Karl Herchenroeder

U.S. officials sent the European Commission an initial offer to replace the Privacy Shield and address concerns in the Schrems II decision, industry officials and advocates told us (see 2103250023). An initial U.S. offer was sent a few weeks ago, but it “wasn’t as strong" as the European Commission hoped, said Gabriela Zanfir-Fortuna, a former adviser to the European Data Protection Supervisor in Brussels. Now senior counsel at the Future of Privacy Forum, Zanfir-Fortuna advised in the development of the first Privacy Shield agreement and the general data protection regulation.

Google copying Oracle’s Java code for Android was fair use, the Supreme Court ruled 6-2 Monday, with Justices Clarence Thomas and Samuel Alito dissenting (see 2010290055). Justice Amy Coney Barrett didn’t participate.

The FTC's deciding not to seek Supreme Court review of its antitrust case against Qualcomm (see 2103300003) leaves standard-essential patent (SEP) and competition issues on the table, tech officials said in interviews following last week's decision. A Qualcomm proponent argued the FTC knew it had a weak case and wanted to avoid setting bad precedent before the high court.

The Senate Commerce Committee plans a confirmation hearing in April for FTC nominee Lina Khan, Chair Maria Cantwell, D-Wash., told us, calling Khan a “strong nomination.” Meanwhile, Commissioner Christine Wilson and former FTC officials credited acting Chairwoman Rebecca Kelly Slaughter for forming a new rulemaking group within the General Counsel’s Office (see 2103250056).

The FTC created a rulemaking group within the General Counsel’s Office with the goal of strengthening existing rules and creating “new rulemakings to prohibit unfair or deceptive practices and unfair methods of competition,” acting Chair Rebecca Kelly Slaughter announced Thursday. Rulemaking is “a critical part of the FTC’s toolbox to stop widespread consumer harm and to promote robust competition,” especially given threats to the agency’s FTC Act section 13(b) authority (see 2102040049), the agency said. The FTC’s “rulemaking power under section 18 has gotten a bad reputation for being too hard to use, but longstanding FTC rules, such as the Funeral Rule and the Eyeglass Rule, have provided significant benefits to consumers,” Slaughter said. The agency should “activate its unfair methods of competition rulemaking authority” due to the concentrated economy, she added. The commission wouldn't disclose now the names of those who comprise this group. The panel “will streamline rulemaking at the FTC, resulting in rules that are faster, more efficient, and more effectively address anticompetitive conduct than antitrust litigation alone,” said Public Knowledge Competition Policy Director Charlotte Slaiman, saying it's "a much-needed change.” Consumer Reports thinks this “sends a clear message that the FTC is going to prioritize rulemaking going forward, which we hope will lead to stronger consumer protections and greater corporate accountability,” said Senior Researcher-Technology Competition Sumit Sharma.

Facebook, Google and Twitter support Communications Decency Act Section 230 proposals to increase content moderation transparency, their respective CEOs, Mark Zuckerberg, Sundar Pichai and Jack Dorsey, told House Commerce Committee members Thursday during a virtual hearing. Noting Zuckerberg’s support for “thoughtful changes” to 230 (see 2103240076), Communications Subcommittee ranking member Bob Latta, R-Ohio, asked the Facebook chief for specific proposals. Zuckerberg supported two specific changes, saying Congress should be careful about removing protections for smaller companies.

Rep. Jan Schakowsky, D-Ill., will introduce legislation, potentially this week, to amend Communications Decency Act Section 230 liability protections, giving consumers the ability to sue when harmed by illegal online content, she said Monday (see 2009240062). Her Online Consumer Protection Act will be part of the discussion when Facebook CEO Mark Zuckerberg, Google CEO Sundar Pichai and Twitter CEO Jack Dorsey testify Thursday before House Commerce Committee members (see 2103190054), said Schakowsky during an event hosted by Common Sense Media and the Real Facebook Oversight Board.

The FTC needs to review past agency antitrust analysis to determine where tools have been misused and what predictions have been incorrect, acting Chair Rebecca Kelly Slaughter told the House Antitrust Subcommittee Thursday. She responded to Chairman David Cicilline, D-R.I., and ranking member Ken Buck, R-Colo. Those lawmakers' opening remarks questioned FTC's reported reluctance in 2013 to pursue an antitrust lawsuit against Google, despite a recommendation from agency investigators.

U.S. government cyber coordination “has never been stronger,” Department of Homeland Security Cybersecurity and Infrastructure Security Agency (CISA) acting Director Brandon Wales told the Senate Homeland Security Committee during a hearing Thursday on the SolarWinds hack (see 2103040066). Ranking member Rob Portman, R-Ohio, expressed skepticism, noting the “most massive attack” in U.S. history went undetected for more than a year before the private sector, not government, discovered it. If everyone's in charge, no one is, said Portman, citing cyber leaders at CISA, the FBI, OMB Federal Chief Information Security Officer Chris DeRusha and a cyber director position soon to be installed in the White House. Everyone has a key role, and we “work quite well together,” said DeRusha. Portman noted that CISA’s Einstein program, which is supposed to detect and block cyberattacks against the federal government, has cost about $6 billion. “Clearly, it was not effective in stopping the SolarWinds breach or even recognizing that it occurred,” he said: Einstein expires at the end of next year, so “it’s a good time to consider its utility and how it can be improved.” Part of the challenge is that you can only “secure what you can see,” said Wales. Adversaries move quickly from server to server, and their attacks are designed to stop the U.S. from knowing where they’re coming from, he said: Traditional systems aren’t working, so the U.S. needs to deploy new types. The FBI is working to understand who did this activity and why, while coordinating with CISA, said the FBI Cyber Division's Tonya Ugoretz. The agency will deliver an after-action report to Congress, she said. The process for responding to cyberattacks “desperately needs to be modernized,” including improvements to the Federal Information Security Modernization Act, which hasn’t been updated since the creation of CISA, said committee Chairman Gary Peters, D-Mich. Stakeholders need a centralized, transparent and streamlined process for sharing information, he said.

Senate Minority Whip John Thune, R-S.D., and Sen. Brian Schatz, D-Hawaii, reintroduced legislation Wednesday that would amend Communications Decency Act Section 230 and require online platforms to remove illegal content within days, as expected (see 2102030060). Under the Platform Accountability and Consumer Transparency (Pact) Act, platforms would need a “defined complaint system that processes reports and notifies users of moderation decisions within twenty-one days, and allows consumers to appeal.” The bill would make platforms “more accountable for their content moderation policies and providing more tools to protect consumers,” said Schatz. Thune called it a “common-sense legislative approach to preserve user-generated content and free speech on the internet, while increasing consumer transparency and the accountability of big internet platforms.” Public Knowledge said it's “a serious, bipartisan effort to consider content-neutral requirements to provide greater transparency and accountability.” Access Now supports the requirements for platforms to have “content moderation policies, explain their moderation decisions, and have an appeal process.” BSA|The Software Alliance welcomed the effort and wants to “avoid unintended consequences and account for the broader universe of technology companies.” The serious proposal contains a “fatal flaw: by subjecting websites to federal civil liability, the bill is far more radical than it appears and would lead to legitimate speech being removed from the internet as websites take a better-safe-than-sorry approach,” said NetChoice Vice President Carl Szabo.