Senate Homeland Security & Governmental Affairs Committee will markup a number of bills and nominations, including:
    • The nomination of Derek Kan to the Office of Management and Budget’s Deputy Director
    • The “Federal Emergency Pandemic Response Act” (S.4204)
    • The “Securing Healthcare and Response Equipment Act of 2020” (S.4210)
    • The “National Response Framework Improvement Act of 2020” (S.4153)
    • The “National Infrastructure Simulation and Analysis Center Pandemic Modeling Act of 2020” (S.4157)
    • The “PPE Supply Chain Transparency Act of 2020” (S.4158)
    • The “REAL ID Act Modernization Act” (S.4133)
    • The “Safeguarding American Innovation Act” (S.3997)
    • The “Information Technology Modernization Centers of Excellence Program Act” (S.4200)
    • The “Telework for U.S. Innovation Act” (S.4318)
    • The “GAO Database Modernization Act” (S.____)
    • The “CFO Vision Act of 2020” (S.3287)
    • The “No Tik Tok on Government Devices Act” (S. 3455)
    • The “Cybersecurity Advisory Committee Authorization Act of 2020” (S. 4024)
  • On 23 July, the Senate Commerce, Science, and Transportation Committee’s Communications, Technology, Innovation, and the Internet Subcommittee will hold a hearing on “The State of U.S. Spectrum Policy” with the following witnesses:
    • Mr. Tom Power, Senior Vice President and General Counsel, CTIA
    • Mr. Mark Gibson, Director of Business Development, CommScope
    • Dr. Roslyn Layton, Visiting Researcher, Aalborg University
    • Mr. Michael Calabrese, Director, Wireless Future Project, Open Technology Institute at New America
  • On  27 July, the House Judiciary Committee’s Antitrust, Commercial, and Administrative Law Subcommittee will hold its sixth hearing on “Online Platforms and Market Power” titled “Examining the Dominance of Amazon, Apple, Facebook, and Google” that will reportedly have the heads of the four companies as witnesses.
  • On 6 August, the Federal Communications Commission (FCC) will hold an open meeting to likely consider the following items:
    • C-band Auction Procedures – The Commission will consider a Public Notice that would adopt procedures for the auction of new flexible-use overlay licenses in the 3.7–3.98 GHz band (Auction 107) for 5G, the Internet of Things, and other advanced wireless services. (AU Docket No. 20-25)
    • Radio Duplication Rules – The Commission will consider a Report and Order that would eliminate the radio duplication rule with regard to AM stations and retain the rule for FM stations. (MB Docket Nos. 19-310. 17-105)
    • Common Antenna Siting Rules – The Commission will consider a Report and Order that would eliminate the common antenna siting rules for FM and TV broadcaster applicants and licensees. (MB Docket Nos. 19-282, 17-105)
    • Telecommunications Relay Service – The Commission will consider a Report and Order to repeal certain TRS rules that are no longer needed in light of changes in technology and voice communications services. (CG Docket No. 03-123)
    • Inmate Calling Services – The Commission will consider a Report and Order on Remand and a Fourth Further Notice of Proposed Rulemaking that would respond to remands by the U.S. Court of Appeals for the District of Columbia Circuit and propose to comprehensively reform rates and charges for the inmate calling services within the Commission’s jurisdiction.  (WC Docket No. 12-375)

Other Developments

  • A United States court has denied a motion by an Israeli technology company to dismiss an American tech giant’s suit that the former infected its messaging system with malware for purposes of espionage and harassment. In October 2019, WhatsApp and Facebook filed suit against the Israeli security firm, NSO Group, alleging that in April 2019, it sent “malware to approximately 1,400 mobile phones and devices…designed to infect the Target Devices for the purpose of conducting surveillance of specific WhatsApp users.” This step was taken, Facebook and WhatsApp claim, in order to circumvent WhatApp’s end-to-end encryption. The social media companies are suing “for injunctive relief and damages pursuant to the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, and the California Comprehensive Computer Data Access and Fraud Act, California Penal Code § 502, and for breach of contract and trespass to chattels.” In the District Court’s ruling from last week, it rejected the NSO Group’s claims that it deserved sovereign immunity from the lawsuit because it was working for sovereign governments among others and will allow WhatsApp and Facebook to proceed with their suit.
  • The European Data Protection Supervisor (EDPS) published a report “on how EU institutions, bodies and agencies (EUIs) carry out Data Protection Impact Assessments (DPIAs) when processing information that presents a high risk to the rights and freedom of natural persons” according to the EDPS’ press release. The EDPS detailed its lessons learned, suggestions on how EU institutions could execute better DPIAs, and additional guidance on how DPIAs should be performed in the future.
  • The Court of Justice of the European Union’s (CJEU) Advocate General Saugmandsgaard Øe rendered his opinion in case concerning the possible lability of YouTube and Uploaded for a user posting copyrighted materials without the consent of the owners. In a CJEU summary, Øe found “as EU law currently stands, online platform operators, such as YouTube and Uploaded, are not directly liable for the illegal uploading of protected works by the users of those platforms.” Øe noted that “Directive  2019/790 on  copyright  and  related rights  in  the  Digital  Single  Market introduces, for online platform operators such as YouTube, a new liability regime specific to works illegally uploaded by  the  users  of  such  platforms….which  must  be  transposed  by  each Member State into its national law by 7 June 2021at the latest, requires, inter alia, those operators to obtain an authorisation from the rightholders, for example by concluding a licensing agreement, for the works uploaded by users of their platforms.” The Advocate General’s decisions are not binding but work to inform the CJEU as it decides cases, but it is not uncommon for the CJEU to incorporate the Advocate General’s findings in their decisions.
  • The United Kingdom’s Parliament’s House of Lords’ Select Committee on Democracy and Digital Technologies released its report regarding “a pandemic of ‘misinformation’ and ‘disinformation’…[that] [i]f allowed to flourish these counterfeit truths will result in the collapse of public trust, and without trust democracy as we know it will simply decline into irrelevance.” The committee explained the report “addresses a number of concerns, including the urgent case for reform of electoral law and our overwhelming need to become a digitally literate society” including “forty-five  recommendations  which,  taken  together,  we  believe could serve as a useful response to a whole series of concerns.”
  • Belgium’s data protection authority, the Autorité de protection des données, has fined Google €600,000 for violations related to the company’s failure to heed the right to be forgotten as enforced under the General Data Protection Regulation (GDPR).  
  • The National Institute of Standards and Technology (NIST) released two crosswalks undertaken by outside entities comparing the NIST Privacy Framework: A Tool for Improving Privacy through Enterprise Risk Management to the General Data Protection Regulation (GDPR) and ISO/IEC 27701, private sector privacy guidance:
    • The Enterprivacy Consulting Group’s crosswalk for the GDPR-Regulation 2016/679.
  • Senator Josh Hawley (R-MO) sent Twitter CEO Jack Dorsey a second letter regarding the Twitter hack and asserted:
    • [R]eports also indicate that screenshots of Twitter’s internal tools have been circulating within the hacking community. One such screenshot indicates that Twitter employs tools allowing it to append “Search Blacklist,” “Trends Blacklist,” “Bounced,” and “ReadOnly” flags to user accounts. Given your insistence in testimony to Congress that Twitter does not engage in politically biased “shadowbanning” and the public interest in Twitter’s moderation practices, it is notable that Twitter reportedly suspended user accounts sharing screenshots of this panel.
    • Hawley posed a series of questions seeking to root out a bias against conservative viewpoints on the platform, a frequently leveled charge.
  • The Ranking Members of the House Foreign Affairs Committee, House Energy and Commerce Committee, and House Financial Services Committee wrote President Donald Trump to “encourage you to consider utilizing your ability under existing authorities to sanction PRC-linked hackers” for “targeting U.S. institutions and “attempting to identify and illicitly obtain valuable intellectual property (IP) and public health data related to vaccines, treatments, and testing from networks and personnel affiliated with COVID-19-related research.” In a May unclassified public service announcement, the Federal Bureau of Investigation (FBI) and CISA named the People’s Republic of China as a nation waging a cyber campaign against U.S. COVID-19 researchers. The agencies stated they “are issuing this announcement to raise awareness of the threat to COVID-19-related research.” Last week, The United Kingdom’s National Cyber Security Centre (NCSC), Canada’s Communications  Security Establishment (CSE), United States’ National Security Agency (NSA) and the United States’ Department of Homeland Security’s Cybersecurity and Infrastructure Security  Agency (CISA) issued a joint advisory on a Russian hacking organization’s efforts have “targeted various organisations involved in COVID-19 vaccine development in Canada, the United States and the United Kingdom, highly likely with the intention of stealing information and intellectual property relating to the development and testing of COVID-19 vaccines.”

Further Reading

  • Twitter’s security holes are now the nation’s problem“ – Politico; “Twitter hack triggers investigations and lawmaker concerns” – The Washington Post; “Hackers Convinced Twitter Employee to Help Them Hijack Accounts” – Vice’s Motherboard; “Twitter Struggles to Unpack a Hack Within Its Walls” and “Hackers Tell the Story of the Twitter Attack From the Inside” – The New York Times. After the hacking last week that took over a number of high profile people’s accounts (e.g. Barack Obama, Bill Gates, Elon Musk, etc.), policymakers in Washington are pressing Twitter for explanations and remediation to prevent any such future attacks, especially in the run up to the 2020 election. Reportedly, a group of hackers looking to push a Bitcoin scam took over accounts of famous people and then made it appear they were selling Bitcoin. Republicans and Democrats in the United States’ capital are alarmed that such a hack by another nation could throw the country and world into chaos. One media outlet is reporting the hackers provided proof they bribed a Twitter employee with access to administrative credentials to pull off the hack. Another is reporting that a hacker got into Twitter’s Slack channel where the credentials were posted. Nonetheless, the Federal Bureau of Investigation (FBI) has opened an inquiry. It is unclear whether the hackers accessed people’s DM’s, and Senator Ron Wyden (D-OR) noted he has secured a commitment from the company in 2018 to use encryption to secure DMs that has not yet been implemented. The company will have to answer more tough questions at a time when it is in the crosshairs of the rump Administration for alleged abuses of 47 U.S.C. 230 in stifling conservative viewpoints after the platform fact checked the President and has taken down a range of accounts. And, of course, working in the background is the company’s 2011 settlement with the Federal Trade Commission (FTC) in which the agency claimed Twitter violated the FTC Act by “engag[ing] in a number of practices that, taken together, failed to provide reasonable and appropriate security to: prevent unauthorized access to nonpublic user information and honor the privacy choices exercised by its users in designating certain tweets as nonpublic…[and by] fail[ing] to prevent unauthorized administrative control of the Twitter system.” If the agency investigates and finds similar misconduct, they could seek sizeable monetary damages in federal court.
  • F.T.C.’s Facebook Investigation May Stretch Past Election” – The New York Times. Even though media accounts say the United States Department of Justice will bring an antitrust action against Google possibly as early as this month, it now appears the Federal Trade Commission (FTC) will not be bringing a case against Facebook until next year. It appears the agency is weighing whether it should depose CEO Mark Zuckerberg and COO Sheryl Sandberg and has made additional rounds of document requests, all of which has reportedly slowed down the investigation. Of course, should the investigation stretch into next year, a President Joe Biden could designate a new chair of the agency, which could change the scope and tenor of the investigation.
  • New Emails Reveal Warm Relationship Between Kamala Harris And Big Tech” – HuffPost. Obtained via an Freedom of Information request, new email from Senator Kamala Harris’ (D-CA) tenure as her state’s attorney general suggest she was willing to overlook the role Facebook, Google, and others played and still play in one of her signature issues: revenge porn. This article makes the case Harris came down hard on a scammer running a revenge porn site but did not press the tech giants with any vigor to take down such material from their platforms. Consequently, the case is made if Harris is former Vice President Joe Biden’s vice presidential candidate, this would signal a go easy approach on large companies even though many Democrats have been calling to break up these companies and vigorously enforce antitrust laws. Harris has largely not engaged on tech issues during her tenure in the Senate. To be fair, many of these companies are headquartered in California and pump billions of dollars into the state’s economy annually, putting Harris in a tricky position politically. Of course, such pieces should be taken with a grain of salt since it may have been suggested or planted by one of Harris’ rivals for the vice president nomination or someone looking to settle a score.
  • Inside Big Tech’s Years-Long Manipulation Of American Op-Ed Pages” – Big Technology from Alan Krantowitz. To no great surprise, large technology companies have adopted a widely used tactic of getting someone sympathetic to “write” an op-ed for a local newspaper to show it is not just big companies pushing for a policy. In this case, it was, and likely still is, the argument against breaking up the tech giants or regulating them more closely. In one case, it is not clear the person who allegedly “wrote” the article actually even knew about it.
  • Trump campaign pushes Facebook ads bashing TikTok” – CNN. The White House is using new means to argue TikTok poses a threat to Americans and national security: advertisements on Facebook by the Trump campaign. The ads repeated the same basic message that has been coming out of the White House that TikTok has been denying: that the app collects and sends user sensitive user data to the People’s Republic of China (PRC). Another wrinkle TikTok pointed to is that Facebook is readying a competitor, Instagram Reels, set to be unveiled as early as this week.

