Further Action On TikTok Divestment and Ban But No Changes

TikTok sues to block the CFIUS order that it divest and the Trump Administration files an appeal of an injunction.

Even though the Trump Administration’s efforts to implement its ban of TikTok have gone nowhere as numerous courts have enjoined the enforcement of the orders, TikTok filed suit against the related order that the company divest Musical.ly primarily on the grounds that the technology that supposedly threatens United States (U.S.) national security is unrelated to the acquisition. Moreover, the day after this suit was filed, a key U.S. agency announced a delay of the divestment order. In a related action, the Trump Administration filed to appeal one of the injunctions blocking it from moving forward on banning the People’s Republic of China (PRC) app. Depending on how long it takes for the federal court to resolve this suit, a Biden Administration Department of Justice (DOJ) may take a different tack than the Trump DOJ.

The day before the divestment order was set to take effect, TikTok asked the United States Court of Appeals for the District of Columbia to review “the Presidential Order Regarding the Acquisition of Musical.ly by ByteDance Ltd., 85 Fed. Reg. 51,297 (Aug. 14, 2020) (the “Divestment Order”), and the related action of the Committee on Foreign Investment in the United States (CFIUS), including its determination to reject mitigation, truncate its review and investigation, and refer the matter to the President.” TikTok asserted:

The Divestment Order and the CFIUS Action seek to compel the wholesale divestment of TikTok, a multi-billion-dollar business built on technology developed by Petitioner ByteDance Ltd. (“ByteDance”), based on the government’s purported national security review of a three-year- old transaction that involved a different business. This attempted taking exceeds the authority granted to Respondents under Section 721, which authorizes CFIUS to review and the President to, at most, prohibit a specified “covered transaction” to address risks to national security created by that transaction. Here, that covered transaction was ByteDance’s acquisition of the U.S. business of another Chinese- headquartered company, Musical.ly—a transaction that did not include the core technology or other aspects of the TikTok business that have made it successful and yet which the Divestment Order now seeks to compel ByteDance to divest.

TikTok also made claims that CFIUS violated the Due Process Clause of the Fifth Amendment, violated the Administrative Procedures Act, and is proposing a “taking” illegal under the Fifth Amendment.

And yet, the Department of the Treasury, the lead agency in the CFIUS process, issued a statement, explaining that the deadline for divestiture had been pushed back by 15 days:

The President’s August 14 Order requires ByteDance and TikTok Inc. to undertake specific divestments and other measures to address the national security risk arising from ByteDance’s acquisition of Musical.ly.  Consistent with the Order, the Committee on Foreign Investment in the United States (CFIUS) has granted ByteDance a 15-day extension of the original November 12, 2020 deadline.  This extension will provide the parties and the Committee additional time to resolve this case in a manner that complies with the Order.   

The Trump Administration may successfully argue that a delay of the order means the court cannot rule on TikTok’s suit. Consequently, this suit may well get pushed into a Biden Administration.

TikTok issued this statement along with the filing of its suit:

For a year, TikTok has actively engaged with CFIUS in good faith to address its national security concerns, even as we disagree with its assessment. In the nearly two months since the president gave his preliminary approval to our proposal to satisfy those concerns, we have offered detailed solutions to finalize that agreement—but have received no substantive feedback on our extensive data privacy and security framework.

Of course, because of the CFIUS divestment order, ByteDance seems to have reached an agreement with Oracle and Walmart, but what they exactly agreed to remains an open question.

In mid-September, the Trump Administration paused its notice for implementing the Executive Order (EO) against TikTok because of agreement in principles of a deal that would permit Oracle and Walmart to control a certain percentage of TikTok in the U.S. However, the details of which entity would control what remain murky with ByteDance arguing that U.S. entities will not control TikTok, but assertions to the opposite being made by the company’s U.S. partners. In the weekend before the EO has set to take effect, it appeared Oracle and Walmart would be able to take a collective 20% stake in a new entity TikTok Global that would operate in the U.S. Walmart has been partnering with Microsoft, but when the tech giant failed in its bid, Walmart began talks with Oracle. ByteDance would have a stake in the company but not majority control according to some sources. However, ByteDance began pushing back on that narrative as President Donald Trump declared after word of a deal leaked “if we find that [Oracle and Walmart] don’t have total control, then we’re not going to approve the deal.” Moreover, $5 billion would be used for some sort of educational fund. However, it is hard to tell what exactly would occur and whether this is supposed to be the “finder’s fee” of sorts Trump had said the U.S. would deserve from the deal.

On 19 September, the U.S. Department of Commerce issued a statement pushing back the effective date of the order against TikTik from 20 September to 27 September because of “recent positive developments.” The same day, the U.S. Department of the Treasury released a statement, explaining:

The President has reviewed a deal among Oracle, Walmart, and TikTok Global to address the national security threat posed by TikTok’s operations. Oracle will be responsible for key technology and security responsibilities to protect all U.S. user data. Approval of the transaction is subject to a closing with Oracle and Walmart and necessary documentation and conditions to be approved by Committee on Foreign Investment in the United States (CFIUS). 

TikTok also released a statement, asserting

We’re pleased that today we’ve confirmed a proposal that resolves the Administration’s security concerns and settles questions around TikTok’s future in the US. Our plan is extensive and consistent with previous CFIUS resolutions, including working with Oracle, who will be our trusted cloud and technology provider responsible for fully securing our users’ data. We are committed to protecting our users globally and providing the highest levels of security. Both Oracle and Walmart will take part in a TikTok Global pre-IPO financing round in which they can take up to a 20% cumulative stake in the company. We will also maintain and expand the US as TikTok Global’s headquarters while bringing 25,000 jobs across the country.

Walmart issued its own statement on 19 September:

While there is still work to do on final agreements, we have tentatively agreed to purchase 7.5% of TikTok Global as well as enter into commercial agreements to provide our ecommerce, fulfillment, payments and other omnichannel services to TikTok Global. Our CEO, Doug McMillon, would also serve as one of five board members of the newly created company. In addition, we would work toward an initial public offering of the company in the United States within the next year to bring even more ownership to American citizens. The final transaction will need to be approved by the relevant U.S. government agencies.

The same day, Oracle and Walmart released a joint statement:

  • The President has announced that ByteDance has received tentative approval for an agreement with the U.S. Government to resolve the outstanding issues, which will now include Oracle and Walmart together investing to acquire 20% of the newly formed TikTok Global business.
  • As a part of the deal, TikTok is creating a new company called TikTok Global that will be responsible for providing all TikTok services to users in United States and most of the users in the rest of the world. Today, the administration has conditionally approved a landmark deal where Oracle becomes TikTok’s secure cloud provider.
  • TikTok Global will be majority owned by American investors, including Oracle and Walmart. TikTok Global will be an independent American company, headquartered in the U.S., with four Americans out of the five member Board of Directors.
  • All the TikTok technology will be in possession of TikTok Global, and comply with U.S. laws and privacy regulations. Data privacy for 100 million American TikTok users will be quickly established by moving all American data to Oracle’s Generation 2 Cloud data centers, the most secure cloud data centers in the world.
  • In addition to its equity position, Walmart will bring its omnichannel retail capabilities including its Walmart.com assortment, eCommerce marketplace, fulfillment, payment and measurement-as-a-service advertising service.
  • TikTok Global will create more than 25,000 new jobs in the Unites States and TikTok Global will pay more than $5 billion in new tax dollars to the U.S. Treasury.
  • TikTok Global, together with Oracle, SIG, General Atlantic, Sequoia, Walmart and Coatue will create an educational initiative to develop and deliver an AI-driven online video curriculum to teach children from inner cities to the suburbs, a variety of courses from basic reading and math to science, history and computer engineering.
  • TikTok Global will have an Initial Public Offering (IPO) in less than 12 months and be listed on a U.S. Exchange. After the IPO, U.S. ownership of TikTok Global will increase and continue to grow over time.

A day later, Oracle went further in a statement to the media claiming, “ByteDance will have no ownership in TikTok Global,” which is a different message than the one the company was sending. For example, in a blog post, ByteDance stated “[t]he current plan does not involve the transfer of any algorithms or technology…[but] Oracle has the authority to check the source code of TikTok USA.”

On a related note, the DOJ filed a notice of appeal of an injunction barring the implementation of the TikTok issued in late October. Three TikTok influencers had filed suit and lost their motion for a preliminary injunction. However, after District Court of the District of Columbia granted TikTok’s request to stop the Department of Commerce from enforcing the first part of the order implementing the ban, the three influencers revised their motion and refiled.

Judge Wendy Beetlestone found that the Trump Administration exceeded its powers under the International Emergency Economic Powers Act (IEEPA) in issuing part of its TikTok order effectuating the ban set to take effect on 12 November:

  • Any provision of internet hosting services, occurring on or after 11:59 p.m. eastern standard time on November 12, 2020, enabling the functioning or optimization of the TikTok mobile application[;]
  • Any provision of content delivery network services, occurring on or after 11:59 p.m. eastern standard time on November 12, 2020, enabling the functioning or optimization of the TikTok mobile application[;]
  • Any provision of directly contracted or arranged internet transit or peering services, occurring on or after 11:59 p.m. eastern standard time on November 12, 2020, enabling the functioning or optimization of the TikTok mobile application[;and]
  • Any utilization, occurring on or after 11:59 p.m. eastern standard time on November 12, 2020, of the TikTok mobile application’s constituent code, functions, or services in the functioning of software or services developed and/or accessible within the land and maritime borders of the United States and its territories.

Beetlestone found that the limit on the use of IEEPA powers to regulate information is clearly implicated by Commerce’s order, which proposes to do just that. Consequently, this is not a legal use of IEEPA powers. The judge also found the plaintiffs would be irreparably harmed through a loss of their audiences and brand sponsorships:

Plaintiffs challenge the Commerce Identification on both statutory and constitutional grounds. First, they contend that the Commerce Identification violates both the First and Fifth Amendments to the U.S. Constitution. They then contend that the Commerce Identification violates the Administrative Procedure Act,5 U.S.C. §701 et seq.,as it is both arbitrary and capricious, see id.§706(2)(A), and ultra vires, see id. § 706(2)(C). Plaintiffs’ ultra vires claim consists of three separate arguments: (1) the Commerce Identification contravenes IEEPA’s “informational materials” exception, 50 U.S.C. § 1702(b)(3); (2) the Commerce Identification contravenes IEEPA’s prohibition on the regulation of “personal communication[s] . . . not involv[ing] a transfer of anything of value,” id. § 1702(b)(1), and (3) the Commerce Identification is not responsive to the national emergency declared in the ICTS Executive Order, and therefore requires the declaration of a new national emergency to take effect, see id. §1701(b).

In the first injunction granted against the TikTok ban, the court found that TikTok’s claims on the misuse of IEEPA, 50 U.S.C. §§ 1701–08, the primary authority President Donald Trump relied on in his executive order banning the app, were unpersuasive. The court conceded “IEEPA contains a broad grant of authority to declare national emergencies and to prohibit certain transactions with foreign countries or foreign nationals that pose risks to the national security of the United States.” But, the court noted “IEEPA also contains two express limitations relevant here: the “authority granted to the President . . . does not include the authority to regulate or prohibit, directly or indirectly” either (a) the importation or exportation of “information or informational materials”; or (b) “personal communication[s], which do[] not involve a transfer of anything of value.” The court concluded:

In sum, the TikTok Order and the Secretary’s prohibitions will have the intended effect of stopping U.S. users from communicating (and thus sharing data) on TikTok. To be sure, the ultimate purpose of those prohibitions is to protect the national security by preventing China from accessing that data and skewing content on TikTok. And the government’s actions may not constitute direct regulations or prohibitions of activities carved out by 50 U.S.C. 1702(b). But Plaintiffs have demonstrated that they are likely to succeed on their claim that the prohibitions constitute indirect regulations of “personal communication[s]” or the exchange of “information or informational materials.”

After considering the risks of irreparable harm to TikTok and the equities and public interest, the court decided:

Weighing these interests together with Plaintiffs’ likelihood of succeeding on their IEEPA claim and the irreparable harm that Plaintiffs (and their U.S. users) will suffer absent an injunction, the Court concludes that a preliminary injunction is appropriate.

© 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 Olivier Bergeron from Pexels

Further Reading, Other Developments, and Coming Events (8 October)

Coming Events

  • The European Union Agency for Cybersecurity (ENISA), Europol’s European Cybercrime Centre (EC3) and the Computer Emergency Response Team for the EU Institutions, Bodies and Agencies (CERT-EU) will hold the 4th annual IoT Security Conference series “to raise awareness on the security challenges facing the Internet of Things (IoT) ecosystem across the European Union:”
    • Artificial Intelligence – 14 October at 15:00 to 16:30 CET
    • Supply Chain for IoT – 21 October at 15:00 to 16:30 CET
  • The Federal Communications Commission (FCC) will hold an open commission meeting on 27 October, and the agency has released a tentative agenda:
    • Restoring Internet Freedom Order Remand – The Commission will consider an Order on Remand that would respond to the remand from the U.S. Court of Appeals for the D.C. Circuit and conclude that the Restoring Internet Freedom Order promotes public safety, facilitates broadband infrastructure deployment, and allows the Commission to continue to provide Lifeline support for broadband Internet access service. (WC Docket Nos. 17-108, 17-287, 11- 42)
    • Establishing a 5G Fund for Rural America – The Commission will consider a Report and Order that would establish the 5G Fund for Rural America to ensure that all Americans have access to the next generation of wireless connectivity. (GN Docket No. 20-32)
    • Increasing Unlicensed Wireless Opportunities in TV White Spaces – The Commission will consider a Report and Order that would increase opportunities for unlicensed white space devices to operate on broadcast television channels 2-35 and expand wireless broadband connectivity in rural and underserved areas. (ET Docket No. 20-36)
    • Streamlining State and Local Approval of Certain Wireless Structure Modifications –
    • The Commission will consider a Report and Order that would further accelerate the deployment of 5G by providing that modifications to existing towers involving limited ground excavation or deployment would be subject to streamlined state and local review pursuant to section 6409(a) of the Spectrum Act of 2012. (WT Docket No. 19-250; RM-11849)
    • Revitalizing AM Radio Service with All-Digital Broadcast Option – The Commission will consider a Report and Order that would authorize AM stations to transition to an all-digital signal on a voluntary basis and would also adopt technical specifications for such stations. (MB Docket Nos. 13-249, 19-311)
    • Expanding Audio Description of Video Content to More TV Markets – The Commission will consider a Report and Order that would expand audio description requirements to 40 additional television markets over the next four years in order to increase the amount of video programming that is accessible to blind and visually impaired Americans. (MB Docket No. 11-43)
    • Modernizing Unbundling and Resale Requirements – The Commission will consider a Report and Order to modernize the Commission’s unbundling and resale regulations, eliminating requirements where they stifle broadband deployment and the transition to next- generation networks, but preserving them where they are still necessary to promote robust intermodal competition. (WC Docket No. 19-308)
    • Enforcement Bureau Action – The Commission will consider an enforcement action.
  • On October 29, the Federal Trade Commission (FTC) will hold a seminar titled “Green Lights & Red Flags: FTC Rules of the Road for Business workshop” that “will bring together Ohio business owners and marketing executives with national and state legal experts to provide practical insights to business and legal professionals about how established consumer protection principles apply in today’s fast-paced marketplace.”

