Digital Updates – July

On July 31, Representative Mark DeSaulnier, one of the co-sponsors of H.R. 2054, the “Journalism Competition and Preservation Act,” participated in a panel on the big tech’s impact on local journalism in San Francisco, CA. The panel, organized by the Save Journalism Project, also included representatives from multiple news organizations. During his remarks, DeSaulnier noted the effect the demise of local news has on local politics and highlighted a bill he introduced earlier this year, H.R. 3126, the “Saving Local News Act,” that would make it easier for local publishers to become classified as nonprofits. He also argued that journalists should be to license their content in order to get paid when it is distributed on digital platforms. Laura Bassett, co-founder of the Save Journalism Project, noted the need for online platforms to share digital advertising revenues with publishers. Read more about the event here.

On July 30, the Senate Intellectual Property Subcommittee held a U.S. Copyright Office oversight hearing with the recently appointed Register of Copyrights Karyn Temple as the sole witness. During the hearing, Senator Thom Tillis (R-NC), Chairman of the Subcommittee, noted that he is planning on establishing a bipartisan and bicameral working group to examine Copyright Office modernization. The working group is expected to hold roundtables to gather stakeholder views in the fall. Senator Tillis indicated that the working group is likely to introduce legislation based on this feedback before the end of the year. Senator Tillis also expressed concerns over the autonomy and authority of the Copyright Office. Watch the oversight hearing here.

On July 29, the Court of Justice of the European Union (ECJ) found that website operators are liable for data protection violations that arise from the use of third-party widgets and plug-ins, such as Facebook’s “Like” and “Share” buttons. The case (C-40/17) was brought against a German online retailer Fashion ID that shared data with Facebook through a “Like” button embedded on its site. The ECJ held that publishers can be data controllers jointly with Facebook, and other similar plug-in creators, when using such widgets, and therefore liable for violations of the EU data protection rules. Publishers embedding social plug-ins must therefore seek user consent for the data transfer. The European General Data Protection Regulation (GDPR) came into force in May 2018 and sets stringent data protection standards for companies operating in Europe. Read more about the decision here.

On July 29, the Alliance asked our members to publish an op-ed and to reach out to their Members of Congress during the recess to express support for a limited, one-time safe harbor for news publishers to collectively negotiate with the dominant online platforms for a better deal. Earlier this year, lawmakers in both the House and the Senate introduced the Journalism Competition and Preservation Act that would help protect the future of high-quality journalism. The House bill, H.R. 2054, was introduced by Reps. David Cicilline (D-RI) and Doug Collins (R-GA), while the Senate version, S. 1700, was sponsored by Sens. John Neely Kennedy (R-LA) and Amy Klobuchar (D-MN). The Alliance is grateful to the original authors and hopes to build on the momentum to secure more co-sponsors for the bill. The op-ed by Alliance President & CEO, David Chavern, is available here.

On July 26, Representatives Paul Gosar (R-AZ), Mark Meadows (R-NC), and Steve King (R-IA) introduced a bill that would amend Section 230 of the Communications Decency Act to remove legal protections from online platforms that remove “objectionable” but not illegal content. The “Stop the Censorship Act” would retain the ability of online platforms to engage in good faith removal of illegal material and to provide filtering services for users. Currently, Section 230 provides online platforms with broad liability protections for third-party content. The House bill comes shortly after Senator Josh Hawley (R-MO) introduced his “Ending Support for Internet Censorship Act” that would require online platforms to be politically neutral. Read more about the House bill here.

On July 26, the Australian Competition & Consumer Commission (ACCC) published its long-awaited report on the impact of the dominant online platforms and aggregators on the media and digital advertising services. The report includes 23 recommendations to the Australian Government, including requiring platforms to treat news organizations fairly and to offer data and revenue sharing options. Danielle Coffey, Alliance Senior Vice President, Strategic Initiatives, and Counsel, commended the ACCC’s findings in a statement, noting that they reflect the “realities of the news business, not only in Australia, but around the world.” The statement also called on the Australian Government to act on the recommendations made in the Digital Platforms Inquiry. Read the Alliance statement here and the full report here.

On June 24, the Federal Trade Commission imposed a $5 billion penalty on Facebook, marking the largest penalty ever imposed on a U.S. company for consumer privacy violations. The settlement also includes other restrictions on Facebook, including requiring the company to reduce Facebook CEO Mark Zuckerberg’s control over consumer privacy decisions by establishing an independent privacy committee and strengthening external oversight of the company. The order also requires Facebook to monitor external apps more carefully. The agency’s two Democratic members voted against the settlement agreement. The settlement came the same day as the Securities and Exchange Commission announced a $100 million settlement with Facebook for misuse of user data. Read more about the FTC’s settlement here and the SEC’s settlement here.

On July 23, the Department of Justice announced that its Antitrust Division will launch an investigation into the dominant online platforms, including their market power and anticompetitive practices. The investigation will focus on concerns over the platforms’ search, social media, and online retail services, and seek input from the public and other industry participants. The investigation comes at a time when big tech companies are already under increased scrutiny in Washington. Read more about the DOJ’s announcement here.

The Senate Committee on Banking, Housing and Urban Affairs on July 16 held a hearing on Facebook’s proposed cryptocurrency, Libra, titled, “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations.” The head of Facebook’s currency project, David Marcus, gave testimony and answered questions about the necessity and usefulness of Libra, as well as privacy concerns related to Facebook’s previous data breaches and overwhelming control of user data. Senators also asked about Facebook’s impact on information and journalism. Senators Sherrod Brown (D-OH) and John Kennedy (R-LA) both questioned Marcus on Facebook’s “disruption” of the news business and its replacement of trusted information sources in many users’ lives. You can watch the full hearing here.

On July 16, the Senate Subcommittee on the Constitution held a hearing on Google and its affiliates’ alleged online censorship of conservative voices, titled, “Google and Censorship Through Search Engines.” Focused primarily on Google Search and YouTube, the hearing consisted of questioning of Google Vice President of Government Affairs and Public Policy, Karan Bhatia, by a panel of experts and self-described victims of Google’s censorship. Bhatia faced intense questioning from Republican Senators about Google’s algorithms and the role Google plays as a neutral public forum, while allegedly censoring conservatives. Democratic Senator Mazie Hirono (D-HI) focused her questioning on Google’s lack of proactive moderation when it comes to violent or hateful content. The Senators also discussed the role of Section 230 of the Communications Decency Act and the statute’s usefulness in the current digital ecosystem. You can watch the full hearing here.

On July 16, the House Committee on the Judiciary held a hearing on the impact of the tech giants on small businesses and entrepreneurs, titled, “Online Platforms and Market Power, Part 2: Innovation and Entrepreneurship.” The hearing, led by House Antitrust Subcommittee Chairman David Cicilline (D-RI), was a follow-up to a June 11 hearing titled, “Online Platforms and Market Power, Part 1: The Free and Diverse Press.” Witnesses included representatives from Google, Facebook, Amazon and Apple, as well as legal and economic experts who discussed the impacts of Big Tech on competing businesses. Among the issues discussed were the threats of digital piracy and copyright infringement on creators; the perceived lack of competition faced by the tech giants; and, briefly, the impact of Google and other digital giants on the news business. You can watch the full hearing here.

According to news reports, the Federal Trade Commission has voted to fine Facebook $5 billion for privacy violations following multiple well-publicized data breaches, including the Cambridge Analytica scandal. The agency reportedly approved the fine by a 3-2 vote. The fine, which will still have to be approved by the Department of Justice, is the highest levied against a technology company. The FTC has not yet confirmed the news. Read more here.