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Further Reading and Other Developments (17 July)

First things first, if you would like to receive my Technology Policy Update, email me. You can find some of these Updates from 2019 and 2020 here.

Speaking of which, the Technology Policy Update is being published daily during the week, and here are the Other Developments and Further Reading from this week.

Other Developments

  • Acting Senate Intelligence Committee Chair Marco Rubio (R-FL), Senate Foreign Relations Committee Chair Jim Risch (R-ID), and Senators Chris Coons (D-DE) and John Cornyn (R-TX) wrote Secretary of Commerce Wilbur Ross and Secretary of Defense Mike Esper “to ask that the Administration take immediate measures to bring the most advanced digital semiconductor manufacturing capabilities to the United States…[which] are critical to our American economic and national security and while our nation leads in the design of semiconductors, we rely on international manufacturing for advanced semiconductor fabrication.” This letter follows the Trump Administration’s May announcement that the Taiwan Semiconductor Manufacturing Corporation (TSMC) agreed to build a $12 billion plant in Arizona. It also bears note that one of the amendments pending to the “National Defense Authorization Act for Fiscal Year 2021“ (S.4049) would establish a grants program to stimulate semiconductor manufacturing in the US.
  • Senators Mark R. Warner (D-VA), Mazie K. Hirono (D-HI) and Bob Menendez (D-NJ) sent a letter to Facebook “regarding its failure to prevent the propagation of white supremacist groups online and its role in providing such groups with the organizational infrastructure and reach needed to expand.” They also “criticized Facebook for being unable or unwilling to enforce its own Community Standards and purge white supremacist and other violent extremist content from the site” and posed “a series of questions regarding Facebook’s policies and procedures against hate speech, violence, white supremacy and the amplification of extremist content.”
  • The Department of Homeland Security’s (DHS) Cybersecurity and Infrastructure Security Agency (CISA) published the Pipeline Cyber Risk Mitigation Infographic that was “[d]eveloped in coordination with the Transportation Security Administration (TSA)…[that] outlines activities that pipeline owners/operators can undertake to improve their ability to prepare for, respond to, and mitigate against malicious cyber threats.”
  • Representative Kendra Horn (D-OK) and 10 other Democrats introduced legislation “requiring the U.S. government to identify, analyze, and combat efforts by the Chinese government to exploit the COVID-19 pandemic” that was endorsed by “[t]he broader Blue Dog Coalition” according to their press release. The “Preventing China from Exploiting COVID-19 Act” (H.R.7484) “requires the Director of National Intelligence—in coordination with the Secretaries of Defense, State, and Homeland Security—to prepare an assessment of the different ways in which the Chinese government has exploited or could exploit the pandemic, which originated in China, in order to advance China’s interests and to undermine the interests of the United States, its allies, and the rules-based international order.” Horn and her cosponsors stated “[t]he assessment must be provided to Congress within 90 days and posted in unclassified form on the DNI’s website.”
  • The Supreme Court of Canada upheld the “Genetic Non-Discrimination Act” and denied a challenge to the legality of the statute brought by the government of Quebec, the Attorney General of Canada, and others. The court found:
    • The pith and substance of the challenged provisions is to protect individuals’ control over their detailed personal information disclosed by genetic tests, in the broad areas of contracting and the provision of goods and services, in order to address Canadians’ fears that their genetic test results will be used against them and to prevent discrimination based on that information. This matter is properly classified within Parliament’s power over criminal law. The provisions are supported by a criminal law purpose because they respond to a threat of harm to several overlapping public interests traditionally protected by the criminal law — autonomy, privacy, equality and public health.
  • The U.S.-China Economic and Security Review Commission published a report “analyzing the evolution of U.S. multinational enterprises (MNE) operations in China from 2000 to 2017.” The Commission found MNE’s operations in the People’s Republic of China “may indirectly erode the  United  States’  domestic industrial competitiveness  and  technological  leadership relative  to  China” and “as U.S. MNE activity in China increasingly focuses on the production of high-end technologies, the risk  that  U.S.  firms  are  unwittingly enabling China to  achieve  its industrial  policy and  military  development objectives rises.”
  • The Federal Communications Commission (FCC) and Huawei filed their final briefs in their lawsuit before the United States Court of Appeals for the Fifth Circuit arising from the FCC’s designation of Huawei as a “covered company” for purposes of a rule that denies Universal Service Funds (USF) “to purchase or obtain any equipment or services produced or provided by a covered company posing a national security threat to the integrity of communications networks or the communications supply chain.” Huawei claimed in its brief that “[t]he rulemaking and “initial designation” rest on the FCC’s national security judgments..[b]ut such judgments fall far afield of the FCC’s statutory  authority  and  competence.” Huawei also argued “[t]he USF rule, moreover, contravenes the Administrative Procedure Act (APA) and the Due Process Clause.” The FCC responded in its filing that “Huawei challenges the FCC’s decision to exclude carriers whose networks are vulnerable to foreign interference, contending that the FCC has neither statutory nor constitutional authority to make policy judgments involving “national security”…[but] [t]hese arguments are premature, as Huawei has not yet been injured by the Order.” The FCC added “Huawei’s claim that the Communications Act textually commits all policy determinations with national security implications to the President is demonstrably false.”
  • European Data Protection Supervisor (EDPS) Wojciech Wiewiórowski released his Strategy for 2020-2024, “which will focus on Digital Solidarity.” Wiewiórowski explained that “three core pillars of the EDPS strategy outline the guiding actions and objectives for the organisation to the end of 2024:
    • Foresight: The EDPS will continue to monitor legal, social and technological advances around the world and engage with experts, specialists and data protection authorities to inform its work.
    • Action: To strengthen the EDPS’ supervision, enforcement and advisory roles the EDPS will promote coherence in the activities of enforcement bodies in the EU and develop tools to assist the EU institutions, bodies and agencies to maintain the highest standards in data protection.
    • Solidarity: While promoting digital justice and privacy for all, the EDPS will also enforce responsible and sustainable data processing, to positively impact individuals and maximise societal benefits in a just and fair way.
  • Facebook released a Civil Rights Audit, an “investigation into Facebook’s policies and practices began in 2018 at the behest and encouragement of the civil rights community and some members of Congress.” Those charged with conducting the audit explained that they “vigorously advocated for more and would have liked to see the company go further to address civil rights concerns in a host of areas that are described in detail in the report” including but not limited to
    • A stronger interpretation of its voter suppression policies — an interpretation that makes those policies effective against voter suppression and prohibits content like the Trump voting posts — and more robust and more consistent enforcement of those policies leading up to the US 2020 election.
    • More visible and consistent prioritization of civil rights in company decision-making overall.
    • More resources invested to study and address organized hate against Muslims, Jews and other targeted groups on the platform.
    • A commitment to go beyond banning explicit references to white separatism and white nationalism to also prohibit express praise, support and representation of white separatism and white nationalism even where the terms themselves are not used.
    • More concrete action and specific commitments to take steps to address concerns about algorithmic bias or discrimination.
    • They added that “[t]his report outlines a number of positive and consequential steps that the company has taken, but at this point in history, the Auditors are concerned that those gains could be obscured by the vexing and heartbreaking decisions Facebook has made that represent significant setbacks for civil rights.”
  • The National Security Commission on Artificial Intelligence (NSCAI) released a white paper titled “The Role of AI Technology in Pandemic Response and Preparedness” that “outlines a series of investments and initiatives that the United States must undertake to realize the full potential of AI to secure our nation against pandemics.” NSCAI noted its previous two white papers:
  • Secretary of Defense Mark Esper announced that Chief Technology Officer Michael J.K. Kratsios has “been designated to serve as Acting Under Secretary of Defense for Research and Engineering” even though he does not have a degree in science. The last Under Secretary held a PhD. However, Kratsios worked for venture capitalist Peter Thiel who backed President Donald Trump when he ran for office in 2016.
  • The United States’ Department of Transportation’s Federal Railroad Administration (FRA) issued research “to develop a cyber security risk analysis methodology for communications-based connected railroad technologies…[and] [t]he use-case-specific implementation of the methodology can identify potential cyber attack threats, system vulnerabilities, and consequences of the attack– with risk assessment and identification of promising risk mitigation strategies.”
  • In a blog post, a National Institute of Standards and Technology (NIST) economist asserted cybercrime may be having a much larger impact on the United States’ economy than previously thought:
    • In a recent NIST report, I looked at losses in the U.S. manufacturing industry due to cybercrime by examining an underutilized dataset from the Bureau of Justice Statistics, which is the most statistically reliable data that I can find. I also extended this work to look at the losses in all U.S. industries. The data is from a 2005 survey of 36,000 businesses with 8,079 responses, which is also by far the largest sample that I could identify for examining aggregated U.S. cybercrime losses. Using this data, combined with methods for examining uncertainty in data, I extrapolated upper and lower bounds, putting 2016 U.S. manufacturing losses to be between 0.4% and 1.7% of manufacturing value-added or between $8.3 billion and $36.3 billion. The losses for all industries are between 0.9% and 4.1% of total U.S. gross domestic product (GDP), or between $167.9 billion and $770.0 billion. The lower bound is 40% higher than the widely cited, but largely unconfirmed, estimates from McAfee.
  • The Government Accountability Office (GAO) advised the Federal Communications Commission (FCC) that it needs a comprehensive strategy for implementing 5G across the United States. The GAO concluded
    • FCC has taken a number of actions regarding 5G deployment, but it has not clearly developed specific and measurable performance goals and related measures–with the involvement of relevant stakeholders, including National Telecommunications and Information Administration (NTIA)–to manage the spectrum demands associated with 5G deployment. This makes FCC unable to demonstrate whether the progress being made in freeing up spectrum is achieving any specific goals, particularly as it relates to congested mid-band spectrum. Additionally, without having established specific and measurable performance goals with related strategies and measures for mitigating 5G’s potential effects on the digital divide, FCC will not be able to assess the extent to which its actions are addressing the digital divide or what actions would best help all Americans obtain access to wireless networks.
  • The Department of Homeland Security’s (DHS) Cybersecurity and Infrastructure Security Agency (CISA) issued “Time Guidance for Network Operators, Chief Information Officers, and Chief Information Security Officers” “to inform public and private sector organizations, educational institutions, and government agencies on time resilience and security practices in enterprise networks and systems…[and] to address gaps in available time testing practices, increasing awareness of time-related system issues and the linkage between time and cybersecurity.”
  • Fifteen Democratic Senators sent a letter to the Department of Defense, Office of the Director of National Intelligence (ODNI), Department of Homeland Security (DHS), Federal Bureau of Investigations (FBI), and U.S. Cyber Command, urging them “to take additional measures to fight influence campaigns aimed at disenfranchising voters, especially voters of color, ahead of the 2020 election.” They called on these agencies to take “additional measures:”
    • The American people and political candidates are promptly informed about the targeting of our political processes by foreign malign actors, and that the public is provided regular periodic updates about such efforts leading up to the general election.