Other Developments

  • Harvard University’s Berkman Klein Center for Internet & Society published a study, “Mail-In Voter Fraud: Anatomy of a Disinformation Campaign,” which found a concerted, almost certainly coordinated campaign led by President Donald Trump, the Republican Party, and conservative media outlets to claim against all evidence that mail voting is rife with fraud. The study points to structural issues in the United States (U.S.) and the broader media that allow parties to disseminate disinformation and propaganda. The authors found the traditional print and television media more effective and complicit in spreading lies and disinformation than social media platforms like Facebook and Twitter. The Berkman Klein Center explained:
    • The claim that election fraud is a major concern with mail-in ballots has become the central threat to election participation during the Covid-19 pandemic and to the legitimacy of the outcome of the election across the political spectrum. President Trump has repeatedly cited his concerns over voter fraud associated with mail-in ballots as a reason that he may not abide by an adverse electoral outcome. Polling conducted in September 2020 suggests that nearly half of Republicans agree with the president that election fraud is a major concern associated with expanded mail-in voting during the pandemic. Few Democrats share that belief. Despite the consensus among independent academic and journalistic investigations that voter fraud is rare and extremely unlikely to determine a national election, tens of millions of Americans believe the opposite. This is a study of the disinformation campaign that led to widespread acceptance of this apparently false belief and to its partisan distribution pattern. Contrary to the focus of most contemporary work on disinformation, our findings suggest that this highly effective disinformation campaign, with potentially profound effects for both participation in and the legitimacy of the 2020 election, was an elite-driven, mass-media led process. Social media played only a secondary and supportive role.
    • Our results are based on analyzing over fifty-five thousand online media stories, five million tweets, and seventy-five thousand posts on public Facebook pages garnering millions of engagements. They are consistent with our findings about the American political media ecosystem from 2015-2018, published in  Network Propaganda , in which we found that Fox News and Donald Trump’s own campaign were far more influential in spreading false beliefs than Russian trolls or Facebook clickbait artists. This dynamic appears to be even more pronounced in this election cycle, likely because Donald Trump’s position as president and his leadership of the Republican Party allow him to operate directly through political and media elites, rather than relying on online media as he did when he sought to advance his then-still-insurgent positions in 2015 and the first half of 2016.
    • Our findings here suggest that Donald Trump has perfected the art of harnessing mass media to disseminate and at times reinforce his disinformation campaign by using three core standard practices of professional journalism. These three are: elite institutional focus (if the President says it, it’s news); headline seeking (if it bleeds, it leads); and  balance , neutrality, or the avoidance of the appearance of taking a side. He uses the first two in combination to summon coverage at will, and has used them continuously to set the agenda surrounding mail-in voting through a combination of tweets, press conferences, and television interviews on Fox News. He relies on the latter professional practice to keep audiences that are not politically pre-committed and have relatively low political knowledge confused, because it limits the degree to which professional journalists in mass media organizations are willing or able to directly call the voter fraud frame disinformation. The president is, however, not acting alone. Throughout the first six months of the disinformation campaign, the Republican National Committee (RNC) and staff from the Trump campaign appear repeatedly and consistently on message at the same moments, suggesting an institutionalized rather than individual disinformation campaign. The efforts of the president and the Republican Party are supported by the right-wing media ecosystem, primarily Fox News and talk radio functioning in effect as a party press. These reinforce the message, provide the president a platform, and marginalize or attack those Republican leaders or any conservative media personalities who insist that there is no evidence of widespread voter fraud associated with mail-in voting.
    • The primary cure for the elite-driven, mass media communicated information disorder we observe here is unlikely to be more fact checking on Facebook. Instead, it is likely to require more aggressive policing by traditional professional media, the Associated Press, the television networks, and local TV news editors of whether and how they cover Trump’s propaganda efforts, and how they educate their audiences about the disinformation campaign the president and the Republican Party have waged.
  • The Senate Minority Leader and the top Democrats on three committees sent a letter to the acting Secretary of Homeland Security asking him to “release a document that shows President Donald Trump’s attacks on American Elections are consistent with a foreign influence campaign.” Senate Minority Leader Chuck Schumer (D-NY), Senate Intelligence Committee Ranking Member Mark Warner (D-VA), Senate Rules Committee Ranking Member Amy Klobuchar (D-MN), Senate Homeland Security and Governmental Affairs Committee Ranking Member Gary Peters (D-MI), and Senator Ron Wyden (D-OR) wrote to acting Secretary of Homeland Security Chad Wolf:
    • We write to urge you to immediately release to the public a September 3, 2020, analysis produced by the Department’s Office of Intelligence and Analysis.  This document demonstrates that a foreign actor is attempting to undermine faith in the US electoral system, particularly vote-by-mail systems, in a manner that is consistent with the rhetoric being used by President Trump, Attorney General Barr, and others.
    • The document has been marked ‘Unclassified/For Official Use Only,’ meaning that its release would not pose a risk to sources and methods and that it has already been widely distributed around the country through unclassified channels. It is now critical and urgent that the American people have access to this document so that they can understand the context of Trump’s statements and actions.
  • Representatives Abigail Spanberger (D-VA) and John Katko (R-NY) introduced the “Foreign Agent Disclaimer Enhancement (FADE) Act” “to protect against the influence of foreign nations that seek to weaken the U.S. electoral system and sow division through online disinformation campaigns.” This bill would close a loophole in the Foreign Agents Registration Act (FARA) that does not require foreign agents to disclose social media posts intended to persuade Americans as they must for other forms of communication. They provided the context for the legislation:
    • This week, the Federal Bureau of Investigation alerted Twitter that accounts likely based in Iran attempted to spread disinformation during the U.S. presidential debate.
    • An April 2020 State Department report warned that China, Iran, and Russia are using the COVID-19 crisis to launch a propaganda and disinformation onslaught against the United States.
    • Spanberger and Katko summarized the bill in their press release:
      • The Foreign Agent Disclaimer Enhancement (FADE) Act would increase transparency by requiring disclaimers attributing political content to a foreign principal be embedded on the face of a social media post itself. With this new requirement, disclaimers would remain with a post whenever the post is subsequently shared. The FADE Act would also clarify that these disclaimer requirements apply to the internet and apply to any political communications directed at the United States — regardless of the foreign agent’s location around the world.
      • To ensure enforcement of these new transparency measures, the FADE Act would requirethe Department of Justice (DOJ) to notify online platforms if a foreign agent does not meet disclaimer requirements for posts on their platforms, and in these cases, require the platform to remove the materials and use reasonable efforts to inform recipients of the materials that the information they saw was disseminated by a foreign agent. Additionally, the bipartisan bill would requireDOJ to prepare a report to Congress on enforcement challenges.
  • Europol issued its annual “Internet Organised Crime Threat Assessment (IOCTA) 2020” that “provides a unique law enforcement- focused assessment of emerging challenges and key developments in the area of cybercrime” in the European Union (EU).
  • Europol highlighted its findings:
    • Cross-Cutting Crime Facilitators And Challenges To Criminal Investigations
      • Social engineering remains a top threat to facilitate other types of cybercrime.
      • Cryptocurrencies continue to facilitate payments for various forms of cybercrime, as developments evolve with respect to privacy- oriented crypto coins and services.
      • Challenges with reporting hinder the ability to create an accurate overview of crime prevalence across the EU.
    • Cyber-Dependent Crime
      • Ransomware remains the most dominant threat as criminals increase pressure by threatening publication of data if victims do not pay.
      • Ransomware on third-party providers also creates potential significant damage for other organisations in the supply chain and critical infrastructure.
      • Emotet is omnipresent given its versatile use and leads the way as the benchmark of modern malware.
      • The threat potential of Distributed Denial of Service (DDoS) attacks is higher than its current impact in the EU.
    • Child Sexual Exploitation Online
      • The amount of online Child sexual abuse material (CSAM) detected continues to increase, further exacerbated by the COVID-19 crisis, which has serious consequences for the capacity of law enforcement authorities.
      • The use of encrypted chat apps and industry proposals to expand this market pose a substantial risk for abuse and make it more difficult for law enforcement to detect and investigate online Child sexual exploitation (CSE) activities.
      • Online offender communities exhibit considerable resilience and are continuously evolving.
      • Livestreaming of child sexual abuse continues to increase and became even more prevalent during the COVID-19 crisis.
      • The commercialisation of online CSE is becoming a more widespread issue, with individuals uploading material to hosting sites and subsequently acquiring credit on the basis of the number of downloads.
    • Payment Fraud
      • SIM swapping is a key trend that allows perpetrators to take over accounts and has demonstrated a steep rise over the last year.
      • Business email compromise (BEC) remains an area of concern as it has increased, grown in sophistication, and become more targeted.
      • Online investment fraud is one of the fastest growing crimes, generating millions in losses and affecting thousands of victims.
      • Card-not-present (CNP) fraud continues to increase as criminals diversify in terms of target sectors and electronic skimming (e-skimming) modi operandi.
    • The Criminal Abuse Of The Darkweb
      • The Darkweb environment has remained volatile, lifecycles of Darkweb market places have shortened, and no clear dominant market has risen over the past year compared to previous years to fill the vacuum left by the takedowns in 2019.
      • The nature of the Darkweb community at administrator-level shows how adaptive it is under challenging times, including more effective cooperation in the search for better security solutions and safe Darkweb interaction.
      • There has been an increase in the use of privacy- enhanced cryptocurrencies and an emergence of privacy-enhanced coinjoin concepts, such as Wasabi and Samurai.
      • Surface web e-commerce sites and encrypted communication platforms offer an additional dimension to Darkweb trading to enhance the overall business model.
  • “43 center-right organizations, think tanks, and policy experts” wrote Senate Majority Whip John Thune (R-SD) “for his leadership and support for the American competitive approach to 5G deployment.” Last week, Thune and 18 Republican colleagues sent President Donald Trump a letter “to express our concerns about a Request For Information (RFI) released by the Department of Defense (DOD) that contradicts the successful free-market strategy you have embraced for 5G.” Late last month, the United States Department of Defense (DOD) released a  RFI on the possibility of the agency sharing its prized portions of electromagnetic spectrum with commercial providers to speed the development and adoption of 5G in the United States.
    • The 43 groups argued:
      • We too are concerned with the Department of Defense Request for Information on a government-managed process for 5G development and are alarmed with how quickly it is proceeding.  Even more disturbing are the rumors that the RFI was only for show and that the DoD already has an RFP it plans to greenlight. 
      • A government-run 5G backbone, wholesale network, or whatever name it goes by, is nationalization of private business. Spectrum sharing is something that must be considered as the nation moves forward with private networks, but it is not a reason for a government takeover. For a government-run network to happen, the federal government would have to either renege on licenses granted to private users or hoard spectrum at the expense of private industry. Either approach would upend well-established licensure policies at the FCC that establish certainty in operating and maintaining complex networks and create massive unnecessary delays to launching 5G networks. Moreover, the government should not be in the business of “competing” with private industry. That’s the business model of China and Russia, not the United States. 
  • The top Democrat on the Senate Intelligence Committee wrote Facebook, Twitter, and Google, urging the companies “to implement robust accountability and transparency standards ahead of the November election, including requirements outlined in the Honest Ads Act…to help prevent foreign interference in elections and improve the transparency of online political advertisements” according to his press release. Senator Mark Warner   (D-VA) asserted that “[i]n individual letters to FacebookGoogle, and Twitter, [he] detailed the various ways in which each company continues to contribute to the spread of disinformation, viral misinformation, and voter suppression efforts.” Warner “also warned about the imminent risk of bad actors once again weaponizing American-bred social media tools to undermine democracy ahead of the November election, and urged each company to take proactive measures to safeguard against these efforts.” Warner specified:
    • In his letter to Facebook, [he] criticized the platform’s efforts to label manipulated or synthetic content, describing these as “wholly inadequate.” He also raised alarm with instances of Facebook’s amplification of harmful content.
    • Similarly, in a letter to Google, [he] raised concern with the company’s efforts to combat harmful misinformation – particularly disinformation about voting, spread by right-leaning YouTube channels. He also criticized the comprehensiveness of Google’s ad archive, which presently excludes issue ads.
    • In his letter to Twitter, which has banned paid political content and placed restrictions on cause-based advertising, [he] noted that doctored political content continues to spread organically without adequate labeling that slows its spread or contextualizes it for users.
  • Representative Lauren Underwood (D-IL), the new Chair of the House Homeland Security Committee’s Cybersecurity, Infrastructure Protection, and Innovation Subcommittee, wrote Facebook, Twitter, and YouTube, urging them “to address ongoing reports of election-related disinformation targeting Black voters on their platforms” per her press release. She argued “[d]uring the 2016 election, social media platforms were used by malicious actors attempting to silence Black voters and sow racial division…[and] [f]our years later, social media companies have made too little progress toward containing this growing threat.” Underwood “requested information on the steps the companies are taking to prevent voter suppression, interference, and disinformation targeting Black voters.”

Further Reading

  • Judge Orders Twitter To Unmask FBI Impersonator Who Set Off Seth Rich Conspiracy” By Bobby Allyn — NPR. A magistrate judge in California denied Twitter’s motion to quash a subpoena in order to not reveal the account information of an anonymous user who spread lies about deceased Democratic National Committee staffer Seth Rich and his family regarding the Russian Federation’s interference in the 2016 election.
  • Justices wary of upending tech industry in Google v. Oracle Supreme Court fight” By Tucker Higgins — CNBC. This week, the Supreme Court of the United States heard oral arguments in the decade long legal war between Google and Oracle arising from the latter’s claim that the former infringed its ownership rights by using roughly 11,500 lines of code to create its Android operating system from an application programming interface developed by Sun Microsystems, a company bought by Oracle. This case could have huge ramifications for the technology industry if Oracle wins because it could make the development of new products and services much harder.
  • Facebook to temporarily halt political ads in U.S. after polls close Nov. 3, broadening earlier restrictions” By Elizabeth Dwoskin — The Washington Post. In its newest announcement, Facebook announced it will not accept political or issues advertising in the week after election day. This effort is the latest measure the platform has announced to address misinformation and disinformation. Facebook will also label efforts of candidates to claim an election has been decided if it, in fact, has not been. The platform will also remove posts that aim to intimidate voters or suppress the voting turnout.
  • Leaked: Confidential Amazon memo reveals new software to track unions” By Jason Del Rey and Shirin Ghaffary — recode. The tech giant is turning its data collection and analysis capabilities on its workforce in an effort to prevent unionizing at the United States’ (U.S.) second largest employer.
  • QAnon High Priest Was Just Trolling Away as a Citigroup Tech Executive” By William Turton and Joshua Brustein — Bloomberg. The fascinating if not horrifying story of how a seemingly, well-to-do mild-mannered tech specialist became one of the key figures in the QAnon conspiracy.

© 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 John Mounsey from Pixabay

TikTok Deal Struck And WeChat Wins Injunction

A TikTok deal may be taking shape even though there are indications the details have not been hammered out entirely. A federal court blocked implementation of the WeChat ban.

Over the weekend with the 20 September effective dates looming on the TikTok and WeChat notices, there were separate developments that delayed implementation of the bans on the two apps from the People’s Republic of China (PRC). It appeared the Trump Administration, ByteDance, and potential United States (U.S.) partners were closing in on a deal even as there continued to be disputes as to the composition and nature of the new entity that would house TikTok in the U.S. The ban against WeChat was blocked by a U.S. court, a decision sure to be appealed.

On 19 September, a magistrate judge in San Francisco granted a preliminary injunction against the Trump Administration’s implementation of the WeChat order. As explained in a footnote, “[t]he plaintiffs are U.S. WeChat Users Alliance, a nonprofit formed to challenge the WeChat Executive Order, and individual and business users.” In short, they contended that the WeChat ban

(1) violates the First Amendment to the U.S. Constitution,

(2) violates the Fifth Amendment,

(3) violates the Religious Freedom Restoration Act, 42 U.S.C. § 2000bb(1)(a),

(4) was not a lawful exercise of the President’s and the Secretary’s authority under the International Economic Emergency Powers Act (“IEEPA”) — which allows the President to prohibit “transactions” in the interest of national security — because the IEEPA, 50 U.S.C. § 1702(b)(1), does not allow them to regulate personal communications, and

(5) violates the Administrative Procedures Act (“APA”) because the Secretary exceeded his authority under the IEEPA and should have promulgated the rule through the notice-and-comment rulemaking procedures in 5 U.S.C. § 553(b).

