Emerging Technologies Washington Update

March 12, 2020

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This Week: Senate Antitrust Subcommittee convenes hearing on self-preferencing, Senate Judiciary holds hearing on EARN IT Act, White House meets with tech companies to discuss Coronavirus response, Senate Commerce Committee advances US SAFEWEB Reauthorization, Industries of the Future Act.

Week in Review

Late last night, after the President addressed the nation from the Oval Office, House Democrats unveiled legislation to respond to the coronavirus outbreak. House Democratic leadership was scheduled to bring the bill to the floor this morning, but Speaker Pelosi (D-CA) is continuing to negotiate with the administration through Treasury Secretary Steve Mnuchin. This afternoon, Senate Majority Leader McConnell (R-KY) said that the Senate will forgo its planned recess next week and remain in session as talks continue.

In the meantime, the Capitol complex will begin limiting public access at 5:00 PM today through at least April 1. It remains open to members of Congress, staff, and visitors on official business, though an increasing number of lawmakers are opting to close their offices.

This week, the Senate resumed consideration of S. 2657, a bipartisan package of comprehensive energy legislation known as the American Energy Innovation Act (AEIA), though progress stalled around a controversial amendment related to hydrofluorocarbons (HFCs). The Senate also passed S. 1822, the Broadband Deployment Accuracy and Technological Availability (DATA) Act, which passed the House last week and now goes to the President for his signature. For more on the DATA Act, click here.

House Speaker Nancy Pelosi (D-CA) and Minority Leader Kevin McCarthy (R-CA) struck a deal on Tuesday to reauthorize three Foreign Intelligence Surveillance Act (FISA) provisions that are set to expire on March 15. The House passed the legislation on Wednesday 278-136. It is unclear when the Senate will take up the measure with the President suggesting this morning that “many Republican Senators” want him to veto it.

On Tuesday, the House Energy and Commerce Subcommittee on Communications and Technology marked up a series of bills on spectrum and communications, including H.R. 451, the Don’t Break Up the T-Band Act and H.R. 4855, the Clearing Broad Airwaves for New Deployment (C-BAND) Act.

The President has named Rep. Mark Meadows (R-NC) as his new Chief of Staff, replacing Acting Chief of Staff Mick Mulvaney. Meadows, who recently interacted with an individual infected with coronavirus, has self-quarantined through next week. Several other members of Congress who attended the same event at which the interaction took place have taken similar steps. Meanwhile, Trump attended Tuesday’s Senate Republican weekly lunch to encourage Congress to consider relief, such as tax breaks, for industries and individuals impacted by coronavirus. Vice President Mike Pence, who is leading the administration’s coronavirus task force, met with healthcare industry leaders on Wednesday to discuss the response to the outbreak. See below for more details on White House coordination with the technology sector.

Deputy Attorney General Jeff Rosen said during comments at a Free State Foundation event on Tuesday that “Some platforms treat [Section 230 of the Communications Decency Act] as a blank check,” adding that “perhaps there needs to be a more clear definition of both the good faith and for the vague term, ‘otherwise objectionable.’” Rosen’s comments preceded a Senate Judiciary Committee hearing on new legislation targeting Section 230 (see below for more).

On Wednesday, the British government confirmed plans to begin implementing a new digital services tax on tech companies of 2 percent on April 1.  The government said it would not postpone the tax while waiting for the Organization for Economic Cooperation and Development (OECD) to broker a more comprehensive deal.

Looking Ahead

The House and Senate are scheduled to be in recess next week. While there have been rumors that Congress will extend its recess amid the coronavirus outbreak, leadership maintains that lawmakers will return to Washington the week of March 23 as planned.

Senate Antitrust Subcommittee Convenes Hearing on Self-Preferencing

On Tuesday, the Senate Judiciary Subcommittee on Antitrust convened a hearing on competition in digital technology markets focused on self-preferencing. The panel of witnesses included academics and industry stakeholders who offered a range of opinions on competition online. Antitrust regulations and enforcement dominated the discussion, with some lawmakers and witnesses alike advocating for stronger enforcement of the Sherman Act and other antitrust laws. In addition, panelists and Subcommittee members expressed concerns about specific online platforms’ activities and the resulting impact on competition, data privacy, and the app economy.