    • Members of Congress and congressional staff are appropriately and adequately briefed on continued findings and analysis involving election related foreign disinformation campaigns and the work of each agency and department to combat these campaigns.
    • Findings and analysis involving election related foreign disinformation campaigns are shared with civil society organizations and independent researchers to the maximum extent which is appropriate and permissible.
    • Secretary Esper and Director Ratcliffe implement a social media information sharing and analysis center (ISAC) to detect and counter information warfare campaigns across social media platforms as authorized by section 5323 of the Fiscal Year 2020 National Defense Authorization Act.
    • Director Ratcliffe implement the Foreign Malign Influence Response Center to coordinate a whole of government approach to combatting foreign malign influence campaigns as authorized by section 5322 of the Fiscal Year 2020 National Defense Authorization Act.
  • The Information Technology and Innovation Foundation (ITIF) unveiled an issue brief “Why New Calls to Subvert Commercial Encryption Are Unjustified” arguing “that government efforts to subvert encryption would negatively impact individuals and businesses.” ITIF offered these “key takeaways:”
    • Encryption gives individuals and organizations the means to protect the confidentiality of their data, but it has interfered with law enforcement’s ability to prevent and investigate crimes and foreign threats.
    • Technological advances have long frustrated some in the law enforcement community, giving rise to multiple efforts to subvert commercial use of encryption, from the Clipper Chip in the 1990s to the San Bernardino case two decades later.
    • Having failed in these prior attempts to circumvent encryption, some law enforcement officials are now calling on Congress to invoke a “nuclear option”: legislation banning “warrant-proof” encryption.
    • This represents an extreme and unjustified measure that would do little to take encryption out of the hands of bad actors, but it would make commercial products less secure for ordinary consumers and businesses and damage U.S. competitiveness.
  • The White House released an executive order in which President Donald Trump determined “that the Special Administrative Region of Hong Kong (Hong Kong) is no longer sufficiently autonomous to justify differential treatment in relation to the People’s Republic of China (PRC or China) under the particular United States laws and provisions thereof set out in this order.” Trump further determined “the situation with respect to Hong Kong, including recent actions taken by the PRC to fundamentally undermine Hong Kong’s autonomy, constitutes an unusual and extraordinary threat, which has its source in substantial part outside the United States, to the national security, foreign policy, and economy of the United States…[and] I hereby declare a national emergency with respect to that threat.” The executive order would continue the Administration’s process of changing policy to ensure Hong Kong is treated the same as the PRC.
  • President Donald Trump also signed a bill passed in response to the People’s Republic of China (PRC) passing legislation the United States and other claim will strip Hong Kong of the protections the PRC agreed to maintain for 50 years after the United Kingdom (UK) handed over the city. The “Hong Kong Autonomy Act” “requires the imposition of sanctions on Chinese individuals and banks who are included in an annual State Department list found to be subverting Hong Kong’s autonomy” according to the bill’s sponsor Representative Brad Sherman (D-CA).
  • Representative Stephen Lynch, who chairs House Oversight and Reform Committee’s National Security Subcommittee, sent letters to Apple and Google “after the Office of the Director of National Intelligence (ODNI) and the Federal Bureau of Investigation (FBI) confirmed that mobile applications developed, operated, or owned by foreign entities, including China and Russia, could potentially pose a national security risk to American citizens and the United States” according to his press release. He noted in letters sent by the technology companies to the Subcommittee that:
    • Apple confirmed that it does not require developers to submit “information on where user data (if any such data is collected by the developer’s app) will be housed” and that it “does not decide what user data a third-party app can access, the user does.”
    • Google stated that it does “not require developers to provide the countries in which their mobile applications will house user data” and acknowledged that “some developers, especially those with a global user base, may store data in multiple countries.”
    • Lynch is seeking “commitments from Apple and Google to require information from application developers about where user data is stored, and to make users aware of that information prior to downloading the application on their mobile devices.”
  • Minnesota Attorney General Keith Ellison announced a settlement with Frontier Communications that “concludes the three major investigations and lawsuits that the Attorney General’s office launched into Minnesota’s major telecoms providers for deceptive, misleading, and fraudulent practices.” The Office of the Attorney General (OAG) stated
    • Based on its investigation, the Attorney General’s Office alleged that Frontier used a variety of deceptive and misleading practices to overcharge its customers, such as: billing customers more than they were quoted by Frontier’s agents; failing to disclose fees and surcharges in its sales presentations and advertising materials; and billing customers for services that were not delivered.
    • The OAG “also alleged that Frontier sold Minnesotans expensive internet services with so-called “maximum speed” ratings that were not attainable, and that Frontier improperly advertised its service as “reliable,” when in fact it did not provide enough bandwidth for customers to consistently receive their expected service.”
  • The European Data Protection Board (EDPB) issued guidelines “on the criteria of the Right to be Forgotten in the search engines cases under the GDPR” that “focuses solely on processing by search engine providers and delisting requests  submitted by data subjects” even Article 17 of the General Data Protection Regulation applies to all data controllers. The EDPB explained “This paper is divided into two topics:
    • The first topic concerns the grounds a data subject can rely on for a delisting request sent to a search engine provider pursuant to Article 17.1 GDPR.
    • The second topic concerns the exceptions to the Right to request delisting according to Article 17.3 GDPR.
  • The Australian Competition & Consumer Commission (ACCC) “is seeking views on draft Rules and accompanying draft Privacy Impact Assessment that authorise third parties who are accredited at the ‘unrestricted’ level to collect Consumer Data Right (CDR) data on behalf of another accredited person.” The ACCC explained “[t]his will allow accredited persons to utilise other accredited parties to collect CDR data and provide other services that facilitate the provision of goods and services to consumers.” In a March explanatory statement, the ACCC stated “[t]he CDR is an economy-wide reform that will apply sector-by-sector, starting with the banking sector…[and] [t]he objective of the CDR is to provide individual and business consumers (consumers) with the ability to efficiently and conveniently access specified data held about them by businesses (data holders), and to authorise the secure disclosure of that data to third parties (accredited data recipients) or to themselves.” The ACCC noted “[t]he CDR is regulated by both the ACCC and the Office of the Australian Information Commissioner (OAIC) as it concerns both competition and consumer matters as well as the privacy and confidentiality of consumer data.” Input is due by 20 July.
  • Office of the Inspector General (OIG) for the Department of the Interior (Interior) found that even though the agency spends $1.4 billion annually on cybersecurity “[g]uarding against increasing cybersecurity threats” remains one of Interior’s top challenges. The OIG asserted Interior “continues to struggle to implement an enterprise information technology (IT) security program that balances compliance, cost, and risk while enabling bureaus to meet their diverse missions.”
  • In a summary of its larger investigation into “Security over Information Technology Peripheral Devices at Select Office of Science Locations,” the Department of Energy’s Office of the Inspector General (OIG) that “identified weaknesses related to access controls and configuration settings” for peripheral devices (e.g. thumb drives, printers, scanners and other connected devices)  “similar in type to those identified in prior evaluations of the Department’s unclassified cybersecurity program.”
  • The House Homeland Security Committee’s Cybersecurity, Infrastructure Protection, and Innovation Subcommittee Ranking Member John Katko (R-NY) “a comprehensive national cybersecurity improvement package” according to his press release, consisting of these bills:
    • The “Cybersecurity and Infrastructure Security Agency Director and Assistant Directors Act:”  This bipartisan measure takes steps to improve guidance and long-term strategic planning by stabilizing the CISA Director and Assistant Directors positions. Specifically, the bill:
      • Creates a 5-year term for the CISA Director, with a limit of 2 terms. The term of office for the current Director begins on date the Director began to serve.
      • Elevates the Director to the equivalent of a Deputy Secretary and Military Service Secretaries.
      • Depoliticizes the Assistant Director positions, appointed by the Secretary of the Department of Homeland Security (DHS), categorizing them as career public servants. 
    • The “Strengthening the Cybersecurity and Infrastructure Security Agency Act of 2020:” This measure mandates a comprehensive review of CISA in an effort to strengthen its operations, improve coordination, and increase oversight of the agency. Specifically, the bill:
      • Requires CISA to review how additional appropriations could be used to support programs for national risk management, federal information systems management, and public-private cybersecurity and integration. It also requires a review of workforce structure and current facilities and projected needs. 
      • Mandates that CISA provides a report to the House and Senate Homeland Committees within 1-year of enactment. CISA must also provide a report and recommendations to GSA on facility needs. 
      • Requires GSA to provide a review to the Administration and House and Senate Committees on CISA facilities needs within 30-days of Congressional report. 
    • The “CISA Public-Private Talent Exchange Act:” This bill requires CISA to create a public-private workforce program to facilitate the exchange of ideas, strategies, and concepts between federal and private sector cybersecurity professionals. Specifically, the bill:
      • Establishes a public-private cyber exchange program allowing government and industry professionals to work in one another’s field.
      • Expands existing private outreach and partnership efforts. 
  • The Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) is ordering United States federal civilian agencies “to apply the July 2020 Security Update for Windows Servers running DNS (CVE-2020-1350), or the temporary registry-based workaround if patching is not possible within 24 hours.” CISA stated “[t]he software update addresses a significant vulnerability where a remote attacker could exploit it to take control of an affected system and run arbitrary code in the context of the Local System Account.” CISA Director Christopher Krebs explained “due to the wide prevalence of Windows Server in civilian Executive Branch agencies, I’ve determined that immediate action is necessary, and federal departments and agencies need to take this remote code execution vulnerability in Windows Server’s Domain Name System (DNS) particularly seriously.”
  • The United States (US) Department of State has imposed “visa restrictions on certain employees of Chinese technology companies that provide material support to regimes engaging in human rights abuses globally” that is aimed at Huawei. In its statement, the Department stated “Companies impacted by today’s action include Huawei, an arm of the Chinese Communist Party’s (CCP) surveillance state that censors political dissidents and enables mass internment camps in Xinjiang and the indentured servitude of its population shipped all over China.” The Department claimed “[c]ertain Huawei employees provide material support to the CCP regime that commits human rights abuses.”
  • Earlier in the month, the US Departments of State, Treasury, Commerce, and of Homeland Security issued an “advisory to highlight the harsh repression in Xinjiang.” The agencies explained
    • Businesses, individuals, and other persons, including but not limited to academic institutions, research service providers, and investors (hereafter “businesses and individuals”), that choose to operate in Xinjiang or engage with entities that use labor from Xinjiang elsewhere in China should be aware of reputational, economic, and, in certain instances, legal, risks associated with certain types of involvement with entities that engage in human rights abuses, which could include Withhold Release Orders (WROs), civil or criminal investigations, and export controls.
