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FTC

Big Tech and FTC Under Attack at Senate Hearing

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WASHINGTON, July 9, 2019 — YouTube has been “inadequate and abysmally slow in responding” to recent allegations that its algorithms promote child sexualization, said Sen. Richard Blumenthal, D-Conn., at a Senate Judiciary Committee hearing on Tuesday.

If big tech companies don’t take sufficient steps to protect children from exploitation on their platforms, they should be stripped of their protections under Section 230 of the Communications Decency Act, allowing parents and others to sue them, said Sen. Lindsey Graham, R-SC.

Using Section 230 protections as leverage is the “most effective” way of creating prompt change, Graham claimed. Blumenthal agreed, arguing that the uniquely broad immunity given to big tech platforms is part of the reason that they are failing to do more to protect children.

The root of the problem is that companies are prioritizing ad revenue over child safety, said Sen. Josh Hawley, R-Missouri. YouTube has the ability to stop automatically recommending videos featuring children but chooses not to because three quarters of the platform’s traffic comes from the autoplay feature.

The Federal Trade Commission also came under fire at the hearing for failing to enforce the Children’s Online Privacy Protection Act. The FTC can and should take action to protect children by using its authority, under Section Five of the Clayton Act, to hold platforms responsible for the services that they are marketing to children as well as the services that are marketed towards adults but being used by children anyways, said Georgetown Law Professor Angela Campbell.

Platforms such as YouTube fall into the latter category; although Google’s Terms of Service require users to be at least 13 years old, the company clearly knows that younger children are using the platform, but has failed to address this concern, according to Campbell.

Even with increased enforcement, COPPA regulations are inadequate at protecting children because of rapid technological developments and because the safeguards do not apply to children past the age of 13.

In response to questioning from Sen. Blumenthal, all witnesses at the hearing supported updating COPPA regulations to be modeled after the California Consumer Privacy Act, which expands protections to minors up to the age of 16.

The internet is a place of both “wonderful potential and troubling and pervasive darkness,” said Christopher McKenna, founder of internet safety company Protect Young Eyes. To help parents discern between the good and the bad, there is a need for a uniform, independent, and accountable rating system for apps, similar to the system used for video games.

It’s impossible to make the internet a completely safe place for children, so the focus should be on moving from “protection to empowerment, blocking to monitoring, and restrictions to responsibility,” said Stephen Balkam, CEO of the Family Online Safety Institute.

Balkam highlighted the importance of engaging “all parts of the technology ecosystem,” with the government providing oversight and parents and teachers receiving technological training so that they can confidently navigate the online world alongside children.

“Most importantly,” Balkam said, “children must be taught to be good digital citizens.” This includes knowing the consequences of sharing personal information and having the moral and technical tools to deal with the inappropriate material they will “inevitably” encounter—both online and offline.

(Photo of Sen. Blumenthal by Emily McPhie.)

Development Associate Emily McPhie studied communication design and writing at Washington University in St. Louis, where she was a managing editor for campus publication Student Life. She is a founding board member of Code Open Sesame, an organization that teaches computer skills to underprivileged children in six cities across Southern California.

FTC

Biden Looks to Bedoya to Replace Rohit Chopra on FTC, Report Says

Staunch privacy advocate Alvaro Bedoya appears to be Joe Biden’s pick for the FTC, Axios reports.

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Staunch privacy advocate Alvaro Bedoya appears to be Joe Biden's pick for the FTC

WASHINGTON, September 13, 2021—President Joe Biden is expected to bring on privacy stalwart Alvaro Bedoya for the open seat on the Federal Trade Commission, according to reporting from Axios.

Born in Peru and raised in New York, Bedoya attended Harvard University where he received his B.A. in Social Studies. He also holds a J.D. from Yale.

A longtime supporter of consumer privacy rights, Bedoya is the founding director of the Center on Privacy and Technology at Georgetown Law. Previously, he served as chief counsel of the Senate Judiciary Subcommittee on Privacy, Technology, and the Law. While working in the Senate, much of his work centered on location and biometric privacy with regard to consumer protections.

As it stands now, there are three Democrats and two Republicans on the commission. In January of 2021, Biden tapped Rohit Chopra to serve as the Director of the Consumer Protection Bureau. Though Chopra’s term on the FTC expired in 2019, the commission allows incumbent members to sit until a replacement is appointed—in this case, Bedoya.

The Washington Post quoted Republican FTC commissioner Noah Phillips speaking fondly of Bedoya. “I don’t think of him as a person who just gets up and rants about entities he doesn’t like,” and described him as “without fail as bright and thoughtful a person as you could find.”

Phillips has been broadly critical of the direction he feels the FTC is going and has historically criticized political firebrands on both sides of the aisle.

As Big Tech faces mounting criticism from both Republicans and Democrats with regard to privacy, misinformation, and alleged censorship, Bedoya will be entering a tumultuous era for the FTC.

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Antitrust

FTC Commissioner Phillips Warns About Shifting Direction of Agency

Noah Phillips voiced concern about the scope and practices of the Biden administration’s FTC.

