Emerging Technologies Washington Update

September 26, 2019

Pardon Our Dust

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This Week: McGuireWoods Consulting senior advisor Greg Walden testifies before Congress on drone policy, Senate Antitrust Subcommittee examines acquisitions of nascent or potential competitors by digital platforms, House Appropriations Subcommittee holds FTC oversight hearing, privacy advocate unveils second California ballot initiative.

Week in Review

With government spending authority set to expire next Monday and Congress scheduled to begin a two week recess after wrapping its work this week, the Senate today voted 82-15 to pass a House-passed continuing resolution (CR) to extend funding through November 21. The White House has indicated that the President will sign the bill in time to avert a shutdown. Meanwhile, the Senate Appropriations Committee advanced several more of its FY20 government spending bills today, namely its Commerce-Justice-Science, Homeland Security, Interior-Environment, State-Foreign Operations, and Legislative Branch measures. Committee Chairman Richard Shelby (R-AL) is scheduled to meet with the President today to discuss FY20 spending.

Elsewhere, the Senate confirmed several pending executive branch nominations, including Eugene Scalia’s nomination to serve as Secretary of Labor after the Senate Health, Education, Labor, and Pensions Committee advanced his nomination on Tuesday . It also approved several motions to instruct conferees on the National Defense Authorization Act, though formal conference negotiations began late and are expected to continue into mid-October, after the upcoming two-week recess.

On Wednesday, the Senate voted 54-41 to terminate the emergency declaration under which the President has shifted $3.6 billion from 127 military construction projects in 23 states to build a border wall. 11 Republicans supported the resolution. The President vetoed the measure in March, but there was not enough support in Congress to override the veto.

On Tuesday, Senators Amy Klobuchar (D-MN) and Tim Scott (R-SC), who co-chair the Senate Entrepreneurship Caucus, introduced the Enhancing Entrepreneurship for the 21st Century Act, which would require the Department of Commerce to study what is driving the so-called “startup slump.” Klobuchar and Scott co-founded the Caucus earlier this year.

On the other side of the Capitol, the House moved a number of non-controversial bills under suspension of the rules this week, including the SAFE Banking Act, which would ensure that financial institutions are not held liable under federal law for providing services to legal marijuana-related businesses. The bill passed 321-103.

President Trump began the week attending meetings and events around the UN General Assembly in New York, where he delivered keynote remarks at the Global Call to Protect Religious Freedom event and held bilateral meetings with world leaders including Pakistani President Arif Alvi, New Zealand Prime Minister Jacinda Ardern, Egyptian President Abdel Fattah, and Ukrainian President Volodymyr Zelensky, among others.

Looking Ahead

The House and Senate will be in recess next week and the following, returning after Columbus Day. NDAA conferees are aiming to bring a final package up for floor votes in each chamber by mid-October. Facing a November 21 deadline, Congressional leaders and the White House will also resume discussions around FY20 government spending.

McGuireWoods Consulting Senior Advisor Gregory S. Walden Testifies Before Congress on Drone Policy

This morning, McGuireWoods Consulting Senior Advisor and McGuireWoods LLP Partner Gregory S. Walden testified before the House Transportation and Infrastructure Subcommittee on Aviation on behalf of the Small UAV Coalition, to which he serves as Aviation Counsel. Walden, a former Federal Aviation Administration (FAA) Chief Counsel, was invited to testify on the drone subtitle of the FAA Reauthorization Act of 2018 during a Subcommittee hearing on the bill’s implementation.

“Together, Coalition member companies represent the innovative, cutting-edge technological leadership that in just a few short years, is poised to enable routine safe, secure, UAS integration. With your continued support, we are well on our way to securing a regulatory framework for commercial UAS operations that will not only capture, but exceed, our expectations and deliver untold economic and consumer benefits,” Walden told the Subcommittee. In addition to fielding questions from lawmakers about the status of the many drone-related mandates in the 2018 law, he also spoke to the importance of the pending FAA notice of proposed rulemaking (NPRM) for remote identification of drones, which is currently under review at the White House Office of Information and Regulatory Affairs (OIRA). His complete testimony is available here.