  • The United Kingdom’s National Cyber Security Centre (NCSC), Canada’s Communications  Security Establishment (CSE), United States’ National Security Agency (NSA) and the United States’ Department of Homeland Security’s Cybersecurity and Infrastructure Security  Agency (CISA) issued a joint advisory on a Russian hacking organization’s efforts have “targeted various organisations involved in COVID-19 vaccine development in Canada, the United States and the United Kingdom, highly likely with the intention of stealing information and intellectual property relating to the development and testing of COVID-19 vaccines.” The agencies named APT29 (also known as ‘the Dukes’ or ‘Cozy Bear’), “a cyber espionage group, almost certainly part of the Russian intelligence services,” as the culprit behind “custom malware known as ‘WellMess’ and ‘WellMail.’”
    • This alert follows May advisories issued by Australia, the US, and the UK on hacking threats related to the pandemic. Australia’s Department of Foreign Affairs and Trade (DFAT) and the Australian Cyber Security Centre (ACSC) issued “Advisory 2020-009: Advanced Persistent Threat (APT) actors targeting Australian health sector organisations and COVID-19 essential services” that asserted “APT groups may be seeking information and intellectual property relating to vaccine development, treatments, research and responses to the outbreak as this information is now of higher value and priority globally.” CISA and NCSC issued a joint advisory for the healthcare sector, especially companies and entities engaged in fighting COVID-19. The agencies stated that they have evidence that Advanced Persistent Threat (APT) groups “are exploiting the COVID-19 pandemic as part of their cyber operations.” In an unclassified public service announcement, the Federal Bureau of Investigation (FBI) and CISA named the People’s Republic of China as a nation waging a cyber campaign against U.S. COVID-19 researchers. The agencies stated they “are issuing this announcement to raise awareness of the threat to COVID-19-related research.”
  • The National Initiative for Cybersecurity Education (NICE) has released a draft National Institute of Standards and Technology (NIST) Special Publication (SP) for comment due by 28 August. Draft NIST Special Publication (SP) 800-181 Revision 1, Workforce Framework for Cybersecurity (NICE Framework) that features several updates, including:
    • an updated title to be more inclusive of the variety of workers who perform cybersecurity work,
    • definition and normalization of key terms,
    • principles that facilitate agility, flexibility, interoperability, and modularity,
    • introduction of competencies,
  • Representatives Glenn Thompson (R-PA), Collin Peterson (D-MN), and James Comer (R-KY) sent a letter to Federal Communications Commission (FCC) “questioning the Commission’s April 20, 2020 Order granting Ligado’s application to deploy a terrestrial nationwide network to provide 5G services.”
  • The European Commission (EC) is asking for feedback on part of its recently released data strategy by 31 July. The EC stated it is aiming “to create a single market for data, where data from public bodies, business and citizens can be used safely and fairly for the common good…[and] [t]his initiative will draw up rules for common European data spaces (covering areas like the environment, energy and agriculture) to:
    • make better use of publicly held data for research for the common good
    • support voluntary data sharing by individuals
    • set up structures to enable key organisations to share data.
  • The United Kingdom’s Parliament is asking for feedback on its legislative proposal to regulate Internet of Things (IoT) devices. The Department for Digital, Culture, Media & Sport explained “the obligations within the government’s proposed legislative framework would fall mainly on the manufacturer if they are based in the UK, or if not based in the UK, on their UK representative.” The Department is also “developing an enforcement approach with relevant stakeholders to identify an appropriate enforcement body to be granted day to day responsibility and operational control of monitoring compliance with the legislation.” The Department also touted the publishing of the European Telecommunications Standards Institute’s (ETSI) “security baseline for Internet-connected consumer devices and provides a basis for future Internet of Things product certification schemes.”
  • Facebook issued a white paper, titled “CHARTING A WAY FORWARD: Communicating Towards People-Centered and Accountable Design About Privacy,” in which the company states its desire to be involved in shaping a United States privacy law (See below for an article on this). Facebook concluded:
    • Facebook recognizes the responsibility we have to make sure that people are informed about the data that we collect, use, and share.
    • That’s why we support globally consistent comprehensive privacy laws and regulations that, among other things, establish people’s basic rights to be informed about how their information is collected, used, and shared, and impose obligations for organizations to do the same, including the obligation to build internal processes that maintain accountability.
    • As improvements to technology challenge historic approaches to effective communications with people about privacy, companies and regulators need to keep up with changing times.
    • To serve the needs of a global community, on both the platforms that exist now and those that are yet to be developed, we want to work with regulators, companies, and other interested third parties to develop new ways of informing people about their data, empowering them to make meaningful choices, and holding ourselves accountable.
    • While we don’t have all the answers, there are many opportunities for businesses and regulators to embrace modern design methods, new opportunities for better collaboration, and innovative ways to hold organizations accountable.
  • Four Democratic Senators sent Facebook a letter “about reports that Facebook has created fact-checking exemptions for people and organizations who spread disinformation about the climate crisis on its social media platform” following a New York Times article this week on the social media’s practices regarding climate disinformation. Even though the social media giant has moved aggressively to take down false and inaccurate COVID-19 posts, climate disinformation lives on the social media platform largely unmolested for a couple of reasons. First, Facebook marks these sorts of posts as opinion and take the approach that opinions should be judged under an absolutist free speech regime. Moreover, Facebook asserts posts of this sort do not pose any imminent harm and therefore do not need to be taken down. Despite having teams of fact checkers to vet posts of demonstrably untrue information, Facebook chooses not to, most likely because material that elicits strong reactions from users drive engagement that, in turn, drives advertising dollars. Senators Elizabeth Warren (D-WA), Tom Carper (D-DE), Sheldon Whitehouse (D-R.I.) and Brian Schatz (D-HI) argued “[i]f Facebook is truly “committed to fighting the spread of false news on Facebook and Instagram,” the company must immediately acknowledge in its fact-checking process that the climate crisis is not a matter of opinion and act to close loopholes that allow climate disinformation to spread on its platform.” They posed a series of questions to Facebook CEO Mark Zuckerberg on these practices, requesting answers by 31 July.
  • A Canadian court has found that the Canadian Security Intelligence Service (CSIS) “admittedly collected information in a manner that is contrary to this foundational commitment and then relied on that information in applying for warrants under the Canadian Security Intelligence Service Act, RSC 1985, c C-23 [CSIS Act]” according to a court summary of its redacted decision. The court further stated “[t]he Service and the Attorney General also admittedly failed to disclose to the Court the Service’s reliance on information that was likely collected unlawfully when seeking warrants, thereby breaching the duty of candour owed to the Court.” The court added “[t]his is not the first time this Court has been faced with a breach of candour involving the Service…[and] [t]he events underpinning this most recent breach were unfolding as recommendations were being implemented by the Service and the Attorney General to address previously identified candour concerns.” CSIS was found to have illegally collected and used metadata in a 2016 case ion its conduct between 2006-2016. In response to the most recent ruling, CSIS is vowing to implement a range of reforms. The National Security and Intelligence Review Agency (NSIRA) is pledging the same.
  • The United Kingdom’s National Police Chiefs’ Council (NPCC) announced the withdrawal of “[t]he ‘Digital device extraction – information for complainants and witnesses’ form and ‘Digital Processing Notice’ (‘the relevant forms’) circulated to forces in February 2019 [that] are not sufficient for their intended purpose.” In mid-June, the UK’s data protection authority, the Information Commissioner’s Office (ICO) unveiled its “finding that police data extraction practices vary across the country, with excessive amounts of personal data often being extracted, stored, and made available to others, without an appropriate basis in existing data protection law.” This withdrawal was also due, in part, to a late June Court of Appeal decision.  
  • A range of public interest and advocacy organizations sent a letter to Speaker of the House Nancy Pelosi (D-CA) and House Minority Leader Kevin McCarthy (R-CA) noting “there are intense efforts underway to do exactly that, via current language in the House and Senate versions of the FY2021 National Defense Authorization Act (NDAA) that ultimately seek to reverse the FCC’s recent bipartisan and unanimous approval of Ligado Networks’ regulatory plans.” They urged them “not endorse efforts by the Department of Defense and its allies to veto commercial spectrum authorizations…[and][t]he FCC has proven itself to be the expert agency on resolving spectrum disputes based on science and engineering and should be allowed to do the job Congress authorized it to do.” In late April, the FCC’s “decision authorize[d] Ligado to deploy a low-power terrestrial nationwide network in the 1526-1536 MHz, 1627.5-1637.5 MHz, and 1646.5-1656.5 MHz bands that will primarily support Internet of Things (IoT) services.” The agency argued the order “provides regulatory certainty to Ligado, ensures adjacent band operations, including Global Positioning System (GPS), are sufficiently protected from harmful interference, and promotes more efficient and effective use of [the U.S.’s] spectrum resources by making available additional spectrum for advanced wireless services, including 5G.”
  • The European Data Protection Supervisor (EDPS) rendered his opinion on the European Commission’s White Paper on Artificial Intelligence: a European approach to excellence and trust and recommended the following for the European Union’s (EU) regulation of artificial intelligence (AI):
    • applies both to EU Member States and to EU institutions, offices, bodies and agencies;
    • is designed to protect from any negative impact, not only on individuals, but also on communities and society as a whole;
    • proposes a more robust and nuanced risk classification scheme, ensuring any significant potential harm posed by AI applications is matched by appropriate mitigating measures;
    • includes an impact assessment clearly defining the regulatory gaps that it intends to fill.
    • avoids overlap of different supervisory authorities and includes a cooperation mechanism.
    • Regarding remote biometric identification, the EDPS supports the idea of a moratorium on the deployment, in the EU, of automated recognition in public spaces of human features, not only of faces but also of gait, fingerprints, DNA, voice, keystrokes and other biometric or behavioural signals, so that an informed and democratic debate can take place and until the moment when the EU and Member States have all the appropriate safeguards, including a comprehensive legal framework in place to guarantee the proportionality of the respective technologies and systems for the specific use case.
  • The Bundesamt für Verfassungsschutz (BfV), Germany’s domestic security agency, released a summary of its annual report in which it claimed:
    • The Russian Federation, the People’s Republic of China, the Islamic Republic of Iran and the Republic of Turkey remain the main countries engaged in espionage activities and trying to exert influence on Germany.
    • The ongoing digital transformation and the increasingly networked nature of our society increases the potential for cyber attacks, worsening the threat of cyber espionage and cyber sabotage.
    • The intelligence services of the Russian Federation and the People’s Republic of China in particular carry out cyber espionage activities against German agencies. One of their tasks is to boost their own economies with the help of information gathered by the intelligence services. This type of information-gathering campaign severely threatens the success and development opportunities of German companies.
    • To counteract this threat, Germany has a comprehensive cyber security architecture in place, which is operated by a number of different authorities. The BfV plays a major role in investigating and defending against cyber threats by detecting attacks, attributing them to specific attackers, and using the knowledge gained from this to draw up prevention strategies. The National Cyber Response Centre, in which the BfV plays a key role, was set up to consolidate the co-operation between the competent agencies. The National Cyber Response Centre aims to optimise the exchange of information between state agencies and to improve the co-ordination of protective and defensive measures against potential IT incidents.

