Tech on Front Burner As Congress and Courts Tackle Multiple Issues

February 2023 US Policy Update

The U.S. Supreme Court has a decision to make. Will they override We the People?

The legal plumbing at the heart of all this is section 230 of the mostly-defunct Communications Decency Act – the “26 words that created the internet.Passed into law in the mid 1990’s, section 230 established guiding principles for managing content on the only-just-emerging internet; that internet platforms aren’t responsible for what you post (surprise – you are!), and that platforms are free to moderate anyone’s content according to whatever policies they choose for their service. Whether you like that stance or not, it’s embedded in law, and the internet seems to have sort of flourished under that rule? Yay Congress. Democracy gives you tools to change that, if you’d like. Please vote.

Search, recommendation, and moderation are fundamental to you finding what you want in the vast sea of internet content. If there was a better way, 40 years and millions of brilliant minds would have found it? Without 230 – if anyone hosting content on the internet can be sued for good/bad moderation – either the terrorist content wins or the internet becomes just another TV station. All third party content all the time, or nothing but network. And if recommendation/search (these are the same thing – change my mind) also attract lawsuits, then good luck finding anything. Care to speed-scroll every idiot thing the tribes upload to Twitter or Youtube in real time? Don’t believe me – read the 50+ briefs from both sides or listen to this guy.

Developers Alliance Releases Statement on NTIA Report on App Ecosystem

On February 1, the Developers Alliance released a statement in response to the National Telecommunications and Information Administration’s report titled “Competition in the Mobile Application Ecosystem.” The report concluded that Apple and Google control too much of the app ecosystem. It read in part: “The policies that Apple and Google have in place in their own mobile app stores have created unnecessary barriers and costs for app developers, ranging from fees for access to functional restrictions that favor some apps over others.” While generally critical of the current app ecosystem, the report did equivocate some by acknowledging the job creation the industry is responsible for. 

Said Bruce Gustafson, CEO of the Developers Alliance:

“The mobile app economy is a complex system that manages to balance the conflicting objectives of a wide range of participants. Millions of advertisers, developers, consumers, retail owners, media and entertainment companies, and businesses rely on the stability and controls they’ve helped these platforms develop. To make the system work for everybody, everybody has had to accept some of the burden: no one gets everything they want, or the tragedy of the commons takes over. Apple and Google are not government entities, and mobile phones are not a social service. These ecosystems already balance privacy, security, value flows and consumer benefits. A handful of self-interested commentators cannot negate the evidence that millions of developers have been successfully engaged with these platforms for over a decade.

House Panel Holds Privacy Hearing

The House Energy and Commerce Subcommittee on Innovation, Data, and Commerce held a hearing on March 1 to examine privacy issues. While the hearing was largely educational and not specifically focused on the American Data Privacy and Protection Act, each of the witnesses endorsed the proposal and said lawmakers should work to pass the same or similar legislation this Congress. Additionally, the witnesses were in agreement that privacy reforms must be comprehensive, protecting both children and adults, and set a unified, national floor. Many members of Congress pointed out that any reforms must protect small- and medium-sized firms from harmful litigation. 

The American Data Privacy and Protection Act was passed with broad, bipartisan support in the House Energy and Commerce Committee last Congress but was never considered on the House floor over preemption concerns. Similar legislation has not yet been introduced in this Congress. 

Senate Panel Holds Hearing on Kids and Tech

The Senate Judiciary Committee on February 14, held a hearing on children’s safety online. The wide-ranging hearing covered several issues including content moderation, privacy, encryption, and even “tech addiction.” Senators and witnesses were very critical of the tech industry. One witness called for the end of end-to-end encryption. Another witness said the only way to protect kids online was to strike section 230. Others said there should be a ban on surveillance marketing. And still others called for updates to the Children’s Online Privacy Protection Act (COPPA). Updates to COPPA are something Congress should consider, but other suggestions like striking encryption and section 230 will undeniably make children more vulnerable online. Both are strong pillars to protect children and their privacy while they are exploring the digital world. 

Notably, Senator Lindsey Graham (R-SC) said he was working with Senator Elizabeth Warren (D-MA) on legislation to create a digital regulatory agency. Senator Graham also promoted his EARN IT Act. The EARN IT Act would limit liability protections for platforms with regard to online child exploitation. In addition, it would create the National Commission on Online Child Sexual Exploitation Prevention, which would develop best practices for platforms to prevent, reduce, and respond to online child exploitation. 