The judge granted the motion for a preliminary injunction “on the ground that the plaintiffs have shown serious questions going to the merits of the First Amendment claim, the balance of hardships tips in the plaintiffs’ favor, and the plaintiffs establish sufficiently the other elements for preliminary-injunctive relief.” The judge seemed most persuaded by this claim and summarized the plaintiffs’ argument:

  • First, they contend, effectively banning WeChat — which serves as a virtual public square for the Chinese-speaking and Chinese-American community in the United States and is (as a practical matter) their only means of communication — forecloses meaningful access to communication in their community and thereby operates as a prior restraint on their right to free speech that does not survive strict scrutiny.
  • Second, even if the prohibited transactions are content-neutral time-place-or-manner restrictions, they do not survive intermediate scrutiny because the complete ban is not narrowly tailored to address the government’s significant interest in national security.

The Trump Administration will almost certainly appeal this decision, but it remains to be seen how quickly the case moves through the court system.

Also, over the weekend, the Trump Administration paused its notice for implementing the EO against TikTok because of agreement in principles of a deal that would permit Oracle and Walmart to control a certain percentage of TikTok in the U.S. However, the details of which entity would control what remain murky with ByteDance arguing that U.S. entities will not control TikTok, but assertions to the opposite being made by the company’s U.S. partners. Over the weekend, it appeared Oracle and Walmart would be able to take a collective 20% stake in a new entity TikTok Global that would operate in the U.S. Walmart has been partnering with Microsoft, but when the tech giant failed in its bid, Walmart began talks with Oracle. ByteDance would have a stake in the company but not majority control according to some sources. However, ByteDance began pushing back on that narrative as President Donald Trump declared this morning “if we find that [Oracle and Walmart] don’t have total control, then we’re not going to approve the deal.” Moreover, $5 billion would be used for some sort of educational fund. However, it is hard to tell what exactly would occur and whether this is supposed to be the “finder’s fee” of sorts Trump had said the U.S. would deserve from the deal.

On 19 September, the U.S. Department of Commerce issued a statement pushing back the effective date of the order against TikTik from 20 September to 27 September because of “recent positive developments.” The same day, the U.S. Department of the Treasury released a statement, explaining:

The President has reviewed a deal among Oracle, Walmart, and TikTok Global to address the national security threat posed by TikTok’s operations. Oracle will be responsible for key technology and security responsibilities to protect all U.S. user data. Approval of the transaction is subject to a closing with Oracle and Walmart and necessary documentation and conditions to be approved by Committee on Foreign Investment in the United States (CFIUS). 

TikTok also released a statement, asserting

We’re pleased that today we’ve confirmed a proposal that resolves the Administration’s security concerns and settles questions around TikTok’s future in the US. Our plan is extensive and consistent with previous CFIUS resolutions, including working with Oracle, who will be our trusted cloud and technology provider responsible for fully securing our users’ data. We are committed to protecting our users globally and providing the highest levels of security. Both Oracle and Walmart will take part in a TikTok Global pre-IPO financing round in which they can take up to a 20% cumulative stake in the company. We will also maintain and expand the US as TikTok Global’s headquarters while bringing 25,000 jobs across the country.

Walmart issued its own statement on 19 September:

While there is still work to do on final agreements, we have tentatively agreed to purchase 7.5% of TikTok Global as well as enter into commercial agreements to provide our ecommerce, fulfillment, payments and other omnichannel services to TikTok Global. Our CEO, Doug McMillon, would also serve as one of five board members of the newly created company. In addition, we would work toward an initial public offering of the company in the United States within the next year to bring even more ownership to American citizens. The final transaction will need to be approved by the relevant U.S. government agencies.

The same day, Oracle and Walmart released a joint statement:

  • The President has announced that ByteDance has received tentative approval for an agreement with the U.S. Government to resolve the outstanding issues, which will now include Oracle and Walmart together investing to acquire 20% of the newly formed TikTok Global business.
  • As a part of the deal, TikTok is creating a new company called TikTok Global that will be responsible for providing all TikTok services to users in United States and most of the users in the rest of the world. Today, the administration has conditionally approved a landmark deal where Oracle becomes TikTok’s secure cloud provider.
  • TikTok Global will be majority owned by American investors, including Oracle and Walmart. TikTok Global will be an independent American company, headquartered in the U.S., with four Americans out of the five member Board of Directors.
  • All the TikTok technology will be in possession of TikTok Global, and comply with U.S. laws and privacy regulations. Data privacy for 100 million American TikTok users will be quickly established by moving all American data to Oracle’s Generation 2 Cloud data centers, the most secure cloud data centers in the world.
  • In addition to its equity position, Walmart will bring its omnichannel retail capabilities including its Walmart.com assortment, eCommerce marketplace, fulfillment, payment and measurement-as-a-service advertising service.
  • TikTok Global will create more than 25,000 new jobs in the Unites States and TikTok Global will pay more than $5 billion in new tax dollars to the U.S. Treasury.
  • TikTok Global, together with Oracle, SIG, General Atlantic, Sequoia, Walmart and Coatue will create an educational initiative to develop and deliver an AI-driven online video curriculum to teach children from inner cities to the suburbs, a variety of courses from basic reading and math to science, history and computer engineering.
  • TikTok Global will have an Initial Public Offering (IPO) in less than 12 months and be listed on a U.S. Exchange. After the IPO, U.S. ownership of TikTok Global will increase and continue to grow over time.

Today, Oracle went further in a statement to the media claiming, “ByteDance will have no ownership in TikTok Global,” which is a different message than the one the company was sending. For example, in a blog post, ByteDance stated “[t]he current plan does not involve the transfer of any algorithms or technology…[but] Oracle has the authority to check the source code of TikTok USA.”

Late last week, the Trump Administration issued orders barring TikTok and WeChat pursuant to executive orders issued an “Executive Order on Addressing the Threat Posed by TikTok” and an “Executive Order on Addressing the Threat Posed by WeChat” that bar any transactions with the companies that made, distribute, and operate TikTok and WeChat respectively. The U.S. Department of Commerce (Commerce) issued orders effectuating the executive orders, which were set to take effect this past weekend. In a press release, Commerce explained:

As of September 20, 2020, the following transactions are prohibited:

  1. Any provision of service to distribute or maintain the WeChat or TikTok mobile applications, constituent code, or application updates through an online mobile application store in the U.S.;
  2. Any provision of services through the WeChat mobile application for the purpose of transferring funds or processing payments within the U.S.

As of September 20, 2020, for WeChat and as of November 12, 2020, for TikTokthe following transactions are prohibited:

  1. Any provision of internet hosting services enabling the functioning or optimization of the mobile application in the U.S.;
  2. Any provision of content delivery network services enabling the functioning or optimization of the mobile application in the U.S.;
  3. Any provision directly contracted or arranged internet transit or peering services enabling the function or optimization of the mobile application within the U.S.;
  4. Any utilization of the mobile application’s constituent code, functions, or services in the functioning of software or services developed and/or accessible within the U.S.

Commerce added:

Any other prohibitive transaction relating to WeChat or TikTok may be identified at a future date. Should the U.S. Government determine that WeChat’s or TikTok’s illicit behavior is being replicated by another app somehow outside the scope of these executive orders, the President has the authority to consider whether additional orders may be appropriate to address such activities. The President has provided until November 12 for the national security concerns posed by TikTok to be resolved. If they are, the prohibitions in this order may be lifted.

Commerce has submitted notices to be published this week in the Federal Register identifying the transactions that will be illegal regarding TikTok and WeChat:

  • Pursuant to Executive Order 13942, the Secretary of Commerce is publishing the list of prohibited transactions by any person, or with respect to any property, subject to the jurisdiction of the United States, with ByteDance Ltd. (a.k.a. Zìjié Tiàodòng), Beijing, China, or its subsidiaries, including TikTok Inc., in which any such company has any interest, to address the national emergency with respect to the information and communications technology and services supply chain declared in Executive Order 13873, May 15, 2019 (Securing the Information and Communications Technology and Services Supply Chain), and particularly to address the threat identified in Executive Order 13942 posed by mobile application TikTok.
  • Pursuant to Executive Order 13943, the Secretary of Commerce is publishing this Identification of Prohibited Transactions related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd. (a.k.a. Téngxùn Kònggŭ Yŏuxiàn Gōngsī), Shenzhen, China, or any subsidiary of that entity, to address the national emergency with respect to the information and communications technology and services supply chain declared in Executive Order 13873, May 15, 2019 (Securing the Information and Communications Technology and Services Supply Chain), and particularly to address the threat identified in Executive Order 13943 posed by mobile application WeChat.

© 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 chuttersnap on Unsplash

Uncertainty As Deadlines Approach On TikTok and WeChat EOs

It is still not clear how matters will play out with a proposed Oracle/TikTok deal and the ban on WeChat (and possibly TikTok if an acceptable deal cannot be made.)

Today, the Trump Administration issued orders barring TikTok and WeChat pursuant to executive orders issued an “Executive Order on Addressing the Threat Posed by TikTok” and an “Executive Order on Addressing the Threat Posed by WeChat” that bar any transactions with the companies that made, distribute, and operate TikTok and WeChat respectively, the former being much more popular in the United States (U.S.) than the latter. Working in the background is a potential deal between United States’ (U.S.) company Oracle and ByteDance that may address U.S. concerns about TikTok. On this front, there have been multiple stories from the Trump Administration about the positions of stakeholders on whether Oracle’s proposed role as a “trusted technology partner” will satisfy the national security concerns articulated in the executive order banning the app and the order from the United States government to ByteDance to divest a key part of their platform. Moreover, there is growing pressure from Republicans in Congress to reject the Oracle/TikTok arrangement as it stands.

In his public remarks this week, President Donald Trump seemed underwhelmed about the proposed Oracle/TikTok deal. He said that “[c]onceptually, I can tell you I don’t like [ByteDance maintaining a stake].” Trump stated “[i]f that’s the case, I’m not going to be happy with that.” He added any acceptable deal “has to be 100 percent as far as national security is concerned, and no, I’m not prepared to sign off on anything…[and] I have to see the deal.” On the other hand, Secretary of the Treasury and chair of Committee on Foreign Investment in the United States (CFIUS) Steven Mnuchin seemed to be taking a different view. He stated “I will just say from our standpoint, we’ll need to make sure that the code is, one, secure, Americans’ data is secure, that the phones are secure and we’ll be looking to have discussions with Oracle over the next few days with our technical teams.” And to this end, the New York Times is reporting that ByteDance has accepted some unspecified changes to the deal in order to address national security concerns, and Reuters is claiming ByteDance has agreed to an initial public offering within a year.

As noted, the U.S. Department of Commerce (Commerce) issued orders effectuating the executive orders, which are set to take effect this weekend. In a press release, Commerce explained:

As of September 20, 2020, the following transactions are prohibited:

  1. Any provision of service to distribute or maintain the WeChat or TikTok mobile applications, constituent code, or application updates through an online mobile application store in the U.S.;
  2. Any provision of services through the WeChat mobile application for the purpose of transferring funds or processing payments within the U.S.

As of September 20, 2020, for WeChat and as of November 12, 2020, for TikTokthe following transactions are prohibited:

  1. Any provision of internet hosting services enabling the functioning or optimization of the mobile application in the U.S.;
  2. Any provision of content delivery network services enabling the functioning or optimization of the mobile application in the U.S.;
  3. Any provision directly contracted or arranged internet transit or peering services enabling the function or optimization of the mobile application within the U.S.;
  4. Any utilization of the mobile application’s constituent code, functions, or services in the functioning of software or services developed and/or accessible within the U.S.

Commerce added:

Any other prohibitive transaction relating to WeChat or TikTok may be identified at a future date. Should the U.S. Government determine that WeChat’s or TikTok’s illicit behavior is being replicated by another app somehow outside the scope of these executive orders, the President has the authority to consider whether additional orders may be appropriate to address such activities. The President has provided until November 12 for the national security concerns posed by TikTok to be resolved. If they are, the prohibitions in this order may be lifted.

Commerce has submitted notices to be published next week in the Federal Register identifying the transactions that will be illegal regarding TikTok and WeChat:

  • Pursuant to Executive Order 13942, the Secretary of Commerce is publishing the list of prohibited transactions by any person, or with respect to any property, subject to the jurisdiction of the United States, with ByteDance Ltd. (a.k.a. Zìjié Tiàodòng), Beijing, China, or its subsidiaries, including TikTok Inc., in which any such company has any interest, to address the national emergency with respect to the information and communications technology and services supply chain declared in Executive Order 13873, May 15, 2019 (Securing the Information and Communications Technology and Services Supply Chain), and particularly to address the threat identified in Executive Order 13942 posed by mobile application TikTok.
  • Pursuant to Executive Order 13943, the Secretary of Commerce is publishing this Identification of Prohibited Transactions related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd. (a.k.a. Téngxùn Kònggŭ Yŏuxiàn Gōngsī), Shenzhen, China, or any subsidiary of that entity, to address the national emergency with respect to the information and communications technology and services supply chain declared in Executive Order 13873, May 15, 2019 (Securing the Information and Communications Technology and Services Supply Chain), and particularly to address the threat identified in Executive Order 13943 posed by mobile application WeChat.

While the TikTok order could be rescinded if a deal with Oracle is approved by the U.S. government, it seems unlikely that the WeChat order will be undone, at least in the short term. Moreover, these orders will undoubtedly be challenged further in court. Last month, TikTok filed suit in United States federal court in Northern California, asking for an injunction to stop enforcement of the EO and a declaration that it is illegal. It is possible the company, along with Tencent, WeChat’s parent, ask a federal court to stop the Trump Administration from proceeding.

Moreover, there are questions about enforcement, for the Administration cannot reasonably expect people in the U.S. to stop using and delete TikTok and WeChat. There may also be a case to be made on First Amendment grounds that the orders violate rights of free speech and association.

As mentioned, a number of Republicans have come out against the Oracle/TikTok deal. At the beginning of the week, Senator Josh Hawley (R-MO) wrote Mnuchin “calling on CFIUS to reject Oracle’s proposed partnership with ByteDance to obtain control of TikTok’s U.S. operations…[because]…the proposed partnership allows for continued Chinese Communist Party (CCP) control of TikTok, putting American data at risk and violating President Trump’s executive order.” Hawley added:

CFIUS should promptly reject any Oracle-ByteDance collaboration and send the ball back to ByteDance’s court so that the company can come up with a more acceptable solution. ByteDance can still pursue a full sale of TikTok, its code, and its algorithm to a U.S. company, so that the app can be rebuilt from the ground up to remove any trace of CCP influence.

Acting Senate Intelligence Committee Chair Marco Rubio (R-FL), Senate Commerce, Science, and Transportation Committee Chair Roger Wicker (R-MS), and Thom Tillis (R-NC), Rick Scott (R-FL), Dan Sullivan (R-AK), and John Cornyn (R-TX) sent a letter to the President “outlining significant concerns regarding reports that Oracle Corp. confirmed a deal with ByteDance to become a “trusted technology provider” for TikTok’s U.S. operations, including that the “arrangement could violate the requirements set about in the August 6, 2020 Executive Order on Addressing the Threat Posed by TikTok and would do little to satisfy the range of concerns expressed in that order.”

