Karl Herchenroeder

Sen. Jerry Moran, R-Kan., questioned whether a new privacy law should include “strong guardrails” to limit FTC rulemaking authority. Such limits might preserve certainty for consumers, Moran wrote small-business representatives in questions for the record related to a recent Senate Consumer Protection Subcommittee hearing (see 1903260068). Consumers would benefit from Congress “providing clear and measureable requirements in statutory text” while also including FTC rulemaking authority “to account for evolving technological developments,” he wrote. Is there value in including guardrails around rulemaking authority “to preserve the certainty to the consumers that we aim to protect?” Moran asked witnesses. Moran also asked for “resource-based recommendations … to ensure that the FTC has the appropriations it needs to execute its current enforcement mission.” As a Senate Appropriations Subcommittee member, Moran said he wants to understand resource needs better before “providing additional authorities.” Moran also asked about defining entities that small businesses share data with. Small businesses share information with third parties that provide “essential business services, like credit card processing,” he said, asking if there should be a distinction between service providers and other third parties.

A patchwork of 50 conflicting state privacy laws would be “unworkable” for industry, said FTC Commissioner Christine Wilson Wednesday, a day after meeting with industry groups. Speaking at an American Enterprise Institute event, Wilson said she met with a room “full of large companies” Tuesday. She declined to name the companies when asked on the sidelines at Wednesday’s event.

A proposal from Sen. Amy Klobuchar, D-Minn., to tax the tech industry on data collection is a political move that’s not realistically enforceable, said politically conservative and libertarian tech observers Tuesday. During an American Action Forum event, R Street Institute Fellow Caleb Watney called it an effort to seize political momentum, rather than an attempt to solve real issues.

Democrat and Republican staffs are in informal discussions about privacy legislation, House Consumer Protection Subcommittee Chair Jan Schakowsky, D-Ill., told us. That signals the committee’s bipartisan legislative discussion isn't as advanced as its Senate counterpart. “We’ve been meeting about it. We fully intend to talk to them in the hopes of getting something bipartisan, but we’re not there yet,” she told us. Schakowsky is the Democratic lead on the committee’s privacy effort.

The U.S. might need legislation to combat the influx of frivolous Chinese trademark applications, Patent and Trademark Office Director Andrei Iancu told the Senate Intellectual Property Subcommittee Wednesday. Chinese trademark applications have increased 1,100 percent cumulatively in the past six years, he said. Iancu noted at the hearing, however, that Chinese applications have decreased to start 2019, possibly because of increased scrutiny.

Data privacy issues can’t be fully addressed using antitrust tools, Sens. John Kennedy, R-La., and Richard Blumenthal, D-Conn., told us separately. The Senate Judiciary Committee will discuss the intersection of antitrust and privacy policies Tuesday, with Google, Intel and Mapbox among those invited to testify (see 1903070072). Intel confirmed Friday that Global Privacy Director David Hoffman will testify.

Removing liability protections from Section 230 of the Communications Decency Act results in heavier content moderation, evidenced by impacts of a new anti-sex trafficking law (see 1806290044), Facebook Public Policy Manager Lori Moylan said at the Cato Institute Friday. Moylan said it’s likely some Conservative Political Action Conference attendees might argue that without Section 230 protections, Facebook “would no longer accidentally take down any conservative political speech,” which is “simply not true.”

Owners of musical.ly, a video social networking app now called TikTok, reached a record $5.7 million settlement with the FTC over claims the company illegally collected children’s personal data, the agency announced Wednesday. It’s the largest civil penalty the FTC, whose members unanimously approved, has collected under the Children’s Online Privacy Protection Act. Musical.ly failed to seek parental consent for collecting names, email addresses and other data from users younger than 13, the FTC alleged in a complaint filed by DOJ. “We take enforcement of COPPA very seriously, and we will not tolerate companies that flagrantly ignore the law,” Chairman Joe Simons said in a statement. “These practices reflected the company’s willingness to pursue growth even at the expense of endangering children,” said Commissioners Rohit Chopra and Rebecca Kelly Slaughter. They said executives should face more accountability in future cases. The company has implemented changes that now direct TikTok users into “age-appropriate” app sections, it said: “The new environment for younger users does not permit the sharing of personal information, and it puts extensive limitations on content and user interaction.” Sen. Ed Markey, D-Mass., urged future “higher monetary penalties that will actually [incentivize] COPPA compliance.” More than 200 million worldwide users, 65 million registered in the U.S., downloaded the app. Accounts were publicly available by default, the FTC said, and public reports show adults contacted children through the app. The app includes a feature that lets users discover other users within a 50-mile radius. App operators received thousands of complaints from parents that their underage children had accounts, the FTC said. “This case should put tech companies on notice that continued disregard for COPPA will result in penalties and consumer mistrust that can seriously impact their business,” said Common Sense Media CEO Jim Steyer.

Regulators and policymakers should find ways to maximize international data flow through legislation and trade deals that recognize the public’s right to data privacy, Apple, IBM and BSA|The Software Alliance representatives said Thursday. It’s not about reducing data privacy enforcement, said Apple Global Trade and International Affairs chief Lisa Pearlman, moderating a Washington International Trade Association panel. Finding balance between restricting and enabling data transfers is “one of the biggest challenges,” she said. IBM Market Access and Trade Director Steve Stewart said the more stringent data localization requirements, the less businesses can operate and compete. He noted two-thirds of IBM’s revenue comes from outside the U.S. It’s critical to get cross border data flow rules correct, said BSA Policy Director Joseph Whitlock. He claimed 98 percent of all international data ever gathered was created in the past two or three years. China is the most significant threat to international data flows, C&M International CEO Robert Holleyman said. In China, domestic companies have a clear advantage over international competitors because of data localization standards, he said. Artificial intelligence will have broad, economywide impacts on trade, said Brookings Institution Global Economy and Development Senior Fellow Joshua Meltzer. Large data sets are necessary to improve AI accuracy, he said.

President Donald Trump signed an executive order Monday directing federal agencies to “prioritize investments” in artificial intelligence R&D. The American Artificial Intelligence Initiative promotes long-term research, access to federal data, novel AI applications and AI skills training for the federal workforce.