Subcommittee Ranking Member Amy Klobuchar (D-MN) announced in her opening remarks that she and Senators Richard Blumenthal (D-CT) and Cory Booker (D-NJ) introduced the Anticompetitive Exclusionary Conduct Prevention Act. The legislation would amend the Clayton Act to prohibit “exclusionary conduct” that presents an “appreciable risk of harming competition” and shifts burden to companies to prove their conduct does not present an “appreciable risk of harming competition.”

During the hearing, Senator Josh Hawley (R-MO), a frequent critic of large technology companies, likened personal data to property, arguing that users should have complete control over where it goes, and criticized the industry’s biggest players for undercutting competition. He also called on Congress to grant the Federal Trade Commission (FTC) additional antitrust enforcement power.

Senate Judiciary Holds Hearing on EARN IT Act

On Wednesday, the Senate Judiciary Committee held a hearing to discuss the EARN IT Act. Introduced by Sens. Graham (R-SC) and Blumenthal (D-CT) and cosponsored by nine other Senators, the bill would revoke companies’ Section 230 immunity related to child sexual abuse if they do not adopt a set of best practices set by a commission of government officials, academics, activists, and industry stakeholders and enacted into law by Congress.

During the hearing, most Senators expressed interest in reforming Section 230, with some even appearing sympathetic to repealing it in its entirety. In addition, Senators and panelists engaged in discussions on encryption, the Fourth Amendment, and law enforcement. On encryption, Senators defended the legislation, saying it would not impact end-to-end encryption despite critics’ claims. A lawyer from the Internet Association, which represents many of the technology industry’s largest companies, raised concerns regarding the Fourth Amendment implications of this bill. She said that if the bill is enacted, defendants may be able to claim that companies are operating as state actors when they turn over private messages to authorities. Therefore, their use in a court of law would constitute an warrantless and thus illegal search. Sen. Blumenthal called this argument “preposterous.” Finally, in regard to law enforcement, panelists and Senators alike expressed concern that law enforcement agencies are underfunded and unprepared to address child sexual exploitation material online. Thus, many advocated providing additional resources to local and federal law enforcement.

White House Meets with Tech Companies to Discuss Coronavirus Response

On Wednesday, officials from the White House and various federal agencies met with leading technology company representatives to discuss ways to partner together to fight the spread of coronavirus, which the World Health Organization (WHO) has deemed a pandemic. Several company representatives joined remotely. Indeed, the role of technology in telework, telehealth, and online learning was a topic of conversation as representatives discussed ever growing challenges in relation to quarantines and school and office closures. The attendees also discussed how tech companies can coordinate with the government to thwart the spread of misinformation and disseminate accurate facts to the general public, as well as how artificial intelligence can aid medical researchers in reviewing research publications for scientific insights about the spread of the virus. In a statement, U.S. Chief Technology Officer Michael Kratsios, who hosted the meeting, said, “Cutting edge technology companies and major online platforms will play a critical role in this all-hands-on-deck effort.”

In the meantime, more major events have been cancelled nationwide in the face of the outbreak. The National Association of Broadcasters (NAB) cancelled its annual conference in Las Vegas during which senior officials such as Federal Communications Commission (FCC) Chairman Ajit Pai were set to speak.

Senate Commerce Committee Advances US SAFEWEB Reauthorization, Industries of the Future Act

The Senate Commerce, Science, and Transportation Committee held an executive session on Wednesday during which it advanced a number of pending bills, including legislation to reauthorize the Undertaking Spam, Spyware, and Fraud Enforcement with Enforcers beyond Borders (US SAFEWEB) Act and the Industries of the Future Act. The SAFE WEB Act provides the FTC with tools to work across borders in coordination with international partners to protect consumers against spam, spyware, and internet fraud and deception. Its current provisions are set to expire in September 2020. The House passed legislation in December to extend the program through 2027.

The Industries of the Future Act is bipartisan legislation aimed at bolstering US leadership across a range of developing technologies, including artificial intelligence, advanced manufacturing, and next generation wireless, among others. Specifically, the bill would initiate a report on federal research and development programs focused on these industries, require the administration to develop separate plans to double investment in and to increase civilian spending in these industries, and establish a Coordination Council to focus resources on advancing these technologies.