Senator Ted Cruz (R-TX) also wrote Mnuchin arguing:

The Chinese Communist Party and its expansionist actions represent a threat the United States, its interests, and its allies. This Administration has correctly recognized this threat and has taken substantial counter-measures in response to protect our national security. I urge you to do the same when reviewing the newly submitted plan of a transaction between the Chinese company ByteDance and Oracle.

So far, Democrats in Congress, and the Biden campaign, have remained silent, apparently willing to let Republicans criticize the proposed deal from the right. The White House may ultimately prove susceptible to criticism and seek a modified deal to allay these concerns. However, these Republican Senators seem to be laying out a case for a much more dramatic transaction, but one that would likely run afoul of new regulations issued by the People’s Republic of China on export controls. Late last month, two PRC agencies changed the PRC’s export control rules for the first time since 2008 to likely have leverage over TikTok’s sale to a U.S. entity. Ostensibly, the changes are “to regulate technology exports, promote scientific and technological progress and economic and technological cooperation, and maintain national economic security,” but the inclusion of “personalised information recommendation service technology based on data analysis” and “artificial intelligence interactive interfaces” likely point to ByteDance’s app, TikTok. In fact, a researcher with the PRC Ministry of Commerce was quoted as asserting “[t]he time to publish the new update of the export control list has been expedited due to the TikTok sale.”

© 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 雪飞 王 from Pixabay

Further Reading, Other Developments, and Coming Events (16 September)

Coming Events

  • The United States’ Department of Homeland Security’s (DHS) Cybersecurity and Infrastructure Security Agency (CISA) announced that its third annual National Cybersecurity Summit “will be held virtually as a series of webinars every Wednesday for four weeks beginning September 16 and ending October 7:”
    • September 16: Key Cyber Insights
    • September 23: Leading the Digital Transformation
    • September 30: Diversity in Cybersecurity
    • October 7: Defending our Democracy
    • One can register for the event here.
  • The House Homeland Security Committee will hold a hearing titled “Worldwide Threats to the Homeland” on 17 September with the following witnesses:
    • Chad Wolf, Department of Homeland Security
    • Christopher Wray, Director, Federal Bureau of Investigation
    • Christopher Miller, Director, National Counterterrorism Center (NCTC)
  • On 17 September, the House Energy and Commerce Committee’s Communications & technology Subcommittee will hold a hearing titled “Trump FCC: Four Years of Lost Opportunities.”
  • The House Armed Services Committee’s Intelligence and Emerging Threats and Capabilities Subcommittee will hold a hearing’ titled “Interim Review of the National Security Commission on Artificial Intelligence Effort and Recommendations” on 17 September with these witnesses:
    • Dr. Eric Schmidt , Chairman, National Security Commission on Artificial Intelligence 
    • HON Robert Work, Vice Chairman, National Security Commission on Artificial Intelligence, HON Mignon Clyburn, Commissioner, National Security Commission on Artificial Intelligence 
    • Dr. José-Marie Griffiths, Commissioner, National Security Commission on Artificial Intelligence
  • On 22 September, the Federal Trade Commission (FTC) will hold a public workshop “to examine the potential benefits and challenges to consumers and competition raised by data portability.” The agency has released its agenda and explained:
    • The workshop will also feature four panel discussions that will focus on: case studies on data portability rights in the European Union, India, and California; case studies on financial and health portability regimes; reconciling the benefits and risks of data portability; and the material challenges and solutions to realizing data portability’s potential.
  • The Senate Judiciary Committee’s Intellectual Property Subcommittee will hold a hearing “Examining Threats to American Intellectual Property: Cyber-attacks and Counterfeits During the COVID-19 Pandemic” with these witnesses:
    • Adam Hickey, Deputy Assistant Attorney General National Security Division, Department of Justice
    • Clyde Wallace, Deputy Assistant Director Cyber Division, Federal Bureau of Investigation
    • Steve Francis, Assistant Director, HSI Global Trade Investigations Division Director, National Intellectual Property Rights Center, U.S. Immigration and Customs Enforcement, Department of Homeland Security
    • Bryan S. Ware, Assistant Director for Cybersecurity Cyber Security and Infrastructure Security Agency, Department of Homeland Security
  • The Senate Judiciary Committee’s Antitrust, Competition Policy & Consumer Rights Subcommittee will hold a hearing on 30 September titled “Oversight of the Enforcement of the Antitrust Laws” with Federal Trade Commission Chair Joseph Simons and United States Department of Justice Antitrust Division Assistant Attorney General Makan Delhrahim.
  • The Federal Communications Commission (FCC) will hold an open meeting on 30 September and has made available its agenda with these items:
    • Facilitating Shared Use in the 3.1-3.55 GHz Band. The Commission will consider a Report and Order that would remove the existing non-federal allocations from the 3.3-3.55 GHz band as an important step toward making 100 megahertz of spectrum in the 3.45-3.55 GHz band available for commercial use, including 5G, throughout the contiguous United States. The Commission will also consider a Further Notice of Proposed Rulemaking that would propose to add a co-primary, non-federal fixed and mobile (except aeronautical mobile) allocation to the 3.45-3.55 GHz band as well as service, technical, and competitive bidding rules for flexible-use licenses in the band. (WT Docket No. 19-348)
    • Expanding Access to and Investment in the 4.9 GHz Band. The Commission will consider a Sixth Report and Order that would expand access to and investment in the 4.9 GHz (4940-4990 MHz) band by providing states the opportunity to lease this spectrum to commercial entities, electric utilities, and others for both public safety and non-public safety purposes. The Commission also will consider a Seventh Further Notice of Proposed Rulemaking that would propose a new set of licensing rules and seek comment on ways to further facilitate access to and investment in the band. (WP Docket No. 07-100)
    • Improving Transparency and Timeliness of Foreign Ownership Review Process. The Commission will consider a Report and Order that would improve the timeliness and transparency of the process by which it seeks the views of Executive Branch agencies on any national security, law enforcement, foreign policy, and trade policy concerns related to certain applications filed with the Commission. (IB Docket No. 16-155)
    • Promoting Caller ID Authentication to Combat Spoofed Robocalls. The Commission will consider a Report and Order that would continue its work to implement the TRACED Act and promote the deployment of caller ID authentication technology to combat spoofed robocalls. (WC Docket No. 17-97)
    • Combating 911 Fee Diversion. The Commission will consider a Notice of Inquiry that would seek comment on ways to dissuade states and territories from diverting fees collected for 911 to other purposes. (PS Docket Nos. 20-291, 09-14)
    • Modernizing Cable Service Change Notifications. The Commission will consider a Report and Order that would modernize requirements for notices cable operators must provide subscribers and local franchising authorities. (MB Docket Nos. 19-347, 17-105)
    • Eliminating Records Requirements for Cable Operator Interests in Video Programming. The Commission will consider a Report and Order that would eliminate the requirement that cable operators maintain records in their online public inspection files regarding the nature and extent of their attributable interests in video programming services. (MB Docket No. 20-35, 17-105)
    • Reforming IP Captioned Telephone Service Rates and Service Standards. The Commission will consider a Report and Order, Order on Reconsideration, and Further Notice of Proposed Rulemaking that would set compensation rates for Internet Protocol Captioned Telephone Service (IP CTS), deny reconsideration of previously set IP CTS compensation rates, and propose service quality and performance measurement standards for captioned telephone services. (CG Docket Nos. 13-24, 03-123)
    • Enforcement Item. The Commission will consider an enforcement action.

Other Developments

  • The United States House of Representatives took up and passed two technology bills on 14 September. One of the bills, “Internet of Things (IoT) Cybersecurity Improvement Act of 2020” (H.R. 1668), was discussed in yesterday’s Technology Policy Update as part of an outlook on Internet of Things (IoT) legislation (see here for analysis). The House passed a revised version by voice vote, but its fate in the Senate may lie with the Senate Homeland Security & Governmental Affairs Committee, whose chair, Senator Ron Johnson (R-WI), has blocked a number of technology bills during his tenure to the chagrin of some House stakeholders. The House also passed the “AI in Government Act of 2019” (H.R.2575) that would establish an AI Center of Excellence within the General Services Administration that would
    • “(1) advise and promote the efforts of the Federal Government in developing innovative uses of artificial intelligence by the Federal Government to the benefit of the public; and
    • (2) improve cohesion and competency in the use of artificial intelligence.”
    • Also, this bill would direct the Office of Management and Budget (OMB) to “issue a memorandum to the head of each agency that shall—
      • inform the development of artificial intelligence governance approaches by those agencies regarding technologies and applications that—
        • are empowered or enabled by the use of artificial intelligence within that agency; and
        • advance the innovative use of artificial intelligence for the benefit of the public while upholding civil liberties, privacy, and civil rights;
      • consider ways to reduce barriers to the use of artificial intelligence in order to promote innovative application of those technologies for the benefit of the public, while protecting civil liberties, privacy, and civil rights;
      • establish best practices for identifying, assessing, and mitigating any bias on the basis of any classification protected under Federal nondiscrimination laws or other negative unintended consequence stemming from the use of artificial intelligence systems; and
      • provide a template of the required contents of the agency Governance Plans
    • The House Energy and Commerce Committee marked up and reported out more than 30 bills last week including:
      • The “Consumer Product Safety Inspection Enhancement Act” (H.R. 8134) that “would amend the Consumer Product Safety Act to enhance the Consumer Product Safety Commission’s (CPSC) ability to identify unsafe consumer products entering the United States, especially e-commerce shipments entering under the de minimis value exemption. Specifically, the bill would require the CPSC to enhance the targeting, surveillance, and screening of consumer products. The bill also would require electronic filing of certificates of compliance for all consumer products entering the United States.
      • The bill directs the CPSC to: 1) examine a sampling of de minimis shipments and shipments coming from China; 2) detail plans and timelines to effectively address targeting and screening of de minimis shipments; 3) establish metrics by which to evaluate the effectiveness of the CPSC’s efforts in this regard; 4) assess projected technology, resources, and staffing necessary; and 5) submit a report to Congress regarding such efforts. The bill further directs the CPSC to hire at least 16 employees every year until staffing needs are met to help identify violative products at ports.
      • The “AI for Consumer Product Safety Act” (H.R. 8128) that “would direct the Consumer Product Safety Commission (CPSC) to establish a pilot program to explore the use of artificial intelligence for at least one of the following purposes: 1) tracking injury trends; 2) identifying consumer product hazards; 3) monitoring the retail marketplace for the sale of recalled consumer products; or 4) identifying unsafe imported consumer products.” The revised bill passed by the committee “changes the title of the bill to the “Consumer Safety Technology Act”, and adds the text based on the Blockchain Innovation Act (H.R. 8153) and the Digital Taxonomy Act (H.R. 2154)…[and] adds sections that direct the Department of Commerce (DOC), in consultation with the Federal Trade Commission (FTC), to conduct a study and submit to Congress a report on the state of blockchain technology in commerce, including its use to reduce fraud and increase security.” The revised bill “would also require the FTC to submit to Congress a report and recommendations on unfair or deceptive acts or practices relating to digital tokens.”
      • The “American Competitiveness Of a More Productive Emerging Tech Economy Act” or the “American COMPETE Act” (H.R. 8132) “directs the DOC and the FTC to study and report to Congress on the state of the artificial intelligence, quantum computing, blockchain, and the new and advanced materials industries in the U.S…[and] would also require the DOC to study and report to Congress on the state of the Internet of Things (IoT) and IoT manufacturing industries as well as the three-dimensional printing industry” involving “among other things:1) listing industry sectors that develop and use each technology and public-private partnerships focused on promoting the adoption and use of each such technology; 2) establishing a list of federal agencies asserting jurisdiction over such industry sectors; and 3) assessing risks and trends in the marketplace and supply chain of each technology.
      • The bill would direct the DOC to study and report on the effect of unmanned delivery services on U.S. businesses conducting interstate commerce. In addition to these report elements, the bill would require the DOC to examine safety risks and effects on traffic congestion and jobs of unmanned delivery services.
      • Finally, the bill would require the FTC to study and report to Congress on how artificial intelligence may be used to address online harms, including scams directed at senior citizens, disinformation or exploitative content, and content furthering illegal activity.
  • The National Institute of Standards and Technology (NIST) issued NIST Interagency or Internal Report 8272 “Impact Analysis Tool for Interdependent Cyber Supply Chain Risks” designed to help public and private sector entities better address complicated, complex supply chain risks. NIST stated “[t]his publication de-scribes how to use the Cyber Supply Chain Risk Management (C-SCRM) Interdependency Tool that has been developed to help federal agencies identify and assess the potential impact of cybersecurity events in their interconnected supply chains.” NIST explained
    • More organizations are becoming aware of the importance of identifying cybersecurity risks associated with extensive, complicated supply chains. Several solutions have been developed to help manage supply chains; most focus on contract management or compliance. There is a need to provide organizations with a systematic and more usable way to evaluate the potential impacts of cyber supply chain risks relative to an organization’s risk appetite. This is especially important for organizations with complex supply chains and highly interdependent products and suppliers.
    • This publication describes one potential way to visualize and measure these impacts: a Cyber Supply Chain Risk Management (C-SCRM) Interdependency Tool (hereafter “Tool”), which is designed to provide a basic measurement of the potential impact of a cyber supply chain event. The Tool is not intended to measure the risk of an event, where risk is defined as a function of threat, vulnerability, likelihood, and impact. Research conducted by the authors of this publication found that, at the time of publication, existing cybersecurity risk tools and research focused on threats, vulnerabilities, and likelihood, but impact was frequently overlooked. Thus, this Tool is intended to bridge that gap and enable users and tool developers to create a more complete understanding of an organization’s risk by measuring impact in their specific environments.
    • The Tool also provides the user greater visibility over the supply chain and the relative importance of particular projects, products, and suppliers (hereafter referred to as “nodes”) compared to others. This can be determined by examining the metrics that contribute to a node’s importance, such as the amount of access a node has to the acquiring organization’s IT network, physical facilities, and data. By understanding which nodes are the most important in their organization’s supply chain, the user can begin to understand the potential impact a disruption of that node may cause on business operations. The user can then prioritize the completion of risk mitigating actions to reduce the impact a disruption would cause to the organization’s supply chain and overall business.
  • In a blog post, Microsoft released its findings on the escalating threats to political campaigns and figures during the run up to the United States’ (U.S.) election. This warning also served as an advertisement for Microsoft’s security products. But, be that as it may, these findings echo what U.S. security services have been saying for months. Microsoft stated
    • In recent weeks, Microsoft has detected cyberattacks targeting people and organizations involved in the upcoming presidential election, including unsuccessful attacks on people associated with both the Trump and Biden campaigns, as detailed below. We have and will continue to defend our democracy against these attacks through notifications of such activity to impacted customers, security features in our products and services, and legal and technical disruptions. The activity we are announcing today makes clear that foreign activity groups have stepped up their efforts targeting the 2020 election as had been anticipated, and is consistent with what the U.S. government and others have reported. We also report here on attacks against other institutions and enterprises worldwide that reflect similar adversary activity.
    • We have observed that:
      • Strontium, operating from Russia, has attacked more than 200 organizations including political campaigns, advocacy groups, parties and political consultants
      • Zirconium, operating from China, has attacked high-profile individuals associated with the election, including people associated with the Joe Biden for President campaign and prominent leaders in the international affairs community
      • Phosphorus, operating from Iran, has continued to attack the personal accounts of people associated with the Donald J. Trump for President campaign
    • The majority of these attacks were detected and stopped by security tools built into our products. We have directly notified those who were targeted or compromised so they can take action to protect themselves. We are sharing more about the details of these attacks today, and where we’ve named impacted customers, we’re doing so with their support.
    • What we’ve seen is consistent with previous attack patterns that not only target candidates and campaign staffers but also those they consult on key issues. These activities highlight the need for people and organizations involved in the political process to take advantage of free and low-cost security tools to protect themselves as we get closer to election day. At Microsoft, for example, we offer AccountGuard threat monitoring, Microsoft 365 for Campaigns and Election Security Advisors to help secure campaigns and their volunteers. More broadly, these attacks underscore the continued importance of work underway at the United Nations to protect cyberspace and initiatives like the Paris Call for Trust and Security in Cyberspace.
  • The European Data Protection Supervisor (EDPS) has reiterated and expanded upon his calls for caution, prudence, and adherence to European Union (EU) law and principles in the use of artificial intelligence, especially as the EU looks to revamp its approach to AI and data protection. In a blog post, EDPS Wojciech Wiewiórowski stated:
    • The expectations of the increasing use of AI and the related economic advantages for those who control the technologies, as well as its appetite for data, have given rise to fierce competition about technological leadership. In this competition, the EU strives to be a frontrunner while staying true to its own values and ideals.
    • AI comes with its own risks and is not an innocuous, magical tool, which will heal the world harmlessly. For example, the rapid adoption of AI by public administrations in hospitals, utilities and transport services, financial supervisors, and other areas of public interest is considered in the EC White Paper ‘essential’, but we believe that prudency is needed. AI, like any other technology, is a mere tool, and should be designed to serve humankind. Benefits, costs and risks should be considered by anyone adopting a technology, especially by public administrations who process great amounts of personal data.
    • The increase in adoption of AI has not been (yet?) accompanied by a proper assessment of what the impact on individuals and on our society as a whole will likely be. Think especially of live facial recognition (remote biometric identification in the EC White Paper). We support the idea of a moratorium on automated recognition in public spaces of human features in the EU, of faces but also and importantly of gait, fingerprints, DNA, voice, keystrokes and other biometric or behavioural signals.
    • Let’s not rush AI, we have to get it straight so that it is fair and that it serves individuals and society at large.
    • The context in which the consultation for the Data Strategy was conducted gave a prominent place to the role of data in matters of public interest, including combating the virus. This is good and right as the GDPR was crafted so that the processing of personal data should serve humankind. There are existing conditions under which such “processing for the public good” could already take place, and without which the necessary trust of data subjects would not be possible.
    • However, there is a substantial persuasive power in the narratives nudging individuals to ‘volunteer’ their data to address highly moral goals. Concepts such as ‘Data altruism”, or ‘Data donation” and their added value are not entirely clear and there is a need to better define and lay down their scope, and possible purposes, for instance, in the context of scientific research in the health sector. The fundamental right to the protection of personal data cannot be ‘waived’ by the individual concerned, be it through a ‘donation’ or through a ‘sale’ of personal data. The data controller is fully bound by the personal data rules and principles, such as purpose limitation even when processing data that have been ‘donated’ i.e. when consent to the processing had been given by the individual.