Internet PACT Act Introduced in Senate

Senators Brian Schatz (D-HI) and John Thune (R-SD) introduced the Internet Platform Accountability and Consumer Transparency (Internet PACT) Act on February 16. The bill would alter the Communications Act by requiring social media companies to create clear content moderation policies. 

Said Senator Schatz:

“Online companies need to establish clear content moderation policies, actually follow those policies, and respond to consumers when they raise concerns about their implementation. By requiring these simple things, our bipartisan bill will better protect consumers and hold companies more accountable.”

Said Senator Thune: 

“This bipartisan legislation is a common-sense approach to preserving user-generated content and free speech on the internet and holding Big Tech accountable by providing much-needed transparency to online consumers. In order to keep up with America’s ever-expanding digital landscape, and all of the consumers who depend on it, it’s important to pursue policies – like the Internet PACT Act – that protect online consumers by giving them more control of their online experience.”

The proposal would 1) require platforms to clearly state their content moderation policies in an accessible manner for consumers; 2) amend section 230 to require that large platforms remove court-determined illegal content within four days; 3) require large platforms to provide due process protections to consumers through a defined complaint system that processes reports and notifies users of moderation decisions within 21 days, and allows consumers to appeal platforms’ content moderation decisions; and 4) provide some flexibility for smaller firms when they respond to user complaints and remove illegal content. 

See Something, Say Something Online Act Introduced in Senate

Senators Joe Manchin (D-WV) and John Cornyn (R-TX) introduced the See Something, Say Something Online Act on January 30. The bill would overhaul section 230 of the Communications Act, requiring developers to monitor their platforms and report suspicious activity. 

Said Senator Manchin:

“Last year alone, the Drug Enforcement Administration seized enough fentanyl to kill every American, much of it ordered over the Internet and sent by mail from China. The Internet has drastically changed since Section 230 was written in 1996, nearly 30 years ago, and while it keeps us all more connected than ever before, it also makes it easier to conduct illegal activity online. We must amend Section 230 to better reflect the way the Internet impacts our lives today – both good and bad. Senator Cornyn and I reintroduced our bipartisan legislation that uses a commonsense approach to create a clear mechanism for reporting criminal activity online, requiring companies to take reasonable steps to report unlawful activity or be held liable for that failure. It is past time we held these sites accountable.”

Said Senator Cornyn:

“High-level drug offenses, violent crimes like murder, and even acts of terrorism are documented online, and it’s past time that technology platforms play a role in standing up for the victims of these types of crimes by saying something when they see something.  By requiring technology platforms to file reports when they become aware that a major crime has been committed, this legislation keeps platforms accountable and helps authorities deliver justice.”

The bill would: 1) require companies to report suspicious activity on their platforms to law enforcement; 2) create an office within the Department of Justice to act as a clearinghouse for those reports, similar to the Financial Crimes Enforcement Network within the Department of Treasury; 3) raise the threshold for reporting serious crimes to ensure users’ privacy remains safe; and 4) require that companies take reasonable steps to prevent or address unlawful activity and can be held liable if they fail to report criminal activity. 

Federal Court Ruling a Win for Developers and Acquisitions

A U.S. District Court on February 1 declined to issue an injunction against Meta’s acquisition  of the maker of a virtual reality fitness app while the Federal Trade Commission pursues a separate case in administrative court. The decision against issuing the injunction is considered a major blow to the FTC’s efforts to curb mergers and acquisitions in the tech ecosystem. 

Said Bruce Gustafson, CEO of the Developers Alliance: 

“Entrepreneurs and VCs rely on predictable and rational markets when they invest in innovation. For many small developer-led companies that includes the potential to have their project acquired by a larger company with the resources to drive commercial scale. Large companies have outsourced R&D this way for many decades – this isn’t new. We thank Meta for championing developer innovators, and encourage the FTC to allow tomorrow’s innovators equal freedom to succeed.

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By Geoff Lane

Policy Counsel & Head of US Policy Geoff Lane serves as the Developer Alliance’s head of U.S. policy. In this role he oversees the organization’s federal legislative and regulatory agenda as well as state-level efforts. Prior to joining the Developers Alliance in 2022, Geoff worked with senior Democratic leadership in the House of Representatives. Since his time on Capitol Hill, he has held senior roles at various technology trade associations (including a previous stint at the Developers Alliance). At each stop he led efforts at the intersection of innovation and policy. He has worked on critical policy issues including privacy, encryption, patent reform, workforce development, corporate tax, tax nexus, and research and development. Geoff holds a B.A. from Miami University in Oxford, Ohio. When he is not working, you can find him booing all of his favorite Philadelphia sports teams. Geoff is based in Washington, D.C.

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