Further Reading

  • Trump confirms cyberattack on Russian trolls to deter them during 2018 midterms” – The Washington Post. In an interview with former George W. Bush speechwriter Marc Thiessen, President Donald Trump confirmed he ordered a widely reported retaliatory attack on the Russian Federation’s Internet Research Agency as a means of preventing interference during the 2018 mid-term election. Trump claimed this attack he ordered was the first action the United States took against Russian hacking even though his predecessor warned Russian President Vladimir Putin to stop such activities and imposed sanctions at the end of 2016. The timing of Trump’s revelation is interesting given the ongoing furor over reports of Russian bounties paid to Taliban fighters for killing Americans the Trump Administration may have known of but did little or nothing to stop.
  • Germany proposes first-ever use of EU cyber sanctions over Russia hacking” – Deutsche Welle. Germany is looking to use the European Union’s (EU) cyber sanctions powers against Russia for its alleged 2015 16 GB exfiltration of data from the Bundestag’s systems, including from Chancellor Angela Merkel’s office. Germany has been alleging that Fancy Bear (aka APT28) and Russia’s military secret service GRU carried out the attack. Germany has circulated its case for sanctions to other EU nations and EU leadership. In 2017, the European Council declared “[t]he EU diplomatic response to malicious cyber activities will make full use of measures within the Common Foreign and Security Policy, including, if necessary, restrictive measures…[and] [a] joint EU response to malicious cyber activities would be proportionate to the scope, scale, duration, intensity, complexity, sophistication and impact of the cyber activity.”
  • Wyden Plans Law to Stop Cops From Buying Data That Would Need a Warrant” – VICE. Following on a number of reports that federal, state, and local law enforcement agencies are essentially sidestepping the Fourth Amendment through buying location and other data from people’s smartphones, Senator Ron Wyden (D-OR) is going to draft legislation that would seemingly close what he, and other civil libertarians, are calling a loophole to the warrant requirement.
  • Amazon Backtracks From Demand That Employees Delete TikTok” – The New York Times. Amazon first instructed its employees to remove ByteDance’s app, TikTok, on 11 July from company devices and then reversed course the same day, claiming the email had been erroneously sent out. The strange episode capped another tumultuous week for ByteDance as the Trump Administration is intensifying pressure in a number of ways on the company which officials claim is subject to the laws of the People’s Republic of China and hence must share information with the government in Beijing. ByteDance counters the app marketed in the United States is through a subsidiary not subject to PRC law. ByteDance also said it would no longer offer the app in Hong Kong after the PRC change in law has extended the PRC’s reach into the former British colony. TikTok was also recently banned in India as part of a larger struggle between India and he PRC. Additionally, the Democratic National Committee warned staff about using the app this week, too.
  • Is it time to delete TikTok? A guide to the rumors and the real privacy risks.” – The Washington Post. A columnist and security specialist found ByteDance’s app vacuums up information from users, but so does Facebook and other similar apps. They scrutinized TikTok’s privacy policy and where the data went, and they could not say with certainty that it goes to and stays on servers in the US and Singapore. 
  • California investigating Google for potential antitrust violations” – Politico. California Attorney General Xavier Becerra is going to conduct his own investigation of Google aside and apart from the investigation of the company’s advertising practices being conducted by virtually every other state in the United States. It was unclear why Becerra opted against joining the larger probe launched in September 2019. Of course, the Trump Administration’s Department of Justice is also investigating Google and could file suit as early as this month.
  • How May Google Fight an Antitrust Case? Look at This Little-Noticed Paper” – The New York Times. In a filing with the Australian Competition and Consumer Commission (ACCC), Google claimed it does not control the online advertising market and it is borne out by a number of indicia that argue against a monopolistic situation. The company is likely to make the same case to the United States’ government in its antitrust inquiry. However, similar arguments did not gain tractions before the European Commission, which levied a €1.49 billion for “breaching EU antitrust rules” in March 2019.
  •  “Who Gets the Banhammer Now?” – The New York Times. This article examines possible motives for the recent wave of action by social media platforms to police a fraction of the extreme and hateful speech activists and others have been asking them to take down for years. This piece makes the argument that social media platforms are businesses and operate as such and expecting them to behave as de facto public squares dedicated to civil political and societal discourse is more or less how we ended up where we are.
  • TikTok goes tit-for-tat in appeal to MPs: ‘stop political football’ – The Australian. ByteDance is lobbying hard in Canberra to talk Ministers of Parliament out of possibly banning TikTok like the United States has said it is considering. While ByteDance claims the data collected on users in Australia is sent to the US or Singapore, some experts are arguing just to maintain and improve the app would necessarily result in some non-People’s Republic of China (PRC) user data making its way back to the PRC. As Australia’s relationship with the PRC has grown more fraught with allegations PRC hackers infiltrated Parliament and the Prime Minister all but saying PRC hackers were targeting hospitals and medical facilities, the government in Canberra could follow India’s lead and ban the app.
  • Calls for inquiry over claims Catalan lawmaker’s phone was targeted” – The Guardian. British and Spanish newspapers are reporting that an official in Catalonia who favors separating the region from Spain may have had his smartphone compromised with industrial grade spyware typically used only by law enforcement and counterterrorism agencies. The President of the Parliament of Catalonia Roger Torrent claims his phone was hacked for domestic political purposes, which other Catalan leaders argued, too. A spokesperson for the Spanish government said “[t]he government has no evidence that the speaker of the Catalan parliament has been the victim of a hack or theft involving his mobile.” However, the University of Toronto’s CitizenLab, the entity that researched and claimed that Israeli firm NSO Group’s spyware was deployed via WhatsApp to spy on a range of journalists, officials, and dissidents, often by their own governments, confirmed that Torrent’s phone was compromised.
  • While America Looks Away, Autocrats Crack Down on Digital News Sites” – The New York Times. The Trump Administration’s combative relationship with the media in the United States may be encouraging other nations to crack down on digital media outlets trying to hold those governments to account.
  •  “How Facebook Handles Climate Disinformation” – The New York Times. Even though the social media giant has moved aggressively to take down false and inaccurate COVID-19 posts, climate disinformation lives on the social media platform largely unmolested for a couple of reasons. First, Facebook marks these sorts of posts as opinion and take the approach that opinions should be judged under an absolutist free speech regime. Moreover, Facebook asserts posts of this sort do not pose any imminent harm and therefore do not need to be taken down. Despite having teams of fact checkers to vet posts of demonstrably untrue information, Facebook chooses not to, most likely because material that elicits strong reactions from users drive engagement that, in turn, drives advertising dollars.
  • Here’s how President Trump could go after TikTok” – The Washington Post. This piece lays out two means the Trump Administration could employ to press ByteDance in the immediate future: use of the May 2019 Executive Order “Securing the Information and Communications Technology and Services Supply Chain” or the Committee on Foreign Investment in the United States process examining ByteDance of the app Music.ly that became TikTok. Left unmentioned in this article is the possibility of the Federal Trade Commission (FTC) examining its 2019 settlement with ByteDance to settle violations of the “Children’s Online Privacy Protection Act” (COPPA).
  • You’re Doomscrolling Again. Here’s How to Snap Out of It.” – The New York Times. If you find yourself endlessly looking through social media feeds, this piece explains why and how you might stop doing so.
  • UK selling spyware and wiretaps to 17 repressive regimes including Saudi Arabia and China” – The Independent. There are allegations that the British government has ignored its own regulations on selling equipment and systems that can be used for surveillance and spying to other governments with spotty human rights records. Specifically, the United Kingdom (UK) has sold £75m to countries non-governmental organizations (NGO) are rated as “not free.” The claims include nations such as the People’s Republic of China (PRC), the Kingdom of Saudi Arabia, Bahrain, and others. Not surprisingly, NGOs and the minority Labour party are calling for an investigation and changes.
  • Google sued for allegedly tracking users in apps even after opting out” – c/net. Boies Schiller Flexner filed suit in what will undoubtedly seek to become a class action suit over Google’s alleged continuing to track users even when they turned off tracking features. This follows a suit filed by the same firm against Google in June, claiming its browser Chrome still tracks people when they switch to incognito mode.
  • Secret Trump order gives CIA more powers to launch cyberattacks” – Yahoo! News. It turns out that in addition to signing National Security Presidential Memorandum (NSPM) 13 that revamped and eased offensive cyber operations for the Department of Defense, President Donald Trump signed a presidential finding that has allowed the Central Intelligence Agency (CIA) to launch its own offensive cyber attacks, mainly at Russia and Iran, according to unnamed former United States (US) officials according to this blockbuster story. Now, the decision to commence with an attack is not vetted by the National Security Council; rather, the CIA makes the decision. Consequently, there have been a number of attacks on US adversaries that until now have not been associated with the US. And, the CIA is apparently not informing the National Security Agency or Cyber Command of its operations, raising the risk of US cyber forces working at cross purposes or against one another in cyberspace. Moreover, a recently released report blamed the lax security environment at the CIA for a massive exfiltration of hacking tools released by Wikileaks. 
  • Facebook’s plan for privacy laws? ‘Co-creating’ them with Congress” – Protocol. In concert with the release of a new white paper, Facebook Deputy Chief Privacy Officer Rob Sherman sat for an interview in which he pledged the company’s willingness to work with Congress to co-develop a national privacy law. However, he would not comment on any of the many privacy bills released thus far or the policy contours of a bill Facebook would favor except for advocating for an enhanced notice and consent regime under which people would be better informed about how their data is being used. Sherman also shrugged off suggestions Facebook may not be welcome given its record of privacy violations. Finally, it bears mention that similar efforts by other companies at the state level have not succeeded as of yet. For example, Microsoft’s efforts in Washington state have not borne fruit in the passage of a privacy law.
  • Deepfake used to attack activist couple shows new disinformation frontier” – Reuters. We are at the beginning of a new age of disinformation in which fake photographs and video will be used to wage campaigns against nations, causes, and people. An activist and his wife were accused of being terrorist sympathizers by a university student who apparently was an elaborate ruse for someone or some group looking to defame the couple. Small errors gave away the ruse this time, but advances in technology are likely to make detection all the harder.
  • Biden, billionaires and corporate accounts targeted in Twitter hack” – The Washington Post. Policymakers and security experts were alarmed when the accounts of major figures like Bill Gates and Barack Obama were hacked yesterday by some group seeking to sell bitcoin. They argue Twitter was lucky this time and a more ideologically motivated enemy may seek to cause havoc, say on the United States’ coming election. A number of experts are claiming the penetration of the platform must have been of internal controls for so many high profile accounts to be taken over at the same time.
  • TikTok Enlists Army of Lobbyists as Suspicions Over China Ties Grow” – The New York Times. ByteDance’s payments for lobbying services in Washington doubled between the last quarter of 2019 and thirst quarter of 2020, as the company has retained more than 35 lobbyists to push back against the Trump Administration’s rhetoric and policy changes. The company is fighting against a floated proposal to ban the TikTok app on national security grounds, which would cut the company off from another of its top markets after India banned it and scores of other apps from the People’s Republic of China. Even if the Administration does not bar use of the app in the United States, the company is facing legislation that would ban its use on federal networks and devices that will be acted upon next week by a Senate committee. Moreover, ByteDance’s acquisition of the app that became TikTok is facing a retrospective review of an inter-agency committee for national security considerations that could result in an unwinding of the deal. Moreover, the Federal Trade Commission (FTC) has been urged to review ByteDance’s compliance with a 2019 settlement that the company violated regulations protecting the privacy of children that could result in multi-billion dollar liability if wrongdoing is found.
  • Why Google and Facebook Are Racing to Invest in India” – Foreign Policy. With New Delhi banning 59 apps and platforms from the People’s Republic of China (PRC), two American firms have invested in an Indian giant with an eye toward the nearly 500 million Indians not yet online. Reliance Industries’ Jio Platforms have sold stakes to Google and Facebook worth $4.5 billion and $5.7 billion that gives them prized positions as the company looks to expand into 5G and other online ventures. This will undoubtedly give a leg up to the United States’ online giants in vying with competitors to the world’s second most populous nation.
  • “Outright Lies”: Voting Misinformation Flourishes on Facebook” – ProPublica. In this piece published with First Draft, “a global nonprofit that researches misinformation,” an analysis of the most popular claims made about mail voting show that many of them are inaccurate or false, thus violating the platforms terms of services yet Facebook has done nothing to remove them or mark them as inaccurate until this article was being written.
  • Inside America’s Secretive $2 Billion Research Hub” – Forbes. Using contract information obtained through Freedom of Information requests and interviews, light is shined on the little known non-profit MITRE Corporation that has been helping the United States government address numerous technological problems since the late 1950’s. The article uncovers some of its latest, federally funded projects that are raising eyebrows among privacy advocates: technology to life people’s fingerprints from social media pictures, technology to scan and copy Internet of Things (IoT) devices from a distance, a scanner to read a person’s DNA, and others.
  • The FBI Is Secretly Using A $2 Billion Travel Company As A Global Surveillance Tool” – Forbes. In his second blockbuster article in a week, Forbes reporter Thomas Brewster exposes how the United States (US) government is using questionable court orders to gather travel information from the three companies that essentially provide airlines, hotels, and other travel entities with back-end functions with respect to reservations and bookings. The three companies, one of whom, Sabre is a US multinational, have masses of information on you if you have ever traveled, and US law enforcement agencies, namely the Federal Bureau of Investigation, is using a 1789 statute to obtain orders all three companies have to obey for information in tracking suspects. Allegedly, this capability has only been used to track terror suspects but will now reportedly be used for COVID-19 tracking.
  • With Trump CIA directive, the cyber offense pendulum swings too far” – Yahoo! News. Former United States (US) National Coordinator for Security, Infrastructure Protection, and Counter-terrorism Richard Clarke argues against the Central Intelligence Agency (CIA) having carte blanche in conducting cyber operations without the review or input of other federal agencies. He suggests that the CIA in particular, and agencies in general, tend to push their authority to the extreme, which in this case could lead to incidents and lasting precedents in cyberspace that may haunt the US. Clarke also intimated that it may have been the CIA and not Israel that launched cyber attacks on infrastructure facilities in Tehran this month and last.

© Michael Kans, Michael Kans Blog and michaelkans.blog, 2019-2020. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Michael Kans, Michael Kans Blog, and michaelkans.blog with appropriate and specific direction to the original content.

Further Reading and Other Developments (11 July)

First things first, if you would like to receive my Technology Policy Update, email me. You can find some of these Updates from 2019 and 2020 here.