Further Reading

  • Peter Thiel Met With The Racist Fringe As He Went All In On Trump” By Rosie Gray and Ryan Mac — BuzzFeed News. A fascinating article about one of the technology world’s more interesting figures. As part of his decision to ally himself with Donald Trump when running for president, Peter Thiel also met with avowed white supremacists. However, it appears that the alliance is no longer worthy of his financial assistance or his public support as he supposedly was disturbed about the Administration’s response to the pandemic. However, Palantir, his company has flourished during the Trump Administration and may be going public right before matters may change under a Biden Administration.
  • TikTok’s Proposed Deal Seeks to Mollify U.S. and China” By David McCabe, Ana Swanson and Erin Griffith — The New York Times. ByteDance is apparently trying to mollify both Washington and Beijing in bringing Oracle onboard as “trusted technology partner,” for the arrangement may be acceptable to both nations under their export control and national security regimes. Oracle handling and safeguarding TikTokj user data would seem to address the Trump Administration’s concerns, but not selling the company nor permitting Oracle to access its algorithm for making recommendations would seem to appease the People’s Republic of China (PRC). Moreover, United States (U.S.) investors would hold control over TikTok even though PRC investors would maintain their stakes. Such an arrangement may satisfy the Committee on Foreign Investment in the United States (CFIUS), which has ordered ByteDance to sell the app that is an integral part of TikTok. The wild card, as always, is where President Donald Trump ultimately comes out on the deal.
  • Oracle’s courting of Trump may help it land TikTok’s business and coveted user data” By Jay Greene and Ellen Nakashima — The Washington Post. This piece dives into why Oracle, at first blush, seems like an unlikely suitor to TikTok, but it’s eroding business position visa vis cloud companies like Amazon explains its desire to diversify. Also, Oracle’s role as a data broker makes all the user data available from TikTok very attractive.
  • Chinese firm harvests social media posts, data of prominent Americans and military” By Gerry Shih — The Washington Post. Another view on Shenzhen Zhenhua Data Technology, the entity from the People’s Republic of China (PRC) exposed for collecting the personal data of more than 2.4 million westerners, many of whom hold positions of power and influence. This article quotes a number of experts allowed to look at what was leaked of the data base who are of the view the PRC has very little in the way of actionable intelligence, at this point. The country is leveraging publicly available big data from a variety of sources and may ultimately makes something useful from these data.
  • “‘This is f—ing crazy’: Florida Latinos swamped by wild conspiracy theories” By Sabrina Rodriguez and Marc Caputo — Politico. A number of sources are spreading rumors about former Vice President Joe Biden and the Democrats generally in order to curb support among a key demographic the party will need to carry overwhelmingly to win Florida.

© 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 Alexander Sinn on Unsplash

Further Reading, Other Developments, and Coming Events (14 September)

Coming Events

  • The Senate Judiciary Committee’s Antitrust, Competition Policy & Consumer Rights Subcommittee will hold a hearing on 15 September titled “Stacking the Tech: Has Google Harmed Competition in Online Advertising?.” In their press release, Chair Mike Lee (R-UT) and Ranking Member Amy Klobuchar (D-MN) asserted:
    • Google is the dominant player in online advertising, a business that accounts for around 85% of its revenues and which allows it to monetize the data it collects through the products it offers for free. Recent consumer complaints and investigations by law enforcement have raised questions about whether Google has acquired or maintained its market power in online advertising in violation of the antitrust laws. News reports indicate this may also be the centerpiece of a forthcoming antitrust lawsuit from the U.S. Department of Justice. This hearing will examine these allegations and provide a forum to assess the most important antitrust investigation of the 21st century.
  • The United States’ Department of Homeland Security’s (DHS) Cybersecurity and Infrastructure Security Agency (CISA) announced that its third annual National Cybersecurity Summit “will be held virtually as a series of webinars every Wednesday for four weeks beginning September 16 and ending October 7:”
    • September 16: Key Cyber Insights
    • September 23: Leading the Digital Transformation
    • September 30: Diversity in Cybersecurity
    • October 7: Defending our Democracy
    • One can register for the event here.
  • The House Homeland Security Committee will hold a hearing titled “Worldwide Threats to the Homeland” on 17 September with the following witnesses:
    • Chad Wolf, Department of Homeland Security
    • Christopher Wray, Director, Federal Bureau of Investigation
    • Christopher Miller, Director, National Counterterrorism Center (NCTC)
  • On 17 September, the House Energy and Commerce Committee’s Communications & technology Subcommittee will hold a hearing titled “Trump FCC: Four Years of Lost Opportunities.”
  • The House Armed Services Committee’s Intelligence and Emerging Threats and Capabilities Subcommittee will hold a hearing’ titled “Interim Review of the National Security Commission on Artificial Intelligence Effort and Recommendations” with these witnesses:
    • Dr. Eric Schmidt , Chairman, National Security Commission on Artificial Intelligence 
    • HON Robert Work, Vice Chairman, National Security Commission on Artificial Intelligence, HON Mignon Clyburn, Commissioner, National Security Commission on Artificial Intelligence 
    • Dr. José-Marie Griffiths, Commissioner, National Security Commission on Artificial Intelligence
  • On 22 September, the Federal Trade Commission (FTC) will hold a public workshop “to examine the potential benefits and challenges to consumers and competition raised by data portability.” The agency has released its agenda and explained:
    • The workshop will also feature four panel discussions that will focus on: case studies on data portability rights in the European Union, India, and California; case studies on financial and health portability regimes; reconciling the benefits and risks of data portability; and the material challenges and solutions to realizing data portability’s potential.
  • The Senate Judiciary Committee’s Antitrust, Competition Policy & Consumer Rights Subcommittee will hold a hearing on 30 September titled “Oversight of the Enforcement of the Antitrust Laws” with Federal Trade Commission Chair Joseph Simons and United States Department of Justice Antitrust Division Assistant Attorney General Makan Delhrahim.
  • The Federal Communications Commission (FCC) will hold an open meeting on 30 September and has made available its agenda with these items:
    • Facilitating Shared Use in the 3.1-3.55 GHz Band. The Commission will consider a Report and Order that would remove the existing non-federal allocations from the 3.3-3.55 GHz band as an important step toward making 100 megahertz of spectrum in the 3.45-3.55 GHz band available for commercial use, including 5G, throughout the contiguous United States. The Commission will also consider a Further Notice of Proposed Rulemaking that would propose to add a co-primary, non-federal fixed and mobile (except aeronautical mobile) allocation to the 3.45-3.55 GHz band as well as service, technical, and competitive bidding rules for flexible-use licenses in the band. (WT Docket No. 19-348)
    • Expanding Access to and Investment in the 4.9 GHz Band. The Commission will consider a Sixth Report and Order that would expand access to and investment in the 4.9 GHz (4940-4990 MHz) band by providing states the opportunity to lease this spectrum to commercial entities, electric utilities, and others for both public safety and non-public safety purposes. The Commission also will consider a Seventh Further Notice of Proposed Rulemaking that would propose a new set of licensing rules and seek comment on ways to further facilitate access to and investment in the band. (WP Docket No. 07-100)
    • Improving Transparency and Timeliness of Foreign Ownership Review Process. The Commission will consider a Report and Order that would improve the timeliness and transparency of the process by which it seeks the views of Executive Branch agencies on any national security, law enforcement, foreign policy, and trade policy concerns related to certain applications filed with the Commission. (IB Docket No. 16-155)
    • Promoting Caller ID Authentication to Combat Spoofed Robocalls. The Commission will consider a Report and Order that would continue its work to implement the TRACED Act and promote the deployment of caller ID authentication technology to combat spoofed robocalls. (WC Docket No. 17-97)
    • Combating 911 Fee Diversion. The Commission will consider a Notice of Inquiry that would seek comment on ways to dissuade states and territories from diverting fees collected for 911 to other purposes. (PS Docket Nos. 20-291, 09-14)
    • Modernizing Cable Service Change Notifications. The Commission will consider a Report and Order that would modernize requirements for notices cable operators must provide subscribers and local franchising authorities. (MB Docket Nos. 19-347, 17-105)
    • Eliminating Records Requirements for Cable Operator Interests in Video Programming. The Commission will consider a Report and Order that would eliminate the requirement that cable operators maintain records in their online public inspection files regarding the nature and extent of their attributable interests in video programming services. (MB Docket No. 20-35, 17-105)
    • Reforming IP Captioned Telephone Service Rates and Service Standards. The Commission will consider a Report and Order, Order on Reconsideration, and Further Notice of Proposed Rulemaking that would set compensation rates for Internet Protocol Captioned Telephone Service (IP CTS), deny reconsideration of previously set IP CTS compensation rates, and propose service quality and performance measurement standards for captioned telephone services. (CG Docket Nos. 13-24, 03-123)
    • Enforcement Item. The Commission will consider an enforcement action.

