Digital Updates – June

In January 2020, Google announced that it would be devaluing third-party cookies within two years “to make the web more private and secure for users, while also supporting publishers.” While some advertisers considered shifting their budgets and ad tech vendors scrambled to come up with new ways to stay relevant, some publishers wondered if there would be an opportunity for them to regain a foothold with their users’ first-party data. However, when Google announced its “privacy sandbox” and Federated Learning of Cohorts (FLoC) ad-targeting solutions, many pointed out that these suggestions as designed largely benefited Google. Some government regulators are investigating whether FLoC is anticompetitive – both the UK and EU announced plans. These investigations may be partially behind Google’s announcement on June 24 that it would delay the phasing out of third-party cookies in Chrome to “late 2023.” In a blog post, product manager Vinay Goel said, “It’s become clear that more time is needed across the ecosystem to get this right.”

The House Judiciary Committee held a markup hearing for a slate of antitrust bills aimed at reigning in the power of the nation’s largest tech companies. The bills included the Mergers Filing Fee Modernization Act of 2021 (H.R. 3843), the State Antitrust Enforcement Venue Act of 2021 (H.R. 3460), the Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act (H.R. 3849), the Platform Competition and Opportunity Act of 2021 (H.R. 3826), the American Choice and Innovation Online Act (H.R. 3816), and the Ending Platform Monopolies Act (H.R. 3825). The six bills were approved via rollcall vote with bipartisan support, meaning they will continue to the entire House of Representatives. These bills, along with the Journalism Competition and Preservation Act of 2021 (also known as the Safe Harbor Bill), which is set to be considered by the Committee with the remaining few antitrust bills, aim to restore fairness and competition to an online marketplace that has been lacking both for some time. If passed into law, these six bills and the JCPA would give news publishers a much better ability to reap the benefits of their hard work. However, the tech giants targeted by this legislation are not backing down. Several of the largest tech companies criticized the bills, saying they would do more harm than good, and are expected to continue opposing the antitrust bills as they proceed through the legislative process. A statement released by House Judiciary Chair Jerrold Nadler (D-NY) can be read here.

On June 10, the New York State legislature ended its session, failing to pass controversial bills related to antitrust and consumer privacy. While the legislature had considered various consumer privacy bills, none of them passed. The bills ranged from narrow legislation regarding users’ right to know to several comprehensive online privacy bills. In addition to the consumer privacy bills, the state Assembly failed to adopt the highly controversial antitrust bill, S933A. The bill would have established a $9.2 million threshold for pre-merger notifications and a low market share threshold for the bill’s abuse of dominance provisions, in addition to allowing private class actions. While aimed at big tech companies, the bill would have arguably affected many other businesses operating in the state. The bill passed the state Senate earlier in June. Meanwhile, the legislature did pass a bill (S2890B/A5837B) requiring publishers of electronic books to offer licenses to state public libraries on reasonable terms. The bill, similar to one passed in Maryland earlier this year, defines some key terms broadly and has raised federal pre-emption concerns. The bill is now expected to go to the governor sometime later this year.

On June 25, Google published a blog with its plan to start a “licensing program to support the news industry.” The program is supposed to “help participating publishers monetize their content through an enhanced storytelling experience.” Google will start by allowing a small number of publishers in specific countries to participate in the program, with plans to expand. Read more here. Google has also made claims that they help news publishers build audiences and provide compensation to news publishers by driving traffic to their websites — a claim the Alliance debunks in its White Paper.

On June 17, Senator Josh Hawley (R-MO) proposed the “Limiting Section 230 Immunity to Good Samaritans Act,” requiring digital platforms to fulfill their duty of good faith to receive Section 230 immunity. The bill would allow users to sue tech companies for breaching a “contractual duty of good faith.” This good faith would require non-discriminatory enforcement of their terms of service and “filing to honor their promises.” The bill was co-sponsored by Senators Marco Rubio (R-FL), Mike Braun (R-IN), and Rom Cotton (R-AK). Read more here. 

On June 17, the Department of Justice (DOJ) proposed changes to the Section 230 immunity that big tech currently enjoys. It includes requiring the platforms to more proactively address illicit content, as well as requiring consistency in removing objectionable material. This proposal would go through the Office of Management and Budget to be the official administrative position before requiring Congressional legislation. Read more here.