Other Developments

  • The United States District Court of Maine denied a motion by a number of telecommunications trade associations to enjoin enforcement of a new Maine law instituting privacy practices for internet service providers (ISP) in the state that limited information collection and processing. The plaintiffs claimed the 2017 repeal of the Federal Communications Commission’s (FCC) 2016 ISP Privacy Order preempted states from implementing their own privacy rules for ISPs. In its decision, the court denied the plaintiffs’ motion and will proceed to decide the merits of the case.
  • The European Data Protection Board (EDPB) has debuted a “One-Stop-Shop” register “containing decisions taken by national supervisory authorities following the One-Stop-Shop cooperation procedure (Art. 60 GDPR).” The EDPB explained “[u]nder the GDPR, Supervisory Authorities have a duty to cooperate on cases with a cross-border component to ensure a consistent application of the regulation – the so-called one-stop-shop (OSS) mechanism…[and] [u]nder the OSS, the Lead Supervisory Authority (LSA) is in charge of preparing the draft decisions and works together with the concerned SAs to reach consensus.” Hence this new repository will contain the decisions on which EU data protection authorities have cooperated in addressing alleged GDPR violations that reach across the borders of EU nations.
  • The chair of the House Energy and Commerce Committee and three subcommittee chairs wrote Facebook, Google, and Twitter asking the companies “provide the Committee with monthly reports similar in scope to what you are providing the European Commission regarding your COVID-19 disinformation efforts as they relate to United States users of your platform.” They are also asking that the companies brief them and staff on 22 July on these efforts. Given the Committee’s focus on disinformation, it is quite possible these monthly reports and the briefing could be the basis of more hearings and/or legislation. Chair Frank Pallone, Jr. (D-NJ), Oversight and Investigations Subcommittee Chair Diana DeGette (D-CO), Communications and Technology Subcommittee Chair Mike Doyle (D-PA) and Consumer Protection and Commerce Subcommittee Chair Jan Schakowsky (D-IL) signed the letters.
  • Reports indicate the Federal Trade Commission (FTC) and Department of Justice (DOJ) are reviewing the February 2019 $5.7 million settlement between the FTC and TikTok for violating the Children’s Online Privacy Protection Act (COPPA). In May 2020, a number of public advocacy groups filed a complaint with the FTC, asking whether the agency has “complied with the consent decree.” If TikTok has violated the order, it could face huge fines as the FTC and DOJ could seek a range of financial penalties. This seems to be another front in the escalating conflict between the United States and the People’s Republic of China.
  • Tech Inquiry, an organization that “seek[s] to combat abuses in the tech industry through coupling concerned tech workers with relevant members of civil society” revealed “an in-depth analysis of all public US federal (sub)contracting data over the last four and a half years to estimate the rankings of tech companies, both in and out of Silicon Valley, as contractors with the military, law enforcement, and diplomatic arms of the United States.” Tech Inquiry claimed “[o]ur analysis shows a diversity of contracting postures (see Tables 2 and 3), not a systemic divide from Washington. Within a substantial list of namebrand tech companies, only Facebook, Apple, and Twitter look to be staying out of major military and law enforcement contracts.”
  • The United States Secret Service announced the formation of a new Cyber Fraud Task Force (CFTF) which merges “its Electronic Crimes Task Forces (ECTFs) and Financial Crimes Task Forces (FCTFs) into a single unified network.” The rationale given for the merger is “the line between cyber and financial crimes has steadily blurred, to the point today where the two – cyber and financial crimes – cannot be effectively disentangled.”
  • The United States Election Assistance Commission (EAC) held a virtual public hearing, “Lessons Learned from the 2020 Primary Elections” “to discuss the administration of primary elections during the coronavirus pandemic.”
  • The National Council of Statewide Interoperability Coordinators (NCSWIC), a Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) administered program, released its “NCSWIC Strategic Plan and Implementation Guide,” “a stakeholder-driven, multi-jurisdictional, and multi-disciplinary plan to enhance interoperable and emergency communications.” NCSWIC contended “[t]he plan is a critical mid-range (three-year) tool to help NCSWIC and its partners prioritize resources, strengthen governance, identify future investments, and address interoperability gaps.”
  • Access Now is pressing “video conferencing platforms” other than Zoom to issue “regular transparency reports… clarifying exactly how they protect personal user data and enforce policies related to freedom of expression.”

Further Reading

  • India bans 59 Chinese apps, including TikTok and WeChat, after deadly border clash” – South China Morning Post. As a seeming extension to the military skirmish India and the People’s Republic of China (PRC) engaged in, a number of PRC apps have been banned by the Indian government, begging the question of whether there will be further escalation between the world’s two most populous nations. India is the TikTok’s biggest market with more than 120 million users in the South Asian country, and a range of other apps and platforms also have millions of users. Most of the smartphones used in India are made by PRC entities. Moreover, if New Delhi joins Washington’s war on Huawei, ZTE, and other PRC companies, the cumulative effect could significantly affect the PRC’s global technological ambitions.
  • Huawei data flows under fire in German court case” – POLITICO. A former Huawei employee in Germany has sued the company alleging violations of the General Data Protection Regulation (GDPR) through the company’s use of standard contractual clauses. This person requested the data the company had collected from him and the reasons for doing so. Huawei claimed it had deleted the data. A German court’s decision that Huawei had violated the GDPR is being appealed. However, some bigger issues are raised by the case, including growing unease within the European Union, that People’s Republic of China firms are possibly illegally transferring and processing EU citizens’ data and a case before Europe’s highest court in which the legality of standard contractual clauses may be determined as early as this month.
  • Deutsche Telekom under pressure after reports on Huawei reliance” – Politico. A German newspaper reported on confidential documents showing that Deutsche Telekom deepened its relationship with Huawei as the United States’ government was pressuring its allies and other nations to stop using the equipment and services of the company. The German telecommunications company denied the claims, and a number of German officials expressed surprise and dismay, opining that the government of Chancellor Angela Merkel should act more swiftly to implement legislation to secure Germany’s networks.
  • Inside the Plot to Kill the Open Technology Fund” – Vice. According to critics, the Trump Administration’s remaking of the United States (US) Agency for Global Media (USAGM) is threatening the mission and effectiveness of the Open Technology Fund (OTF), a US government non-profit designed to help dissidents and endangered populations throughout the world. The OTF has funded a number of open technology projects, including the Signal messaging app, but the new USAGM head, Michael pack, is pressing for closed source technology.
  • How Police Secretly Took Over a Global Phone Network for Organized Crime” – Vice. European law enforcement agencies penetrated and compromised an encrypted messaging service in Europe, leading to a number of arrests and seizures of drugs. Encrochat had billed itself as completely secure, but hackers with the French government broke into the system and laid bare the details of numerous crimes. And, this is only the latest encrypted app that is marketed to criminals, meaning others will soon step into the void created when Encrochat shut down.
  • Virus-Tracing Apps Are Rife With Problems. Governments Are Rushing to Fix Them.” – The New York Times. In numerous nations around the world, the rush to design and distribute contact tracing apps to fight COVID-19 has resulted in a host of problems predicted by information technology professionals and privacy, civil liberties and human rights advocates. Some apps collect too much information, many are not secure, and some do not seem to perform their intended tasks. Moreover, without mass adoption, the utility of an app is questionable at best. Some countries have sought to improve and perfect their apps in response to criticism, but others are continuing to use and even mandate their citizens and residents use them.
  • Hong Kong Security Law Sets Stage for Global Internet Fight” – The New York Times. After the People’s Republic of China (PRC) passed a new law that strips many of the protections Hong Kong enjoyed, technology companies are caught in a bind, for now Hong Kong may well start demanding they hand over data on people living in Hong Kong or employees could face jail time. Moreover, the data demands made of companies like Google or Facebook could pertain to people anywhere in the world. Companies that comply with Beijing’s wishes would likely face turbulence in Washington and vice versa. TikTok said it would withdraw from Hong Kong altogether.

© Michael Kans, Michael Kans Blog and michaelkans.blog, 2019-2020. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Michael Kans, Michael Kans Blog, and michaelkans.blog with appropriate and specific direction to the original content.

Image by Gino Crescoli from Pixabay

Further Reading and Other Developments (29 June)

First things first, if you would like to receive my Technology Policy Update, email me. You can find some of these Updates from 2019 and 2020 here.

Other Developments

  • The Senate Commerce, Science, and Transportation Committee held an oversight hearing on the Federal Communications Commission (FCC) with the FCC Chair and four Commissioners.
  • New Zealand’s Parliament passed the “Privacy Act 2020,” a major update of its 1993 statute that would, according to New Zealand’s Privacy Commissioner, do the following:
    • Mandatory notification of harmful privacy breaches. If organisations or businesses have a privacy breach that poses a risk of serious harm, they are required to notify the Privacy Commissioner and affected parties. This change brings New Zealand in line with international best practice.
    • Introduction of compliance orders. The Commissioner may issue compliance notices to require compliance with the Privacy Act. Failure to follow a compliance notice could result a fine of up to $10,000.
    • Binding access determinations. If an organisation or business refuses to make personal information available upon request, the Commissioner will have the power to demand release.
    • Controls on the disclosure of information overseas. Before disclosing New Zealanders’ personal information overseas, New Zealand organisations or businesses will need to ensure those overseas entities have similar levels of privacy protection to those in New Zealand.
    • New criminal offences. It will be an offence to mislead an organisation or business in a way that affects someone’s personal information or to destroy personal information if a request has been made for it.  The maximum fine for these offences is $10,000.
    • Explicit application to businesses whether or not they have a legal or physical presence in New Zealand. If an international digital platform is carrying on business in New Zealand, with the New Zealanders’ personal information, there will be no question that they will be obliged to comply with New Zealand law regardless of where they, or their servers are based.
  • The United States’ National Archives’ Information Security Oversight Office (ISOO) submitted its annual report to the White House and found:
    • Our Government’s ability to protect and share Classified National Security Information and Controlled Unclassified Information (CUI) continues to present serious challenges to our national security. While dozens of agencies now use various advanced technologies to accomplish their missions, a majority of them still rely on antiquated information security management practices. These practices have not kept pace with the volume of digital data that agencies create and these problems will worsen if we do not revamp our data collection methods for overseeing information security programs across the Government. We must collect and analyze data that more accurately reflects the true health of these programs in the digital age.
    • However, ISOO noted progress on efforts to better secure and protect CUI but added “[f]ull implementation will require additional resources, including dedicated funds and more full-time staff.”
    • Regarding classified information, ISOO found “Classified National Security Information policies and practices remain outdated and are unable to keep pace with the volume of digital data that agencies create.”
  • The Australian Strategic Policy Institute’s International Cyber Policy Centre released its most recent “Covid-19 Disinformation & Social Media Manipulation” report titled “ID2020, Bill Gates and the Mark of the Beast: how Covid-19catalyses existing online conspiracy movements:”
    • Against the backdrop of the global Covid-19 pandemic, billionaire philanthropist Bill Gates has become the subject of a diverse and rapidly expanding universe of conspiracy theories. As an example, a recent poll found that 44% of Republicans and 19% of Democrats in the US now believe that Gates is linked to a plot to use vaccinations as a pretext to implant microchips into people. And it’s not just America: 13% of Australians believe that Bill Gates played a role in the creation and spread of the coronavirus, and among young Australians it’s 20%. Protests around the world, from Germany to Melbourne, have included anti-Gates chants and slogans.
    • This report takes a close look at a particular variant of the Gates conspiracy theories, which is referred to here as the ID2020 conspiracy (named after the non-profit ID2020 Alliance, which the conspiracy theorists claim has a role in the narrative), as a case study for examining the dynamics of online conspiracy theories on Covid-19. Like many conspiracy theories, that narrative builds on legitimate concerns, in this case about privacy and surveillance in the context of digital identity systems, and distorts them in extreme and unfounded ways.
  • The Pandemic Response Accountability Committee (PRAC) released “TOP CHALLENGES FACING FEDERAL AGENCIES:  COVID-19 Emergency Relief and Response Efforts” for those agencies that received the bulk of funds under the “Coronavirus Aid, Relief, and Economic Security (CARES) Act” (P.L. 116-136). PRAC is housed within the Council of the Inspectors General on Integrity and Efficiency (CIGIE) is comprised of “21 Offices of Inspector General (OIG) overseeing agencies who received the bulk of the emergency funding.” PRAC stated
    • CIGIE previously has identified information technology (IT) security and management as a long-standing, serious, and ubiquitous challenge that impacts agencies across the government, highlighting agencies’ dependence on reliable and secure IT systems to perform their mission-critical functions.  Key areas of concern have included safeguarding federal systems against cyberattacks and insider threats, modernizing and managing federal IT systems, ensuring continuity of operations, and recruiting and retaining a highly skilled cybersecurity workforce.  
    • These concerns remain a significant challenge, but are impacted by (1) widespread reliance on maximum telework to continue agency operations during the pandemic, which has strained agency networks and shifted IT resources, and (2) additional opportunities and targets for cyberattacks created by remote access to networks and increases in online financial activity.
  • Following the completion of a European Union-People’s Republic of China summit, European Commission President Ursula von der Leyen pointed to a number of ongoing technology-related issues between the EU and the PRC, including:
    • [W]e continue to have an unbalanced trade and investment relationship. We have not made the progress we aimed for in last year’s Summit statement in addressing market access barriers. We need to follow up on these commitments urgently. And we also need to have more ambition on the Chinese side in order to conclude negotiations on an investment agreement. These two actions would address the asymmetry in our respective market access and would improve the level playing field between us. In order to conclude the investment agreement, we would need in particular substantial commitments from China on the behaviour of state-owned enterprises, transparency in subsidies, and transparency on the topic of forced technology transfers.
    • We have raised these issues at the same time with President Xi and Premier Li that we expect that China will show the necessary level of ambition to conclude these negotiations by the end of this year. I think it is important that we have now a political, high-level approach on these topics.
    • I have also made it clear that China needs to engage seriously on a reform of the World Trade Organization, in particular on the future negotiations on industrial subsidies. This is the relevant framework where we have to work together on the topic – and it is a difficult topic – but this is the framework, which we have to establish to have common binding rules we agree on.
    • And we must continue to work on tackling Chinese overcapacity, for example in the steel and metal sectors, and in high technology. Here for us it is important that China comes back to the international negotiation table, that we sit down there and find solutions.
    • We also pointed out the importance of the digital transformation and its highly assertive approach to the security, the resilience and the stability of digital networks, systems and value chains. We have seen cyberattacks on hospitals and dedicated computing centres. Likewise, we have seen a rise of online disinformation. We pointed out clearly that this cannot be tolerated.
  • United States Secretary of State Mike Pompeo issued a statement titled “The Tide Is Turning Toward Trusted 5G Vendors,” in which he claimed:
    • The tide is turning against Huawei as citizens around the world are waking up to the danger of the Chinese Communist Party’s surveillance state. Huawei’s deals with telecommunications operators around the world are evaporating, because countries are only allowing trusted vendors in their 5G networks. Examples include the Czech Republic, Poland, Sweden, Estonia, Romania, Denmark, and Latvia. Recently, Greece agreed to use Ericsson rather than Huawei to develop its 5G infrastructure.
  • Germany’s highest court, the Bundesgerichtshof (BGH), ruled against Facebook’s claim that the country’s antitrust regulator was wrong in its finding that it was abusing its dominant position in combining data on German nationals and residents across its platforms. Now the matter will go down to a lower German court that is expected to heed the higher court’s ruling and allow the Bundeskartellamt’s restrictions to limit Facebook’s activity.
  • France’s Conseil d’État upheld the Commission nationale de l’informatique et des libertés’ (CNIL) 2019 fine of €50 million of Google under the General Data Protection Regulation (GDPR) “for lack of transparency, inadequate information and lack of valid consent regarding the ads personalization.”
  • A Virginia court ruled against House Intelligence Committee Ranking Member Devin Nunes (R-CA) in his suit against Twitter and Liz Mair, a Republican consultant, and Twitter accounts @devincow and @DevinNunesMom regarding alleged defamation.
  • The California Secretary of State has listed the ballot initiative to add the “California Privacy Rights Act” to the state’s law, in large part, to amend the “California Consumer privacy Act” (CCPA) (AB 375) as having qualified for November’s ballot.