Other Developments

  • After Ireland’s Data Protection Commission (DPC) directed Facebook to stop transferring the personal data of European Union citizens to the United States (U.S.), the company filed suit in Ireland’s court to stop enforcement of the order and succeeded in staying the matter until the court rules on the merits of the challenge. Earlier this summer, the Court of Justice for the European Union (CJEU) struck down the adequacy decision for the agreement between the European Union (EU) and United States (U.S.) that had provided the easiest means to transfer the personal data of EU citizens to the U.S. for processing under the General Data Protection Regulation (GDPR) (i.e. the EU-U.S. Privacy Shield). In the case known as Schrems II, the CJEU also cast doubt on whether standard contractual clauses (SCC) used to transfer personal data o the U.S. would pass muster given the grounds for finding the Privacy Shield inadequate: the U.S.’s surveillance regime and lack of meaningful redress for EU citizens. Consequently, it has appeared as if data protection authorities throughout the EU would need to revisit SCCs for transfers to the U.S., and it appears the DPC was looking to stop Facebook from using its SCC. Facebook is apparently arguing in its suit that it will suffer “extremely significant adverse effects” if the DPC’s decision is implemented.
  • In a related development, the European Data Protection Board (EDPB) has established “a taskforce to look into complaints filed in the aftermath of the CJEU Schrems II judgement.” The EDPB noted the 101 identical complaints “lodged with EEA Data Protection Authorities against several controllers in the European Economic Area (EEA) member states regarding their use of Google/Facebook services which involve the transfer of personal data.” The Board added “[s]pecifically the complainants, represented by the NGO NOYB, claim that Google/Facebook transfer personal data to the U.S. relying on the EU-U.S. Privacy Shield or Standard Contractual Clauses and that according to the recent CJEU judgment in case C-311/18 the controller is unable to ensure an adequate protection of the complainants’ personal data.” The EDPB claimed “[t]he taskforce will analyse the matter and ensure a close cooperation among the members of the Board…[and] [t]his taskforce will prepare recommendations to assist controllers and processors with their duty to identify and implement appropriate supplementary measures to ensure adequate protection when transferring data to third countries.” EDPB Chair Andrea Jelinek cautioned “the implications of the judgment are wide-ranging, and the contexts of data transfers to third countries very diverse…[and] [t]herefore, there cannot be a one-size-fits-all, quick fix solution.” She added “[e]ach organisation will need to evaluate its own data processing operations and transfers and take appropriate measures.”
  • An Australian court ruled against Facebook in its efforts to dismiss a suit brought against the company for its role in retaining and providing personal data to Cambridge Analytica. A Federal Court of Australia dismissed Facebook’s filings to reverse a previous ruling that allowed the Office of the Australian Information Commissioner (OAIC) to sue Facebook’s United States and Irish entities.
    • In March, the OAIC filed suit in federal court in Australia, alleging the two companies transgressed the privacy rights of 311,127 Australians under Australia’s Privacy Act. The two companies could face liability as high as $1.7 million ASD per violation.
    • In its November 2018 report to Parliament titled “Investigation into the use of data analytics in political campaigns”, the ICO explained
      • One key strand of our investigation involved allegations that an app, ultimately referred to as ‘thisisyourdigitallife’, was developed by Dr Aleksandr Kogan and his company Global Science Research (GSR) in order to harvest the data of up to 87 million global Facebook users, including one million in the UK. Some of this data was then used by Cambridge Analytica, to target voters during the 2016 US Presidential campaign process.
    • In its July 2018 report titled “Democracy disrupted? Personal information and political influence,” the ICO explained
      • The online targeted advertising model used by Facebook is very complex, and we believe a high level of transparency in relation to political advertising is vital. This is a classic big-data scenario: understanding what data is going into the system; how users’ actions on Facebook are determining what interest groups they are placed in; and then the rules that are fed into any dynamic algorithms that enable organisations to target individuals with specific adverts and messaging.
      • Our investigation found significant fair-processing concerns both in terms of the information available to users about the sources of the data that are being used to determine what adverts they see and the nature of the profiling taking place. There were further concerns about the availability and transparency of the controls offered to users over what ads and messages they receive. The controls were difficult to find and were not intuitive to the user if they wanted to control the political advertising they received. Whilst users were informed that their data would be used for commercial advertising, it was not clear that political advertising would take place on the platform.
      • The ICO also found that despite a significant amount of privacy information and controls being made available, overall they did not effectively inform the users about the likely uses of their personal information. In particular, more explicit information should have been made available at the first layer of the privacy policy. The user tools available to block or remove ads were also complex and not clearly available to users from the core pages they would be accessing. The controls were also limited in relation to political advertising.
  • The Australian Competition & Consumer Commission (ACCC) announced it “will be examining the experiences of Australian consumers, developers, suppliers and others in a new report scrutinising mobile app stores” according to the agency’s press release. The ACCC’s inquiry comes at the same time regulators in the United States and the European Union are investigating the companies for their app store practices, which could lead to enforcement actions. The ACCC is also looking to institute a code that would require Google and Facebook to pay Australian media outlets for content used on their platforms. The ACCC stated that “[i]ssues to be examined include the use and sharing of data by apps, the extent of competition between Google and Apple’s app stores, and whether more pricing transparency is needed in Australia’s mobile apps market.” The ACCC added:
    • Consumers are invited to share their experiences with buying and using apps through a short survey. The ACCC has also released an issues paper seeking views and feedback from app developers and suppliers.
    • In the issues paper, the ACCC explained “[p]otential outcomes” could be:
      • findings regarding structural, competitive or behavioural issues affecting the supply of apps
      • increased information about competition, pricing and other practices in the supply of apps and on app marketplaces
      • ACCC action to address any conduct that raises concerns under the Competition and Consumer Act 2010, and
      • recommendations to the Government for legislative reform to address systemic issues.
  • The Government Accountability Office (GAO) found an agency has implemented spotty, incomplete privacy measures in using facial recognition technology (FRT) at ports of entry.
    • The House Homeland Security and Senate Homeland Security and Governmental Affairs asked the GAO
      • to review United States (U.S.) Customs and Border Protection (CBP) and Transportation Security Administration’s (TSA) facial recognition technology capabilities for traveler identity verification. This report addresses (1) the status of CBP’s testing and deployment of facial recognition technology at ports of entry, (2) the extent to which CBP’s use of facial recognition technology has incorporated privacy principles consistent with applicable laws and policies, (3) the extent to which CBP has assessed the accuracy and performance of its facial recognition capabilities at ports of entry, and (4) the status of TSA’s testing of facial recognition capabilities and the extent to which TSA’s facial recognition pilot tests incorporated privacy principles.
    • The GAO noted:
      • Most recently, in 2017, we reported that CBP had made progress in testing biometric exit capabilities, including facial recognition technology, but challenges continued to affect CBP’s efforts to develop and implement a biometric exit system, such as differences in the logistics and infrastructure among ports of entry. As we previously reported, CBP had tested various biometric technologies in different locations to determine which type of technology could be deployed on a large scale without disrupting legitimate travel and trade, while still meeting its mandate to implement a biometric entry-exit system. Based on the results of its testing, CBP concluded that facial recognition technology was the most operationally feasible and traveler-friendly option for a comprehensive biometric solution. Since then, CBP has prioritized testing and deploying facial recognition technology at airports (referred to as air exit), with seaports and land ports of entry to follow. These tests and deployments are part of CBP’s Biometric Entry-Exit Program.
      • As part of TSA’s mission to protect the nation’s transportation systems and to ensure freedom of movement for people and commerce, TSA has been exploring facial recognition technology for identity verification at airport checkpoints. Since 2017, TSA has conducted a series of pilot tests—some in partnership with CBP—to assess the feasibility of using facial recognition technology to automate traveler identity verification at airport security checkpoints. In April 2018, TSA signed a policy memorandum with CBP on the development and implementation of facial recognition capabilities at airports.
    • The GAO made recommendations to CBP:
      • The Commissioner of CBP should ensure that the Biometric Entry-Exit Program’s privacy notices contain complete and current information, including all of the locations where facial recognition is used and how travelers can request to opt out as appropriate. (Recommendation 1)
      • The Commissioner of CBP should ensure that the Biometric Entry-Exit Program’s privacy signage is consistently available at all locations where CBP is using facial recognition. (Recommendation 2)
      • The Commissioner of CBP should direct the Biometric Entry-Exit Program to develop and implement a plan to conduct privacy audits of its commercial partners’, contractors’, and vendors’ use of personally identifiable information. (Recommendation 3)
      • The Commissioner of CBP should develop and implement a plan to ensure that the biometric air exit capability meets its established photo capture requirement. (Recommendation 4)
      • The Commissioner of CBP should develop a process by which Biometric Entry-Exit program officials are alerted when the performance of air exit facial recognition falls below established thresholds. (Recommendation 5)
  • The United States (U.S.) Agency for Global Media (USAGM) is being sued by an entity it funds and oversees because
    • Previously, the United States Court of Appeals for the District of Columbia enjoined USAGM from “taking any action to remove or replace any officers or directors of the OTF,” pending the outcome of the suit which is being expedited.
    • Additionally, USAGM CEO and Chair of the Board Michael Pack is being accused in two different letters of seeking to compromise the integrity and independence of two organizations he oversees. There have been media accounts of the Trump Administration’s remaking of USAGM in ways critics contend are threatening the mission and effectiveness of the Open Technology Fund (OTF), a U.S. government non-profit designed to help dissidents and endangered populations throughout the world. The head of the OTF has been removed, evoking the ire of Members of Congress, and other changes have been implemented that are counter to the organization’s mission. Likewise, there are allegations that politically-motivated policy changes seek to remake the Voice of America (VOA) into a less independent entity.
      • In a letter to Pack, OTF argued that a number of recent actions Pack has undertaken have violated “firewall protections” in the organization’s grant agreement. They further argue that Pack is conflicted and should turn over the investigation to the United States (U.S.) Department of State’s Office of the Inspector General (OIG). OTF alleged the following:
        • 1. Attempts to compromise and undermine OTF’s independence: USAGM has repeatedly attempted to undermine OTF’s independence over the past several months.
        • 2. Attempts to compromise and undermine integrity: USAGM has also attempted to undermine the integrity of OTF by publicly making numerous false and misleading claims about OTF to the internet freedom community, the general public, and even to Congress.
        • 3. Attempts to compromise and undermine security: USAGM has attempted to undermine the security of OTF, our staff, and our project partners -many of whom operate in highly sensitive environments -by
          • 1) attempting to gain unauthorized and unsupervised access to our office space and
          • 2) by requesting vast amounts of sensitive information and documentation with no apparent grant-related purpose, and no regard for the security of that information and documentation
        • 4. Attempts to compromise and undermine privacy: Closely related to USAGM’s attempts to undermine OTF’s security, USAGM has also attempted to undermine the privacy of OTF’s staff and partners by requesting that OTF provide Personally Identifiable Information(PII) without a clearly articulated grant-related purpose, and with no guarantee that the PII will be handled in a secure manner.
        • 5. Attempts to compromise and undermine effectiveness: USAGM’s actions have undermined the effectiveness of OTF by:
          • 1) freezing and subsequently withholding $19,181,791 in congressionally appropriated funding from OTF, forcing OTF to issue stop-work orders to 49 of our 60 internet freedom projects;
          • 2) providing unjustified, duplicative, overbroad, and unduly burdensome requests for information and documentation, without any clear grant-related purpose, and with clearly unreasonable deadlines;
          • 3) attempting to divert and redirect funding obligated by USAGM to OTF in an effort to duplicate OTF’s work; and
          • 4) threatening to terminate OTF’s Grant Agreement.
    • OTF asserted
      • These actions individually serve to seriously undermine OTF’s organizational and programmatic effectiveness. In their combined aggregate they threaten to dismantle OTF’s basic ability to effectively carry out its congressionally mandated mission to the detriment of USAGM and the cause of internet freedom globally
    • A group of VOA journalists wrote the entity’s acting director, asserting that Pack’s actions risk crippling programs and projects for some countries that are considered national security priorities.” They added:
      • He has ordered the firing of contract journalists, with no valid reason, by cancelling their visas, forcing them back to home countries where the lives of some of them may be in jeopardy. Now the purge appears to be expanding to include U.S. permanent residents and even U.S. citizens, with Mr. Pack recklessly expressing that being a journalist is “a great cover for a spy.
  • The Cyberspace Solarium Commission (CSC) issued its latest white paper to address a continuing problem for the United States’ government: how to attract or train a sufficient cyber workforce when private sector salaries are generally better. In “Growing A Stronger Federal Cyber Workforce,” the CSC claimed “Currently more than one in three public-sector cyber jobs sits open…[and] [f]illing these roles has been a persistent and intractable problem over the past decade, in large part due to a lack of coordination and leadership.” The CSC averred “[i]n the context of this pervasive challenge, the fundamental purpose of this paper is to outline the elements required for a coherent strategy that enables substantive and coordinated investment in cyber workforce development and calls for a sustained investment in that strategy.” The CSC then proceeds to lay out “five elements to guide development of a federal cyber workforce strategy:
    • Organize: Federal departments and agencies must have flexible tools for organizing and managing their workforce that can adapt to each organization’s individual mission while also providing coherence across the entirety of the federal government. To appropriately organize the federal cyber workforce, the CSC recommends properly identifying and utilizing cyber-specific occupational classifications to allow more tailored workforce policies, building a federal cyber service to provide clear and agile hiring authorities and other personnel management tools, and establishing coordination structures to provide clear leadership for federal workforce development e orts.
    • Recruit: Federal leaders must focus on the programs that make public service an attractive prospect to talented individuals. In many ways, the federal government’s greatest tool for recruitment is the mission and unique learning opportunities inherent in federal work. To capitalize on these advantages, the government should invest in existing programs such as CyberCorps: Scholarship for Service and the Centers of Academic Excellence, while also working to mitigate recruitment barriers that stem from the personnel security clearance process.
    • Develop: e federal government, like all cyber employers, cannot expect every new employee to have hands-on experience, a four-year degree, and a list of industry certifications. Rather, the federal government will be stronger if it draws from a broad array of educational backgrounds and creates opportunities for employees to gain knowledge and experience as they work. is e ort will call for many innovative approaches, among which the Commission particularly recommends apprenticeship programs and upskilling opportunities to support cyber employee development.
    • Retain: Federal leaders should take a nuanced view of retention, recognizing that enabling talent to move flexibly between the public and private sectors enables a stronger cyber workforce overall. However, federal employers can take steps to encourage their employees to increase the time they spend in public service. Improving pay flexibility is a major consideration, but continuing the development of career pathways and providing interesting career development opportunities like rotational and exchange programs also can be critical. Of particular note, federal employers can increase retention of underrepresented groups through the removal of inequities and barriers to advancement in the workplace.
    • Stimulate growth: e federal government cannot simply recruit a larger share of the existing national talent pool. Rather, leaders must take steps to grow the talent pool itself in order to increase the numbers of those available for federal jobs. To promote growth of the talent pool nationwide, the federal government must first coordinate government efforts working toward this goal. Executive branch and congressional leaders should also invest in measures to promote diversity across the national workforce and incentivize research to provide a greater empirical understanding of cyber workforce dynamics. Finally, federal leaders must work to increase the military cyber workforce, which has a significant impact on the national cyber workforce because it serves as both a source and an employer of cyber talent.

Further Reading

  • Oracle reportedly wins deal for TikTok’s US operations as ‘trusted tech partner’” By Tom Warren and Nick Statt – The Verge. ByteDance chose Oracle over Microsoft but not for buying its operations in the United States (U.S.), Australia, Canada, and New Zealand. Now, Oracle is proposing to be TikTok’s trusted technology partner, which seems to be hosting TikTok’s operations in the U.S. and managing its data as a means of allaying the concerns of the U.S. government about access by the People’s Republic of China (PRC).
  • Why Do Voting Machines Break on Election Day?” By Adrianne Jeffries – The Markup. This piece seeks to debunk the hype by explaining that most voting issues are minor and easily fixed, which may well be a welcome message in the United States (U.S.) given the lies and fretting about the security and accuracy of the coming election. Nonetheless, the mechanical and systemic problems encountered by some Americans do speak to the need to update voting laws and standards. Among other problems are the high barriers to entry for firms making and selling voting machines.
  • Twitter steps up its fight against election misinformation” By Elizabeth Dwoskin – The Washington Post. Twitter and Google announced policy changes like Facebook did last week to help tamp down untrue claims and lies about voting and elections in the United States. Twitter will take a number of different approaches to handling lies and untrue assertions. If past is prologue, President Donald Trump may soon look to test the limits of this policy as he did shortly after Facebook announced its policy changes. Google will adjust searches on election day to place respected, fact oriented organizations at the top of search results.
  • China’s ‘hybrid war’: Beijing’s mass surveillance of Australia and the world for secrets and scandal” By Andrew Probyn and Matthew Doran – ABC News; “Zhenhua Data leak: personal details of millions around world gathered by China tech company” By Daniel Hurst in Canberra, Lily Kuo in Beijing and Charlotte Graham-McLay in Wellington – The Guardian. A massive database leaked to to an American shows the breadth and range of information collected by a company in the People’s Republic of China (PRC) alleged to be working with the country’s military and security services. Zhenhua Data is denying any wrongdoing or anything untoward, but the database contains information on 2.4 million people, most of whom live in western nations in positions of influence and power such as British and Australian prime Ministers Boris Johnson and Scott Morrison. Academics claim this sort of compilation of information from public and private sources is unprecedented and would allow the PRC to run a range of influence operations.
  • Europe Feels Squeeze as Tech Competition Heats Up Between U.S. and China” By Steven Erlanger and Adam Satariano – The New York Times. Structural challenges in the European Union (EU) and a lack of large technology companies have left the EU is a delicate position. It seeks to be the world’s de facto regulator but is having trouble keeping with the United States and the People’s Republic of China, the two dominant nations in technology.

© 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 PixelAnarchy from Pixabay

Further Reading, Other Developments, and Coming Events (31 August)

Today’s Further Reading, Other Developments, and Coming Events.

Coming Events

  • On 10 September, the General Services Administration (GSA) will have a webinar to discuss implementation of Section 889 of the “John S. McCain National Defense Authorization Act (NDAA) for FY 2019” (P.L. 115-232) that bars the federal government and its contractors from buying the equipment and services from Huawei, ZTE, and other companies from the People’s Republic of China.
  • The Federal Communications Commission (FCC) will hold a forum on 5G Open Radio Access Networks on 14 September. The FCC asserted
    • Chairman [Ajit] Pai will host experts at the forefront of the development and deployment of open, interoperable, standards-based, virtualized radio access networks to discuss this innovative new approach to 5G network architecture. Open Radio Access Networks offer an alternative to traditional cellular network architecture and could enable a diversity in suppliers, better network security, and lower costs.
  • The Senate Judiciary Committee’s Antitrust, Competition Policy & Consumer Rights Subcommittee will hold a hearing on 15 September titled “Stacking the Tech: Has Google Harmed Competition in Online Advertising?.” In their press release, Chair Mike Lee (R-UT) and Ranking Member Amy Klobuchar (D-MN) asserted:
    • Google is the dominant player in online advertising, a business that accounts for around 85% of its revenues and which allows it to monetize the data it collects through the products it offers for free. Recent consumer complaints and investigations by law enforcement have raised questions about whether Google has acquired or maintained its market power in online advertising in violation of the antitrust laws. News reports indicate this may also be the centerpiece of a forthcoming antitrust lawsuit from the U.S. Department of Justice. This hearing will examine these allegations and provide a forum to assess the most important antitrust investigation of the 21st century.
  • The United States’ Department of Homeland Security’s (DHS) Cybersecurity and Infrastructure Security Agency (CISA) announced that its third annual National Cybersecurity Summit “will be held virtually as a series of webinars every Wednesday for four weeks beginning September 16 and ending October 7:”
    • September 16: Key Cyber Insights
    • September 23: Leading the Digital Transformation
    • September 30: Diversity in Cybersecurity
    • October 7: Defending our Democracy
    • One can register for the event here.
  • On 22 September, the Federal Trade Commission (FTC) will hold a public workshop “to examine the potential benefits and challenges to consumers and competition raised by data portability.”
  • The Senate Judiciary Committee’s Antitrust, Competition Policy & Consumer Rights Subcommittee will hold a hearing on 30 September titled ““Oversight of the Enforcement of the Antitrust Laws” with Federal Trade Commission Chair Joseph Simons and United States Department of Justice Antitrust Division Assistant Attorney General Makan Delhrahim.
  • The Federal Communications Commission (FCC) will hold an open meeting on 30 September, but an agenda is not available at this time.