On June 16, Gallup and the Knight Foundation released a poll showing that eight out of every 10 Americans don’t trust big tech to moderate content on their platforms. Despite over 80 percent of respondents favoring the removal of false or misleading information about elections or health issues, they don’t trust the digital platforms or the government to decide what to remove. This comes as social media sites have increasingly come under fire for their internal fact-checking and content moderation. Read more here.

AdAge reports that certain marketers are blocking keywords that would put advertising content next to Black Lives Matter coverage. These keywords include “BLM,” “George Floyd” and “black people.” Jason Kint, CEO of Digital Content Next, said “advertisers are running away from” content related to Black Lives Matter. The cost per impression (CPM) is reportedly 57 percent lower on Black Lives Matter content than other content. With news publishers already struggling to monetize content, ad companies are now facing criticism for shying away from important issues. Read more here.

On June 9, Senators Marco Rubio (R-FL), Kelly Loeffler (R-GA), Kevin Cramer (R-ND), and Josh Hawley (R-MO) requested that the FCC “clearly define the framework under which technology firms, including social media companies, receive protections under Section 230.” The letter, addressed to FCC Chairman Ajit Pai, was in reference to President Trump’s May 28 Executive Order on Preventing Online Censorship and the FCC’s role in the clarification process. FCC Commissioner response to the executive order has been mixed. Democratic Commissioner Jessica Rosenworcel said the Executive Order would turn the FCC into the president’s “speech police,” while Republican Commissioner Brendan Carr applauded the effort to hold tech companies accountable. Section 230 was not on the agenda for the FCC’s monthly open meeting on June 9. Read more here. 

On June 2, Public Knowledge’s Policy Counsel Meredith Rose testified that Section 512 has allowed online censorship to thrive. The Senate Committee on the Judiciary’s Subcommittee on Intellectual Property hosted a hearing titled “Is the DMCA’s Notice-and-Takedown System Working in the 21st Century?” discussing the complex issues facing copyright policy today. The Committee also heard testimony from Don Henley, a veteran in the music industry, who spoke about how content creators are being robbed of their intellectual property by the current notice-and-takedown regime. This hearing followed the U.S. Copyright Office issuing a study of proposed changes to Section 512, after finding it was “tilted askew” of Congress’ original purpose. Watch the hearing here.

Twitter recently rejected an ad campaign by the Free State Foundation opposing net neutrality and calling for the internet not to be regulated as a public utility. The FCC has long since finished its net neutrality rulemaking, revoking most of the Obama-era regulations. Twitter has been supportive of net neutrality, and the Free State Foundation alleges that is a reason for its refusal to promote the tweet, calling the proposed ad “political.” In its ad policy, Twitter states it will not promote a tweet that advocates “for or against” political content that includes any reference to “legislation, regulation, directive, or judicial outcome.” This comes after Twitter came under fire from President Trump for fact-checking and placing warnings on some of his tweets. Read more here. 

On June 5, Facebook responded to the Australian Competition and Consumer Commission’s (ACCC) Mandatory News Media Bargaining Code proposal, saying the “competitive rivalry in the relationship between digital platforms and news publishers” is “healthy” as it is. This comes in the wake of news publishers struggling to monetize content and having to lay off workers, problems only exacerbated by the coronavirus. In its response, Facebook claimed that removing news content from its website would have an insignificant impact on Facebook’s revenues in Australia because “most users do not come to Facebook with the intention of viewing news.” Facebook believes its already-existing efforts to support journalism and the benefits publishers receive from sharing their content on the platform are sufficient compensation. Read more here. 

On June 2, the Center for Democracy and Technology filed a complaint in the District Court for the District of Columbia claiming that President Trump’s recent executive order violates the First Amendment. The “Executive Order on Preventing Online Censorship” serves as directive to both the FCC and FTC to begin the process of limiting Section 230’s legal safeguards afforded to digital platforms. The order was signed after Twitter began issuing warnings alongside many of President Trump’s tweets. The complaint claims the Order attacks Twitter — a private company — and will chill constitutionally protected speech. In February, the Ninth Circuit held that the First Amendment does not apply to big tech, allowing them an unprecedented amount of editorial power with little accountability. Read more here.