Further Reading

  • Wrongfully Accused by an Algorithm” – The New York Times. In what should have been predictable and foreseeable given the error rate of many facial recognition algorithms at identifying correctly people of color, an African American was wrongly identified by this technology, causing him to be released. Those in the field and experts stress positive identifications are supposed to only be one piece of evidence, but in this case, it was the only evidence police had. After a store loss specialists agreed a person in low grade photo was the likely shoplifter, police arrested the man. Eventually, the charges were dismissed, initially with prejudice leaving open the possibility of future prosecution but later the district attorney cleared all charges and expunged the arrest.
  • Pentagon Says it Needs ‘More Time’ Fixing JEDI Contract“ – Nextgov. The saga of the Department of Defense’s Joint Enterprise Defense Infrastructure cloud contract continues. Amazon and Microsoft will need to submit revised bids for the possibly $10 billion procurement as the Department of Defense (DOD) is trying to cure the problems turned up by a federal court in the suit brought by Amazon. These bids would be evaluated later this summer, according to a recent DOD court filing. The next award of this contract could trigger another bid protest just as the first award caused Amazon to challenge Microsoft’s victory.
  • EU pushing ahead with digital tax despite U.S. resistance, top official says” – Politico. In an Atlantic Council event, European Commission Executive Vice President Margrethe Vestager stated the European Union will move ahead with an EU-wide digital services tax despite the recent pullout of the United States from talks on such a tax. The Organization for Economic Co-operation and Development had convened multi-lateral talks to resolve differences on how a global digital services tax will ideally function with most of the nations involved arguing for a 2% tax to be assessed in the nation where the transaction occurs as opposed to where the company is headquartered. EU officials claim agreement was within reach when the US removed itself from the talks. An EU-wide tax is of a piece with a more aggressive stance taken by the EU towards US technology companies, a number of which are currently under investigation for antitrust and anti-competitive behaviors.
  • Verizon joins ad boycott of Facebook over hateful content” – Associated Press. The telecommunications company joined a number of other companies in pulling their advertising from Facebook organized by the ADL (the Anti-Defamation League), the NAACP, Sleeping Giants, Color Of Change, Free Press and Common Sense. The #StopHateforProfit “asks large Facebook advertisers to show they will not support a company that puts profit over safety,” and thus far, a number of companies are doing just that, including Eddie Bauer, Patagonia, North Face, Ben & Jerry’s, and others. In a statement, a Facebook spokesperson stated “[o]ur conversations with marketers and civil rights organizations are about how, together, we can be a force for good.” While Facebook has changed course due to this and other pressure regarding content posted or ads placed on its platform by most recently removing a Trump campaign ad with Nazi imagery, the company has not changed its position on allowing political ads with lies.
  • The UK’s contact tracing app fiasco is a master class in mismanagement” – MIT Technology Review. This after-action report on the United Kingdom’s National Health Service’s efforts to build its own COVID-19 contact tracing app is grim. The NHS is basically scrapping its work and opting for the Google/Apple API. However, the government in London is claiming “we will now be taking forward a solution that brings together the work on our app and the Google/Apple solution.” A far too ambitious plan married to organizational chaos led to the crash of the NHS effort.
  • Trump administration sees no loophole in new Huawei curb” – Reuters. Despite repeated arguments by trade experts the most recent United States Department of Commerce regulations on Huawei will not cut off access to high technology components, Secretary of Commerce Wilbur Ross claimed “[t]he Department of Commerce does not see any loopholes in this rule…[and] [w]e reaffirm that we will implement the rule aggressively and pursue any attempt to evade its intent.”
  • Defense Department produces list of Chinese military-linked companies” – Axios. Likely in response to a letter sent last year by Senate Minority Leader Chuck Schumer (D-NY) and Senator Tom Cotton (R-AR), the Department of Defense has finally fulfilled a requirement in the FY 1999 National Defense Authorization Act to update a list of “those persons operating directly or indirectly in the United States or any of its territories and possessions that are Communist Chinese military companies.” The DOD has complied and compiled a list of People’s Republic of China (PRC) entities linked to the PRC military. This provision in the FY 1999 NDAA also grants the President authority to “exercise International Emergency Economic Powers Act (IEEPA) authorities” against listed entities, which could include serious sanctions.
  • Andrew Yang is pushing Big Tech to pay users for data” – The Verge. Former candidate for the nomination of the Democratic Party for President Andrew Yang has stated the Data Dividend Project, “a movement dedicated to taking back control of our personal data: our data is our property, and if we allow companies to use it, we should get paid for it.” Additionally, “[i]ts primary objective is to establish and enforce data property rights under laws such as the California Consumer Privacy Act (CCPA), which went into effect on January 1, 2020.” California Governor Gavin Newsom proposed a similar program in very vague terms in a State of California speech but never followed up on it, and Senator John Kennedy (R-LA) has introduced the “Own Your Own Data Act” (S. 806) to provide people with rights to sell their personal data.

© Michael Kans, Michael Kans Blog and michaelkans.blog, 2019-2020. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Michael Kans, Michael Kans Blog, and michaelkans.blog with appropriate and specific direction to the original content.

Photo by Retha Ferguson from Pexels

Further Reading and Other Developments (20 June)

First things first, if you would like to receive my Technology Policy Update, email me. You can find some of these Updates from 2019 and 2020 here.

Other Developments

  • The House Financial Services Committee’s National Security, International Development, and Monetary Policy Subcommittee held a virtual hearing titled “Cybercriminals and Fraudsters: How Bad Actors Are Exploiting the Financial System During the COVID-19 Pandemic.”
  • The Senate Appropriations Committee’s Financial Services and General Government Subcommittee held a hearing titled “Oversight of FCC Spectrum Auctions Program.”
  • The Commerce, Science, and Transportation Committee held a hearing on a number of nominations, including a re-nomination of Federal Communications Commission Commissioner Michael O’Reilly for another full term.
  • The Department of Commerce’s Industry and Security Bureau released an interim final rule to amend “the Export Administration Regulations (EAR) to authorize the release of certain technology to Huawei and its affiliates on the Entity List without a license if such release is made for the purpose of contributing to the revision or development of a “standard” in a “standards organization.” The Department added in its press release “The rule returns U.S. industry to the status quo ante, from an Entity List perspective, with respect to disclosures of such technology to Huawei and its affiliates in legitimate standards development contexts only, and not for commercial purposes. Disclosures for commercial purposes remain “subject to the EAR” and are still subject to recordkeeping and all other applicable EAR requirements.” Comments are due on 17 August 2020.
  • The National Transportation Safety Board (NTSB) released its “Safety Recommendation Report” that “called for a change in air cargo shipping requirements for some types of lithium-ion batteries” following its investigation “into the shipment of lithium-ion batteries that ignited while in transport on a delivery truck in Canada.” The NTSB recommended that the Pipeline and Hazardous Materials Safety Administration:
    • Propose to the International Civil Aviation Organization to remove its special provision A88 from its Technical Instructions for the Safe Transport of Dangerous Goods by Air allowing special permits for low-production or prototype lithium-ion cells or batteries shipped by airplane and eliminate any exceptions to the testing of United Nations Manual of Tests and Criteria, Part III, Sub-section 38.3 requirements for all lithium-ion batteries before transport by air.( A-20-31)
    • Once the International Civil Aviation Organization removes special provision A88 from the Technical Instructions for the Safe Transport of Dangerous Goods by Air, remove the exemption from United Nations Manual of Tests and Criteria, Part III, Sub-section 38.3 testing from Title 49 Code of Federal Regulations 173.185(e) for low-production or prototype lithium-ion batteries, when transported by air. (A-20-32)
  • The Carnegie Endowment for International Peace’s Partnership for Countering Influence Operations (PCIO) released “The Challenges of Countering Influence Operations” with these “Key Takeaways:”
    • Influence operations defy easy categorization. Influence operations often fail to fit neatly into boxes outlined by individual policies or legislation. They are run in a complex environment where actors overlap, borders are easily crossed and blurred, and motives are mixed—making enforcement challenging. In this case study, actors share highly politicized online content but also appear to benefit financially from their actions, making it difficult to ascertain whether their motives are primarily political, commercial, or both.
    • Relevant policies by social media platforms tend to be a patchwork of community standards that apply to individual activities of an influence campaign, not the operation as a whole. Policies published by social media companies often focus on individual components of influence operations. This approach attempts to neatly categorize and distinguish actors (foreign versus domestic), motives (political influence and profit), activities (including misrepresentation, fraud, and spamming behavior), and content (such as misinformation, hate speech, and abuse). This piecemeal approach to enforcement raises questions about whether officials within social media platforms fully understand how influence operations work and how such campaigns are more than the individual behaviors that compose them.
    • Social media networks have more opportunities to counter influence operations through their platform policies than governments do with existing legislation. Social media companies have implemented various policies to govern how their platforms are used, providing opportunities for combating influence operations. They also have greater access to information about how their platforms are used and have domain-specific expertise that allows them to create more tailored solutions. Fewer avenues exist for countering such influence operations using government-led legal mechanisms. This is not only because of the relative paucity of laws that govern online activity but also because law enforcement requires attribution before they can act, and such attribution can be difficult to ascertain in these cases. This means that governments have generally done little to help private industry actors determine what kinds of influence operations are unacceptable and should be combated. In the absence of such guidance, industry actors are de facto drawing those lines for society. Governments could do more to help guide industry players as they determine the boundaries of acceptable behavior by participating in multi-stakeholder efforts—some of which have been set up by think tanks and nonprofits—and by considering legal approaches that emphasize transparency rather than criminalization.
    • The influence operations uncovered by media scrutiny are not always as easy to counter as those writing about them might hope. Savvy influence operators understand how to evade existing rules, so that their activities and content do not breach known policies or legislation. Media coverage that showcases examples of influence operations seldom explains whether and how these operators violate existing platform policies or legislation. This is a problem because distasteful influence operations do not always overtly violate existing policies or laws—raising questions about where the lines are (and should be) between what is tolerable and what is not, and, moreover, who should be determining those lines. Even when existing policies clearly do apply, these questions persist. Stakeholders should more clearly assess what constitutes problematic behavior before rushing to demand enforcement.
  • A number of privacy and civil liberties groups released “principles to protect the civil rights and privacy of all persons, especially those populations who are at high risk for the virus and communities of color, when considering the deployment of technological measures in response to the COVID-19 crisis.” These groups also sent these principles in letters to both the House and the Senate.
  • The Technology Coalition, formed 15 years ago “when industry leaders came together to fight online child sexual exploitation and abuse (CSEA),” announced “Project Protect: A plan to combat online child sexual abuse – a renewed investment and ongoing commitment to our work seeking to prevent and eradicate online CSEA” with these elements:
    • Execute a Strategic “Five Pillar” Plan to reinforce the cross-industry approach to combating CSEA, putting in place the structure, membership models, and staffing needed to support the Technology Coalition’s long term objectives.
    • Establish a multi-million dollar Research and Innovation Fund to build crucial technological tools needed to more effectively prevent and work to eradicate CSEA.
    • Commit to publishing an Annual Progress Report on industry efforts to combat CSEA.
    • Create an annual Forum for CSEA experts bringing together industry, governments, and civil society to share best practices and drive collective action.
  • Amnesty International’s Security Lab named Bahrain, Kuwait and Norway as having “some of the most invasive COVID-19 contact tracing apps around the world, putting the privacy and security of hundreds of thousands of people at risk.”
  • The Knight Foundation and Gallup released “Free Expression, Harmful Speech, and Censorship in a Digital World,” “a study to gauge Americans’ opinions on [social media companies, the internet, and the role of government], delving specifically into two potential paths forward — amending Section 230 of the Communications Decency Act, which largely shields internet companies from legal liability for content shared on their sites, and the relatively new notion of content oversight boards” with these topline findings:
    • Americans prefer social media apps and sites to be places of open expression.
    • Even as Americans voice a preference for open expression, there are several forms of online content that many say should be restricted or never allowed
    • Many Americans have personally been targeted by harmful online behavior.
    • Americans are somewhat divided on Section 230 of the Communications Decency Act, which largely shields major internet companies from liability for content posted on their websites and apps by third parties.
    • A majority of Americans do not trust social media companies to make the right decisions about what content appears on their sites or apps.
    • Despite misgivings about major internet companies making the right decisions related to harmful online content, Americans are more likely to favor the companies, rather than government, setting policies to regulate such content
    • Americans’ opinions of content oversight boards are largely favorable, tending to prefer them to social media companies or the government to make decisions about what can and cannot appear on social media websites and apps. 
    • Americans’ favorability toward content oversight boards increases when they know more about them.
    • The most important content oversight board attributes for Americans are transparency and diversity, followed closely by independence — i.e., who appoints board members. Less valuable is the board’s ability to compel social media companies to enact its decisions or guidelines.
    • Americans’ trust in a social media company will not automatically increase solely because the company adopts a content oversight board. Rather, trust can be gained based on the board’s features relating to its independence, transparency, diversity and ability to enforce decisions.
  • Graphika released a report titled “Exposing Secondary Infektion: Forgeries, interference, and attacks on Kremlin critics across six years and 300 sites and platforms,” “a long-running Russian information operation, encompassing multiple campaigns on social media run by a central entity, which was already active in 2014 and that was still running in early 2020.”
  • The University of Toronto’s Citizen Lab and Amnesty International released a report on “nine Indian lawyers, activists, and journalists….targeted in 2019 in a coordinated malware campaign” with “NetWire, a commercially available spyware.”