Other Developments

  • A group of Democratic Senators wrote the Federal Communications Commission (FCC) “to express our profound frustration that the [agency] has failed to take forceful action to keep households connected during the COVID-19 pandemic.” They asserted that “[a]s millions of American families face unprecedented financial pressures and educational challenges, we urge the FCC to reverse proposed changes to the Lifeline program, take immediate steps to open its assistance to more households, and ensure that its services meet the pressing needs of families during this crisis.”
    • They claimed
      • Since the first weeks of [FCC Chair Ajit Pai’s tenure], the FCC has sought to block new broadband providers’ participation in the Lifeline program, curtail benefits in tribal areas, exclude existing carriers, rollback reforms for registering new carriers, make it harder for new applicants  to subscribe, prevent carriers from offering free in-person distribution of phones, reduce incentives to enroll subscribers, and add more barriers for participating carriers and subscriber. These proposals have been so extreme that they would lead to cutting off carriers serving almost 70% of Lifeline subscribers.
    • They urged Pai “to immediately take the following steps:
      • 1.) Take emergency measures to provide additional financial support to Lifeline providers during the pandemic to temporarily support unlimited mobile data and voice minutes, and notify Congress if additional funding is needed for such changes.
      • 2.) Extend all current FCC waivers on Lifeline usage and subscriber documentation requirements for at least a full year, until August 2021or when we have recovered from the pandemic.
      • 3.) Close the currently outstanding Lifeline proposed rulemakings that would create new obstacles for eligible households and add unwarranted burden on carriers.
      • 4.)Pause the scheduled changes to Lifeline program’s minimum service standards until the Commission studies such impacts on the market in its upcoming 2021 State of Lifeline Marketplace Report, to avoid disruptions to customers’ services.
      • 5.) Restore the monthly subsidy to $9.25 for plans offering voice services for subscribers who value voice over data-heavy plans and pause the planned decrease in contributions for voice support.
      • 6.) Work with states to increase the automated verification of state databases with the National Verifier program by the end of this year.
  • New Zealand’s National Cyber Security Centre (NCSC) released a “General Security Advisory: ongoing campaign of Denial of Service (DoS) attacks affecting New Zealand entities” after four days of DoS attacks against New Zealand’s stock market coming from somewhere offshore. The NCSC recommended best practices the Australian Cyber Security Centre (ACSC) had published. The NCSC stated
    • [It] is aware of an ongoing campaign of DoS attacks affecting New Zealand entities.
    • The campaign has included the targeting of a number of global entities, predominantly in the financial sector. 
    • The NCSC strongly encourages all organisations in this sector to consider the risk to their organisation of DoS and ensure appropriate mitigations are in place.
  • Senator Mark Warner (D-VA) letters to DellAppleHPSamsungGoogleMicrosoftAcer America, and ASUS USA asking the “companies to do what they can to help bridge the “homework gap” – the lack of reliable computer or internet access that prevents school-aged children from being able to do school work from home.” Warner’s letter is in response to the nationwide shortage of lost laptops and tablets facing families as many children will be starting school online this fall. Warner stated:
    • There are a range of actions your company can take, including educational product discounts, the provision of complimentary or donated computers (including for home lending programs many educational institutions operate), and the provision of refurbished or returned products in good working condition for school districts and higher education institutions to distribute to educators and students. While I understand the strains placed on the global supply chain, your prioritization of these matters would greatly assist struggling families at this challenging time.
  • The United States Department of Defense (DOD) updated its list of ““Communist Chinese military companies” operating directly or indirectly in the United States in accordance with the statutory requirement of Section 1237 of the National Defense Authorization Act for Fiscal Year 1999, as amended.” The eleven companies from the People’s Republic of China (PRC) were added to the existing list sent “to Congress in June 2020,” some 20 years after Congress tasked the DOD with this responsibility. This action is most likely in response to a letter sent last year to fulfill this responsibility. Notably, any company on the list could be sanctioned by the President under the same authorities recently used against TikTok and WeChat.
    • In a September 2019 letter to Secretary of Defense Mark Esper, Senate Minority Leader Chuck Schumer (D-NY) and Senator Tom Cotton (R-AR) were joined by Representatives Ruben Gallego (D-AZ) and Mike Gallagher (R-WI) in asking whether the DOD has been updating 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” as directed by Section 1237 of the FY 1999 NDAA. They noted that China’s Communist Party has adopted a Military-Civilian Fusion strategy “to achieve its national objectives,” including the acquisition of U.S. technology through any means such as espionage, forced technology transfers, and the purchase of or investment in U.S. technology forms. Schumer, Cotton, Gallego, and Gallagher urged the Trump Administration “reexamine all statutory authorities at its disposal to confront the CCP’s strategy of Military-Civilian Fusion, including powers that have laid dormant for years.”
    • Unstated in this letter, however, is that the first part of Section 1237 grants the President authority to “exercise International Emergency Economic Powers Act (IEEPA) authorities (other than authorities relating to importation) without regard to section 202 of the IEEPA (50 U.S.C. 1701) in the case of any commercial activity in the United States by a person that is on the list.” Of IEEPA grants the President sweeping powers to prohibit transactions and block property and property interests for nations and other groups subject to an IEEPA national emergency declaration. Consequently, those companies identified by the DOD on a list per Section 1237 could be blocked and prohibited from doing business with U.S. entities and others and those that do business with such Chinese companies could be subject to enforcement actions by the U.S. government (e.g. the U.S.’s actions against ZTE for doing business with Iran in violation of an IEEPA national emergency).
    • The statute defines a “Communist Chinese military company” as “any person identified in the Defense Intelligence Agency publication numbered VP-1920-271-90, dated September 1990, or PC-1921-57-95, dated October 1995, and any update of those publications for the purposes of this section; and any other person that is owned or controlled by the People’s Liberation Army; and is engaged in providing commercial services, manufacturing, producing, or exporting.” Considering that the terms “owned” and “controlled” are not spelled out in this section, the executive branch may have very wide latitude in deeming a non-Chinese company as owned or controlled and therefore subject to the President’s use of IEEPA powers. Moreover, since the President already has the authority to declare an emergency and then use IEEPA powers, this language would seem to allow the President to bypass any such declaration and immediately use such powers, except those regarding importation, against any Chinese entities identified on this list by the Pentagon.
  • District of Columbia Attorney General Karl Racine (D) filed suit against Instacart alleging the company “violated the District’s Consumer Protection Procedures Act and tax law by: 
    • Charging District consumers millions of dollars in deceptive service fees: Prior to 2016, Instacart’s checkout screen contained an option to tip workers, set as a default 10 percent of the consumer’s subtotal for groceries that users could adjust. In 2016, Instacart swapped the tip option for a service fee, which was also set to a default 10 percent and could be adjusted, and displayed it where the tip option used to be. Consumers paid the service fee believing they were tipping workers. In reality, the service fee was a second charge—on top of a delivery fee—imposed by Instacart to cover delivery costs and operating expenses. Additionally, Instacart failed to clearly disclose that service fees were optional and that consumers could choose not to pay them.
    • Misleading consumers about how service fees contributed to worker pay: When Instacart announced the new service fees, it told consumers that “100% of the variable service amount is used to pay all shoppers more consistently for each and every delivery, not just the last shopper to touch the order.” Instacart also stated that the company collected a service fee because “multiple shoppers may have been involved in a single order” and the “service fee is used to pay this entire set of shoppers.” In fact, the shoppers who fulfilled a consumer’s order were paid the same whether or not a consumer paid the service fee.
    • Failing to pay at hundreds of thousands of dollars in District sales tax: Under District law, Instacart is responsible for collecting sales tax on the delivery services it provides. The entire time Instacart has operated in the District, it has failed to collect sales tax on the service fees and delivery fees it charged users.
  • Two large United States (U.S.) technology companies are facing class actions in the Netherlands and the United Kingdom (UK) that argue the companies’ use of third party cookies in order to sell real time bidding advertising violated the European Union’s General Data Protection Regulation (GDPR) by not obtaining the consent of people before their personal information is collected and processed. The suit against Oracle and Salesforce is being brought by The Privacy Collective, a European non-profit, that could result in damages of more than €10 billion.
  • As part of its lawsuit against Google “for deceptive and unfair practices used to obtain users’ location data, which Google then exploits for its lucrative advertising business,” the Office of the Attorney General of Arizona released emails obtained during the course of discovery that may demonstrate the company’s knowledge that its interface and operating system were trying to frustrate a user’s desire to truly turn off location data.
  • The eHealth Initiative & Foundation (eHI) and the Center for Democracy and Technology (CDT) released A Draft Consumer Privacy Framework for Health Data, “a collaborative effort addressing gaps in legal protections for consumer health data outside of the Health Insurance Portability and Accountability Act’s (HIPAA) coverage.” Feedback is welcome until 25 September.
    • The organizations asserted
      • The standards’ emphasis is on transparency, accountability, and the limitation on health data collection, disclosure, and use. Importantly, the standards:
        • (1) move beyond outdated notice and consent models,
        • (2) cover all health information, and
        • (3) cover all entities that use, disclose or collect consumer health information, regardless of the size or business model of the covered entity.
      • This proposal is not designed to be a replacement for necessary comprehensive data privacy legislation. Given that Congressional action to pass such a law is likely some time away, this effort is designed to build consensus on best practices and to do what we can now, in the interim, to shore up protections for non-HIPAA covered health data.

Further Reading

  • Big Oil Faded. Will Big Tech?” By Shira Ovide – The New York Times. This piece suggests that the so-called Big Tech companies may someday wane as many energy companies like Exxon are currently doing. The interesting point is made that a company or field’s preeminence can rapidly disappear and it can seem dominant until it is not. And this frequently happens for reasons that do not seem apparent or related. Ironically, Exxon essentially got pushed out of the Dow Jones Industrial Average because Apple had to split its stock because of its surging valuation. Another tech company, Salesforce, will replace Exxon.
  • Apple wants to stop advertisers from following you around the web. Facebook has other ideas.” By Peter Kafka – Recode. Apple will extend a feature from Safari to its next iOS for iPhones where users will soon be asked whether they want to allow apps to track them across the web and other apps in order to deliver them targeted, personalized advertising. To no great surprise, it is being assumed many users will say no, diminishing a prime mode by which companies reap data and show people advertisements that are intimately tied to what they read and watch online. Consequently, advertisers will be less willing to spend dollars on more general ads and income will be depressed for the two major players in this market: Facebook and Google. Facebook has already declared it will not use Apple’s device identifier unique to every iPhone or Apple Watch, meaning users downloading the Facebook app will not get the choice of whether to say no to the companies tracking them. It is not clear how well this workaround will mitigate the projected loss in ad revenue for Facebook, but it does represent the latest chapter in the fight between the two companies. Facebook has lined up with Epic Games, maker of Fortnite, in its suit against Apple regarding App Store policies. It is very likely Apple sees this change to iOS 14 as a means of burnishing its reputation as being more concerned about its users privacy than competitors in Silicon Valley, which it can afford to be considering it does not earn most of its revenue the same way Facebook does, and curry favor in Washington and Brussels where it is facing antitrust scrutiny.
  • Want a Free Amazon Halo Wearable? Just Hand Over Your Data to This Major Insurance Company” By Emily Mullin – OneZero. Amazon has teamed with insurer John Hancock to offer a wearable health and fitness tracker that will be used to collect personal data on wearers that is designed to nudge them into better behaviors and better health. This is not the first such pairing, and it raises a host of policy issues, for healthier people would be poised to reap benefits not available to less healthy people. Some insurers are offering modest amounts of cash or gift cards for exercising regularly or other benefits that would not go to less healthy people. These sorts of programs are similar to employee health and wellness programs that were enshrined in the “Patient Protection and Affordable Care Act” that studies have suggested do not work very well. Additionally, companies like Amazon and John Hancock will be collecting and processing all sorts of very sensitive personal information, making them likely targets of hacking operations. Also, there are privacy implications, for these wearable devices will likely allow companies to know the most intimate details of wearers’ lives.
  • TikTok Deal Is Complicated by New Rules From China Over Tech Exports” By Paul Mozur, Raymond Zhong and David McCabe – The New York Times; “TikTok Is Said to Wrestle With Two Competing Offers” By Mike Isaac – The New York Times; “China’s new tech export restrictions further cloud US TikTok sale and raise the risk of protectionism” By Coco Feng, Tracy Qu and Amanda Lee– South China Morning Post; “China puts drones and laser tech on restricted export list after US tightens rules” By Sidney Leng – South China Morning Post; “TikTok Chief Executive Kevin Mayer Resigns” By Mike Isaac – The New York Times.In a surprise announcement from two agencies late last week, the People’s Republic of China changed its export control rules for the first time since 2008 to likely have leverage over TikTok’s sale to a United States (U.S.) entity. Ostensibly, the changes are “to regulate technology exports, promote scientific and technological progress and economic and technological cooperation, and maintain national economic security,” but the inclusion of “personalised information recommendation service technology based on data analysis” and “artificial intelligence interactive interfaces” likely point to ByteDance’s app, TikTok. In fact a researcher with the PRC Ministry of Commerce was quoted as asserting “[t]he time to publish the new update of the export control list has been expedited due to the TikTok sale.” Moreover, the PRC’s timeline for deciding on whether an export license is needed is the same as the Trump Administration’s second executive order directing ByteDance to divest TikTok. Incidentally, these changes are probably in response to tighten of U.S. export controls against the PRC, which could set off retaliatory moves. In any event, Beijing will now have to approve any sale of TikTok operations in the U.S. Also, Walmart has apparently joined forces with Microsoft in preparing a bid on TikTok in competition with Oracle which threw its proverbal hat into the ring last week. And, new TikTok CEO Kevin Mayer stepped down in a surprise move citing ByteDance’s changed circumstances.
  • Trump aides interviewing replacement for embattled FTC chair” By Leah Nylen, Betsy Woodruff Swan, John Hendel and Daniel Lippman – Politico. The Trump Administration may be trying to force out Federal Trade Commission Chair Joe Simons or merely interviewing replacements if he steps down next year should President Donald Trump still be in the White House next year. Given the reports that Simons has resisted pressure from the White House to comply with the executive order on Section 230 by investigating social media platforms, Simons has likely not won any new fans at 1600 Pennsylvania Avenue. Having said that, removing an FTC Commissioner is much harder than other top positions in the U.S. government, and the FTC is designed to be insulated from political pressure. However, Commissioners are politicians, too, and carefully gauge the direction the wind is blowing. That being said, Simons has also sent out signals he will step down next year and return to private practice, so the interviewing of possible successors may be entirely normal in an Administration that usually does not operate normally.