Walden is a member of the McGuireWoods Consulting Emerging Technologies practice group. In addition to serving as FAA Chief Counsel from 1988-1990, he has been both practicing aviation law and teaching at George Mason University Law School for the last 20 years.

Senate Antitrust Subcommittee Examines Acquisitions of Nascent or Potential Competitors by Digital Platforms

On Tuesday, the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights held a hearing on “Competition in Digital Technology Markets: Examining Acquisitions of Nascent or Potential Competitors by Digital Platforms” to discuss the efficacy of competition regulators with respect to technology company mergers. Chairman Lee (R-UT), Ranking Member Klobuchar (D-MN), and Senators Hawley (R-MO) and Blumenthal (D-CT) attended the hearing. Federal Trade Commission (FTC) Bureau of Competition Director Bruce Hoffman testified alongside American Antitrust Institute President Dr. Diana Moss, Economic Education At The Global Antitrust Institute Director Professor John Yu, and Trinity Ventures General Partner Patricia Nakache.

In his opening remarks, Chairman Lee emphasized that antitrust enforcement should strike an appropriate balance between mitigating anticompetitive conduct and allowing innovation to thrive. Other members of the Subcommittee criticized the FTC for failing to take stronger enforcement actions against technology companies that have absorbed nascent competitors over the last several years. In response, Hoffman provided the Subcommittee with an overview of the agency’s efforts to review and, when necessary, take enforcement action against mergers that present competition concerns and/or negative impacts to consumer welfare. Senators Hawley and Blumenthal in particular criticized FTC enforcement policies, including recent enforcement actions that they deem insufficient. 

House Appropriations Subcommittee Holds FTC Oversight Hearing

The FTC also appeared on Wednesday before the House Appropriations Subcommittee on Financial Services and General Government for an oversight hearing entitled “Federal Trade Commission: Protecting Consumers and Fostering Competition in the 21st Century” that featured testimony from Chairman Simons and Democratic Commissioner Chopra. The witnesses focused their opening remarks on discussing how the FTC would use increased resources to expand ongoing investigation activities and marketplace analysis. Both Simons and Chopra also responded to several questions regarding the FTC’s decision to fine Facebook and YouTube earlier this year.

In his opening remarks, Chairman Quigley (D-IL) noted the Subcommittee would like to ensure the Commission is using existing resources as efficiently as possible, noting that the panel’s FY20 spending bill proposes a $40 million increase in FTC funding to accommodate the Commission’s needs for ongoing investigations of marketplace competition. He and other Democratic members of the Subcommittee expressed concern that the FTC’s fines against Facebook and YouTube were insufficient to mitigate harmful business practices. Commissioner Chopra expressed similar concerns. Both Commissioner Chopra and Chairman Simons emphasized the need for Congress to pass comprehensive data privacy and security legislation to provide the FTC with more authorities necessary to maintain effective oversight of the technology industry.

Privacy Advocate Unveils Second California Ballot Initiative

Yesterday, Alastair Mactaggart, the privacy advocate who backed a 2018 California ballot initiative that prompted the legislature to enact the California Consumer Privacy Act (CCPA), unveiled a second initiative that he will seek to include on the state’s 2020 ballot. With CCPA set to go into effect in 2020, much of the 2019 legislative session was devoted to proposals by privacy advocates, industry, and others to amend, expand upon, or clarify the law. When the session ended earlier this month, lawmakers were able to reach consensus on just a few modest updates, leaving stakeholders on all sides of the debate disappointed.

Mactaggart’s second ballot initiative focuses on increasing consumer control over sensitive personal information, such as health, race, and geolocation data. It also seeks to enhance privacy for children and teenagers and to compel companies to disclose information about algorithms employed for targeted advertising. Further, it would prompt the state to establish a new agency specifically focused on privacy, currently the jurisdiction of the Attorney General.

After Mactaggart successfully secured a spot for his initiative on the 2018 ballot, he agreed to negotiate a legislative deal with state policymakers to circumvent an expensive campaign. They announced an agreement that would become CCPA one week before the ballot was finalized and Mactaggart withdrew his measure. This time, he will need 623,212 valid signatures to qualify for the 2020 ballot, and has indicated that he is unlikely to withdraw his measure again if successful.