Further Reading

  • The Economy Is Reeling. The Tech Giants Spy Opportunity.” – The New York Times. All of the large technology companies are continuing the same pace of acquisition and product roll outs as last year. Critics fear that companies’ expansion through buying new businesses, technologies, and platforms will further cement their dominance of the United States (US) and world economies. Moreover, these companies have also been rolling out new services to compete with upstarts (e.g. Google’s meeting service to try to grab market share from Zoom.) It remains to be seen whether antitrust and anti-competitive actions in the US, European Union and elsewhere will stop or even reverse the continued growth of Google, Apple, Amazon, and others.
  • Amazon’s Ring has 29 new police agreements since the killing of George Floyd” – Protocol. In spite of its pledge to hold off on selling its facial recognition technology to police departments for a year, Amazon has continued to sign up local law enforcement for participation in partnerships using its Ring and Neighbors technology platforms. These systems make available to police footage from the camera/doorbell system Amazon is marketing as a security must have. Critics of the system and how Amazon operates it argue it has already disproportionately affected African Americans and other minorities in gentrifying areas and offers a workaround to warrant requirements for officers would not need to go to court to obtain this footage since private parties are not bound by the Fourth Amendment like government agencies.
  • Big Tech’s Pandemic Power Grab” – The Atlantic. This article foresees government regulation of large technology companies in the United States (US) that solidifies their preeminence, in large part, because these companies have been partnering with and working for the US government. And, in making this bargain, these companies are using every lever and all the leverage at their disposal to strike the type of bargain they want. There may be pushback against this impulse to grow, but it is worth keeping in mind that the trustbusting era in the US may have divided up corporate giants like Standard Oil but their progeny are still very powerful (e.g. Exxon Mobil.)
  • New York lawmakers want to outlaw geofence warrants as protests grow” – Protocol. A bill introduced in April to address the law enforcement practice of requesting geofencing data from technology companies receives renewed scrutiny in the New York State legislature in the midst of protests against racism and police violence in the United States. The article cites a Google filing in a Virginia lawsuit alleging “Between 2017 and 2018, Google saw a 1,500% increase in geofence requests…[and] [b]etween 2018 and 2019, that figure shot up another 500%.” Technology companies with troves of data on where people are at virtually every hour of the day are treading carefully as critics of geofence requests and warrants are pushing to ban law enforcement agencies from using these data.
  • Australian leader says unnamed state increasing cyberattacks” – Associated Press. Australia’s Prime Minister Scott Morrison told reporters “Australian organizations are currently being targeted by a sophisticated state-based cyber actor.” He contended “[t]his activity is targeting Australian organizations across a range of sectors, including all levels of government, industry, political organizations, education, health, essential service providers and operators of other critical infrastructure.” In concert with Morrison’s statement, the Australian Cyber Security Centre (ACSC) and the Department of Home Affairs issued an advisory describing “the tactics, techniques and procedures (TTPs) identified during the ACSC’s investigation of a cyber campaign targeting Australian networks.” Some experts are saying it must be the People’s Republic of China (PRC), especially after Canberra named the PRC as the entity that hacked into Parliament.
  • Eric Schmidt: Huawei has engaged in unacceptable practices” – BBC News. The former Google head claims the People’s Republic of China (PRC) has accessed Huawei’s routers to exfiltrate information. Schmidt conceded that Huawei’s products are superior to other offerings on the market, which poses a challenge for networks and nations. He also flagged the research and development budgets Huawei and other PRC companies have that eclipse other multinationals.
  • French Court Strikes Down Most of Online Hate Speech Law” – The New York Times. A French court struck down the core of President Emmanuel Macron’s new statute to police offensive online speech, finding two provisions would impinge freedom of expression. Macron’s party has vowed to take another run at such legislation.
  • Europe threatens digital taxes without global deal, after U.S. quits talks” – Reuters. After the United States withdrew from Organisation for Economic Cooperation and Development (OECD) talks on digital taxes, prompting promises from the European Union to proceed with such taxes.

© Michael Kans, Michael Kans Blog and michaelkans.blog, 2019-2020. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Michael Kans, Michael Kans Blog, and michaelkans.blog with appropriate and specific direction to the original content.

FTC Demands Ten Years of Information From Big Tech On Mergers and Acquisitions

The Federal Trade Commission (FTC) has issued an order to a number of large technology companies with an eye towards determining if the current threshold for federal examination of mergers and acquisitions is too high for a number of technology-related acquisitions. However, larger acquisitions above the threshold of about $90 million are not part of this examination such as Facebook’s $22 billion purchase of WhatsApp. Agency officials were also quoted as saying that the inquiry is bigger than anti-competitive issues as there may be ulterior motives for the rash of acquisitions in this sector. Moreover, this order was issued at a time when the agency, the Department of Justice (DOJ), state attorneys general, and the House Judiciary Committee are examining antitrust and anti-competitive practices in the technology world.

Nonetheless, the agency is asking that major technology firms turn over information on mergers and acquisitions that were too small for the FTC or the DOJ to investigate potential anti-competitive effects. And, while the information gleaned from such an inquiry may not be used for an investigation that could result in legal action, the FTC may do so under the FTC Act if it so chooses. In a conference call with reporters, FTC Chair Joe Simons remarked “[i]f during this study we see that there are transactions that turn out were problematic, all of our options are on the table.”

The FTC sent letters to Alphabet, Amazon, Apple, Facebook, and Microsoft “to provide information and documents on the terms, scope, structure, and purpose of transactions that each company consummated between Jan. 1, 2010 and Dec. 31, 2019” according to the agency’s press release.

In an FAQ, the FTC stated:

We plan to use the responses to our Special Orders to better understand acquisitions by certain technology companies. In particular, the study will help the FTC assess whether U.S. antitrust authorities are receiving adequate notice of transactions that might limit or eliminate competition. The Hart-Scott-Rodino (HSR) Antitrust Improvements Act requires premerger filings when the parties and the transaction meet certain size thresholds. The FTC will study whether large tech companies are making potentially anticompetitive acquisitions—including acquisitions of nascent or potential competitors—that fall below HSR filing thresholds.

The FTC explained that these orders are issued “under Section 6(b) of the FTC Act, which authorizes the Commission to conduct wide-ranging studies that do not have a specific law enforcement purpose.” The agency claimed that “[t]he orders will help the FTC deepen its understanding of large technology firms’ acquisition activity, including how these firms report their transactions to the federal antitrust agencies, and whether large tech companies are making potentially anticompetitive acquisitions of nascent or potential competitors that fall below HSR filing thresholds and therefore do not need to be reported to the antitrust agencies.”

The FTC added

  • The Special Orders require each recipient to identify acquisitions that were not reported to the FTC and the U.S. Department of Justice under the HSR Act, and to provide information similar to that requested on the HSR notification and report form. The orders also require companies to provide information and documents on their corporate acquisition strategies, voting and board appointment agreements, agreements to hire key personnel from other companies, and post-employment covenants not to compete. Last, the orders ask for information related to post-acquisition product development and pricing, including whether and how acquired assets were integrated and how acquired data has been treated.
  • The Commission plans to use the information obtained in this study to examine trends in acquisitions and the structure of deals, including whether acquisitions not subject to HSR notification might have raised competitive concerns, and the nature and extent of other agreements that may restrict competition. The Commission also seeks to learn more about how small firms perform after they are acquired by large technology firms. These and related issues were discussed during several sessions of the FTC’s 2018 Hearings on Competition and Consumer Protection in the 21st Century, and this study is part of the follow-up from those Hearings.

Simons stated that “[t]his initiative will enable the Commission to take a closer look at acquisitions in this important sector, and also to evaluate whether the federal agencies are getting adequate notice of transactions that might harm competition…[and] will help us continue to keep tech markets open and competitive, for the benefit of consumers.”

In a tweet, Commissioner Rohit Chopra suggested the FTC may be interested in more than just anti-competitive mergers:

Companies across the economy are in an arms race to soak up every source of data and monetize it. Many of these mergers fly below the radar. The FTC orders will provide clarity on why boardrooms are shelling out billions for our personal data.

As noted, the FTC and DOJ are in the midst of investigations into big technology companies. However, the agencies had supposedly divided the investigation with the FTC looking at Facebook and Amazon and the DOJ investigating Google and Apple. However, there have been reports that the DOJ and the FTC have been fighting over who is investigating whom with the FTC and DOJ confirming a dispute in testimony before the Senate Judiciary Committee last fall.

The House Judiciary Committee’s Antitrust, Commercial, and Administrative Law Subcommittee held its fifth hearing on competition in digital markets in January and is expected to at least issue a report and possibly even legislative language to reform the antitrust and anti-competitive statutory and regulatory landscape.

Additionally, New York Attorney General Letitia James is leading an antitrust investigation of Facebook that almost all state attorneys general are part of while Texas Attorney General Ken Paxton is leading almost all state attorneys general’s investigation of Google for possible antitrust violations.

Finally, Senators Bernie Sanders (I-VT) and Elizabeth Warren (D-MA) have called for the breakup of large technology companies as part of their campaigns to secure the Democratic nomination for president.