© 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 Gordon Johnson from Pixabay

Further Reading, Other Developments, and Coming Events (17 August)

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

Coming Events

  • On 18 August, the National Institute of Standards and Technology (NIST) will host the “Bias in AI Workshop, a virtual event to develop a shared understanding of bias in AI, what it is, and how to measure it.”
  • The United States’ Department of Homeland Security’s (DHS) Cybersecurity and Infrastructure Security Agency (CISA) announced that its third annual National Cybersecurity Summit “will be held virtually as a series of webinars every Wednesday for four weeks beginning September 16 and ending October 7:”
    • September 16: Key Cyber Insights
    • September 23: Leading the Digital Transformation
    • September 30: Diversity in Cybersecurity
    • October 7: Defending our Democracy
    • One can register for the event here.
  • The Senate Judiciary Committee’s Antitrust, Competition Policy & Consumer Rights Subcommittee will hold a hearing on 15 September titled “Stacking the Tech: Has Google Harmed Competition in Online Advertising?.” In their press release, Chair Mike Lee (R-UT) and Ranking Member Amy Klobuchar (D-MN) asserted:
    • Google is the dominant player in online advertising, a business that accounts for around 85% of its revenues and which allows it to monetize the data it collects through the products it offers for free. Recent consumer complaints and investigations by law enforcement have raised questions about whether Google has acquired or maintained its market power in online advertising in violation of the antitrust laws. News reports indicate this may also be the centerpiece of a forthcoming antitrust lawsuit from the U.S. Department of Justice. This hearing will examine these allegations and provide a forum to assess the most important antitrust investigation of the 21st century.
  • On 22 September, the Federal Trade Commission (FTC) will hold a public workshop “to examine the potential benefits and challenges to consumers and competition raised by data portability.” By 21 August, the FTC “is seeking comment on a range of issues including:
    • How are companies currently implementing data portability? What are the different contexts in which data portability has been implemented?
    • What have been the benefits and costs of data portability? What are the benefits and costs of achieving data portability through regulation?
    • To what extent has data portability increased or decreased competition?
    • Are there research studies, surveys, or other information on the impact of data portability on consumer autonomy and trust?
    • Does data portability work better in some contexts than others (e.g., banking, health, social media)? Does it work better for particular types of information over others (e.g., information the consumer provides to the business vs. all information the business has about the consumer, information about the consumer alone vs. information that implicates others such as photos of multiple people, comment threads)?
    • Who should be responsible for the security of personal data in transit between businesses? Should there be data security standards for transmitting personal data between businesses? Who should develop these standards?
    • How do companies verify the identity of the requesting consumer before transmitting their information to another company?
    • How can interoperability among services best be achieved? What are the costs of interoperability? Who should be responsible for achieving interoperability?
    • What lessons and best practices can be learned from the implementation of the data portability requirements in the GDPR and CCPA? Has the implementation of these requirements affected competition and, if so, in what ways?”
  • The Federal Communications Commission (FCC) will hold an open meeting on 30 September, but an agenda is not available at this time.

Other Developments

  • On 14 August, the California Office of Administrative Law (OAL) approved the Attorney General’s proposed final regulations to implement the California Consumer Privacy Act (CCPA) (A.B.375) and they took effect that day. The Office of the Attorney General (OAG) had requested expedited review so the regulations may become effective on 1 July as required by the CCPA. With respect to the substance, the final regulations are very similar to the third round of regulations circulated for comment in March, in part, in response to legislation passed and signed into law last fall that modified the CCPA.
    • The OAL released an Addendum to the Final Statement of Reasons and explained
      • In addition to withdrawing certain provisions for additional consideration, the OAG has made the following non-substantive changes for accuracy, consistency, and clarity. Changes to the original text of a regulation are non-substantive if they clarify without materially altering the requirements, rights, responsibilities, conditions, or prescriptions contained in the original text.
    • For further reading on the third round of proposed CCPA regulations, see this issue of the Technology Policy Update, for the second round, see here, and for the first round, see here. Additionally, to read more on the legislation signed into law last fall, modifying the CCPA, see this issue.
    • Additionally, Californians for Consumer Privacy have succeeded in placing the “California Privacy Rights Act” (CPRA) on the November 2020 ballot. This follow on statute to the CCPA could again force the legislature into making a deal that would revamp privacy laws in California as happened when the CCPA was added to the ballot in 2018. It is also possible this statute remains on the ballot and is added to California’s laws. In either case, much of the CCPA and its regulations may be moot or in effect for only the few years it takes for a new privacy regulatory structure to be established as laid out in the CPRA. See here for more detail.
  • In a proposed rule issued for comment, the Federal Communications Commission (FCC) explained it is taking “further steps to protect the nation’s communications networks from potential security threats as the [FCC] integrates provisions of the recently enacted Secure and Trusted Communications Networks Act of 2019 (Secure Networks Act) (P.L. 116-124) into its existing supply chain rulemaking proceeding….[and] seeks comment on proposals to implement further Congressional direction in the Secure Networks Act.” Comments are due by 31 August.
    • The FCC explained
      • The concurrently adopted Declaratory Ruling finds that the 2019 Supply Chain Order, 85 FR 230, January 3, 2020, satisfies the Secure Networks Act’s requirement that the Commission prohibit the use of funds for covered equipment and services. The Commission now seeks comment on sections 2, 3, 5, and 7 of the Secure Networks Act, including on how these provisions interact with our ongoing efforts to secure the communications supply chain. As required by section 2, the Commission proposes several processes by which to publish a list of covered communications equipment and services. Consistent with sections 3, 5, and 7 of the Secure Networks Act, the Commission proposes to (1) ban the use of federal subsidies for any equipment or services on the new list of covered communications equipment and services; (2) require that all providers of advanced communications service report whether they use any covered communications equipment and services; and (3) establish regulations to prevent waste, fraud, and abuse in the proposed reimbursement program to remove, replace, and dispose of insecure equipment.
    • The agency added
      • The Commission also initially designated Huawei Technologies Company (Huawei) and ZTE Corporation (ZTE) as covered companies for purposes of this rule, and it established a process for designating additional covered companies in the future. Additionally, last month, the Commission’s Public Safety and Homeland Security Bureau issued final designations of Huawei and ZTE as covered companies, thereby prohibiting the use of USF funds on equipment or services produced or provided by these two suppliers.
      • The Commission takes further steps to protect the nation’s communications networks from potential security threats as it integrates provisions of the recently enacted Secure Networks Act into the Commission’s existing supply chain rulemaking proceeding. The Commission seeks comment on proposals to implement further Congressional direction in the Secure Networks Act.
  • The White House’s Office of Science & Technology Policy (OSTP) released a request for information (RFI) “[o]n behalf of the National Science and Technology Council’s (NSTC) Subcommittee on Resilience Science and Technology (SRST), OSTP requests input from all interested parties on the development of a National Research and Development Plan for Positioning, Navigation, and Timing (PNT) Resilience.” OSTP stated “[t]he plan will focus on the research and development (R&D) and pilot testing needed to develop additional PNT systems and services that are resilient to interference and manipulation and that are not dependent upon global navigation satellite systems (GNSS)…[and] will also include approaches to integrate and use multiple PNT services for enhancing resilience. The input received on these topics will assist the Subcommittee in developing recommendations for prioritization of R&D activities.”
    • Executive Order 13905, Strengthening National Resilience Through Responsible Use of Positioning, Navigation, and Timing Services, was issued on February 12, 2020, and President Donald Trump explained the policy basis for the initiative:
      • It is the policy of the United States to ensure that disruption or manipulation of PNT services does not undermine the reliable and efficient functioning of its critical infrastructure. The Federal Government must increase the Nation’s awareness of the extent to which critical infrastructure depends on, or is enhanced by, PNT services, and it must ensure critical infrastructure can withstand disruption or manipulation of PNT services. To this end, the Federal Government shall engage the public and private sectors to identify and promote the responsible use of PNT services.
    • In terms of future steps under the EO, the President directed the following:
      • The Departments of Defense, Transportation, and Homeland Security must use the PNT profiles in updates to the Federal Radionavigation Plan.
      • The Department of Homeland Security must “develop a plan to test the vulnerabilities of critical infrastructure systems, networks, and assets in the event of disruption and manipulation of PNT services. The results of the tests carried out under that plan shall be used to inform updates to the PNT profiles…”
      • The heads of Sector-Specific Agencies (SSAs) and the heads of other executive departments and agencies (agencies) coordinating with the Department of Homeland Security, must “develop contractual language for inclusion of the relevant information from the PNT profiles in the requirements for Federal contracts for products, systems, and services that integrate or utilize PNT services, with the goal of encouraging the private sector to use additional PNT services and develop new robust and secure PNT services. The heads of SSAs and the heads of other agencies, as appropriate, shall update the requirements as necessary.”
      • the Federal Acquisition Regulatory Council, in consultation with the heads of SSAs and the heads of other agencies, as appropriate, shall incorporate the [contractual language] into Federal contracts for products, systems, and services that integrate or use PNT services.
      • The Office of Science and Technology Policy (OSTP) must “coordinate the development of a national plan, which shall be informed by existing initiatives, for the R&D and pilot testing of additional, robust, and secure PNT services that are not dependent on global navigation satellite systems (GNSS).”
  • An ideologically diverse bipartisan group of Senators wrote the official at the United States Department of Justice in charge of the antitrust division and the chair of the Federal Trade Commission (FTC) “regarding allegations of potentially anticompetitive practices and conduct by online platforms toward content creators and emerging competitors….[that] stemmed from a recent Wall Street Journal report that Alphabet Inc., the parent company of Google and YouTube, has designed Google Search to specifically give preference to YouTube and other Google-owned video service providers.”
    • The Members asserted
      • There is no public insight into how Google designs its algorithms, which seem to deliver up preferential search results for YouTube and other Google video products ahead of other competitive services. While a company favoring its own products, in and of itself, may not always constitute illegal anticompetitive conduct, the Journal further reports that a significant motivation behind this action was to “give YouTube more leverage in business deals with content providers seeking traffic for their videos….” This exact conduct was the topic of a Senate Antitrust Subcommittee hearing led by Senators Lee and Klobuchar in March this year.
    • Senators Thom Tillis (R-NC), Mike Lee (R-UT), Amy Klobuchar (D-MN), Richard Blumenthal (D-CT), Marsha Blackburn (R-TN), Josh Hawley (R-MO), Elizabeth Warren (D-MA), Mazie Hirono (D-HI), Cory Booker (D-NJ) and Ted Cruz (R-TX) signed the letter.
  • The National Security Agency (NSA) and the Federal Bureau of Investigation (FBI) released a “Cybersecurity Advisory [and a fact sheet and FAQ] about previously undisclosed Russian malware” “called Drovorub, designed for Linux systems as part of its cyber espionage operations.” The NSA and FBI asserted “[t]he Russian General Staff Main Intelligence Directorate (GRU) 85th Main Special Service Center (GTsSS) military unit 26165” developed and deployed the malware. The NSA and FBI stated the GRU and GTsSS are “sometimes publicly associated with APT28, Fancy Bear, Strontium, and a variety of other identities as tracked by the private sector.”
    • The agencies contended
      • Drovorub represents a threat to National Security Systems, Department of Defense, and Defense Industrial Base customers that use Linux systems. Network defenders and system administrators can find detection strategies, mitigation techniques, and configuration recommendations in the advisory to reduce the risk of compromise.
  • The United States Department of Homeland Security’s (DHS) Cybersecurity and Infrastructure Security Agency (CISA) published Cybersecurity Best Practices for Operating Commercial Unmanned Aircraft Systems (UAS) “a companion piece to CISA’s Foreign Manufactured UASs Industry Alert,…[to] assist in standing up a new UAS program or securing an existing UAS program, and is intended for information technology managers and personnel involved in UAS operations.” CISA cautioned that “[s]imilar to other cybersecurity guidelines and best practices, the identified best practices can aid critical infrastructure operators to lower the cybersecurity risks associated with the use of UAS, but do not eliminate all risk.”
  • The United States Department of Homeland Security’s (DHS) Cybersecurity and Infrastructure Security Agency (CISA) released the “Identity, Credential, and Access Management (ICAM) Value Proposition Suite of documents in collaboration with SAFECOM and the National Council of Statewide Interoperability Coordinators (NCSWIC), Office of the Director of National Intelligence (ODNI), and Georgia Tech Research Institute (GTRI)…[that] introduce[] ICAM concepts, explores federated ICAM use-cases, and highlights the potential benefits for the public safety community:”
    • ICAM Value Proposition Overview
      • This document provides a high-level summary of federated ICAM benefits and introduces domain-specific scenarios covered by other documents in the suite.
    • ICAM Value Proposition Scenario: Drug Response
      • This document outlines federated ICAM use cases and information sharing benefits for large-scale drug overdose epidemic (e.g., opioid, methamphetamine, and cocaine) prevention and response.

Further Reading

  • Trump’s Labor Chief Accused of Intervening in Oracle Pay Bias Case” By Noam Scheiber, David McCabe and Maggie Haberman – The New York Times. In the sort of conduct that is apparently the norm across the Trump Administration, there are allegations that the Secretary of Labor intervened in departmental litigation to help a large technology firm aligned with President Donald Trump. Starting in the Obama Administration and continuing into the Trump Administration, software and database giant Oracle was investigated, accused, and sued for paying non-white, non-male employees significantly less in violation of federal and state law. Estimates of Oracle’s liability ranged between $300-800 million, and litigators in the Department of Labor were seeking $400 million and had taken the case to trial. Secretary Eugene Scalia purportedly stepped in and lowered the dollar amount to $40 million and the head litigator is being offered a transfer from Los Angeles to Chicago in a division in which she has no experience. Oracle’s CEO Safra Catz and Chair Larry Ellison have both supported the President more enthusiastically and before other tech company heads engaged.
  • Pentagon wins brief waiver from government’s Huawei ban” By Joe Gould – Defense News. A Washington D.C. trade publication is reporting the Trump Administration is using flexibility granted by Congress to delay the ban on contractors using Huawei, ZTE, and other People’s Republic of China (PRC) technology for the Department of Defense. Director of National Intelligence John Ratcliffe granted the waiver at the request of Under Secretary of Defense for Acquisition and Sustainment Ellen Lord, claiming:
    • You stated that DOD’s statutory requirement to provide for the military forces needed to deter war and protect the security of out country is critically important to national security. Therefore, the procurement of goods and services in support of DOD’s statutory mission is also in the national security interests of the United States.
    • Section 889 of the “John S. McCain National Defense Authorization Act (NDAA) for FY 2019” (P.L. 115-232) requires agencies to remove this equipment and systems and also not to contract with private sector entities that use such equipment and services. It is the second part of the ban the DOD and its contractors are getting a reprieve from for an interim rule putting in place such a ban was issued last month.
  • DOD’s IT supply chain has dozens of suppliers from China, report finds” By Jackson Barnett – fedscoop. A data analytics firm, Govini, analyzed a sample of prime contracts at the Department of Defense (DOD) and found a surge in the presence of firms from the People’s Republic of China (PRC) in the supply chains in the software and information technology (IT) sectors. This study has obvious relevance to the previous article on banning PRC equipment and services in DOD supply chains.
  • Facebook algorithm found to ‘actively promote’ Holocaust denial” by Mark Townsend – The Guardian. A British counter-hate organization, the Institute for Strategic Dialogue (ISD), found that Facebook’s algorithms lead people searching for the Holocaust to denial sites and posts. The organization found the same problem on Reddit, Twitter, and YouTube, too. ISD claimed:
    • Our findings show that the actions taken by platforms can effectively reduce the volume and visibility of this type of antisemitic content. These companies therefore need to ask themselves what type of platform they would like to be: one that earns money by allowing Holocaust denial to flourish, or one that takes a principled stand against it.

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