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FTC Commissioner Noah Phillips

WASHINGTON, September 2, 2021 — Federal Trade Commissioner Noah Phillips said at a Hudson Institute webinar on Monday that he’s concerned about the direction the competition watchdog is moving toward considering recent events.

Phillips said the left-leaning voices in Washington and the appointment of Lina Khan to chair the agency has left him wondering about the legacy of the last 40 years of competition regulation in America – which have been hallmarked by the Hart-Scott-Rodino Antitrust Improvements Act of 1976. That legislation effectively gave the FTC the ability to review mergers and acquisitions before they were finalized, rather than afterward, which governed pre-legislation.

Under Biden-appointee Lina Khan, Phillips described how the FTC has done away with the process of early termination. In the past, this process made it unnecessary for every single company to provide advanced notice and advanced approval for mergers. “Historically, parties have been able to come to the agencies and say, ‘You’re not interested in this, can we just go ahead and finish our deal,’ and the agencies have said ‘yes.’”

He said this is no longer the case, and that every single merger must provide advanced notice and approval. “What we’re introducing is an inefficiency in the market for transactions that we have no interest in pursuing, just for the sake of it. I think that’s a problem,” he continued. “My concern is that it is making merger enforcement less effective, less efficient, and less fair.”

Phillips pointed to left-of-center and leftist voices in Congress, such as Rep. David Cicilline, D-New York, Sen. Elizabeth Warren, D-Massachusetts, and Rep. Alexandria Ocasio-Cortez, D-New York, who, at the outset of the pandemic, wanted to ban all acquisitions and mergers—regardless of their merit. He described this view as falling outside of mainstream perspectives, but noteworthy nonetheless.

“I don’t think that is what most people believe,” Phillips remarked. “I don’t think that is what Hart-Scott-Rodino envisions.”

This webinar took place only a couple of weeks after Phillips spoke at the Technology Policy Institute’s 2021 Aspen Forum, where he voiced similar concerns, stating that he feared that this new direction would make it more difficult for the FTC to hear cases that it should, and defended the commission’s record against critics who said it was lax under the Trump Administration.

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Antitrust

Experts Say Congress’s New Antitrust Package is Philosophically Flawed and Politically Motivated

Antitrust and technology experts say that Congress’s new antitrust package is legally flawed and politically motivated.

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Pool photo of Lina Khan from April 2021 by Graeme Jennings

June 18, 2021—The package of five new antitrust bills introduced last Friday would “radically change how firms compete,” said a critic close to the technology industry.

The comments, by Aurelien Portuese, director of antitrust and innovation policy at the Information Technology and Innovation Foundation in an interview with Broadband Breakfast, represent a sharp critiques of the bills by legal experts and tech industry executives.

The bills would not achieve their stated goals, Portuese said. He says that they would stifle competition and lead to less, not more innovation.

Portuese said that, because the bills target companies above a certain market cap and would only apply to those companies, they would lead to “a two-level playing field” in which the laws would apply to certain companies and not to others.

“These bills allow practices for some companies while prohibiting the very same practices to their rivals, and conversely, would prohibit some practices to some companies while allowing them for rivals.”

Because the measures were drafted to target a specific companies such as Apple, Amazon, Facebook and Google, they were a form of “overt discrimination.”

Apple will be regulated by the new laws, but their competitor in the music streaming industry, Spotify, will not. This would give Spotify a competitive advantage over Apple.

Antitrust law should be used to foster innovation

Antitrust policy should be employed to foster as much innovation as possible, and not simply break up large firms into smaller ones, said David Teece, executive chairman of the Berkeley Research Group, to an online panel hosted by ITIF.

For his part, Portuese said that antitrust law is a “question of leadership, not of law.” Currently, there are three active legal cases employing antitrust philosophy involving Google, Facebook, and Apple, all of which, he said, are being prosecuted under the current antitrust law.

These current antitrust tools are sufficient, he said, and the lack of antitrust actions taken by past administrations is a problem of enforcement, and not the legal framework itself.

Lina Khan, a longstanding critic of Big Tech, was appointed chairwomen of the FTC on Tuesday. As chairwoman, she will have considerable leeway in directing how and what the FTC regulates. That could mean a major shift in the commission’s enforcement on antitrust.

Portuese also made the point that tech innovation requires large capital expenditures. By specifically targeting the U.S.’s top firms and breaking them up, the overall amount of innovation that occurs in the technology industry will diminished, he said.

Enforcement for political gain

Samuel Palmisano, the former CEO of technology company IBM, said that he sees the new antitrust legislative proposals as less about competition policy and more about politics.

“We see both the right and the left wanting to break up media and social platforms because they don’t like what’s being published, or not published,” Palmisano said at the ITIF event. “There can be a legitimate debate about media fairness or Section 230, but antitrust isn’t the tool for that debate.”

Editor’s Note: A previous version of this story incorrectly spelled the last name of Federal Trade Commission Chair Lina Khan, as “Kahn.” The story has been corrected, and Broadband Breakfast apologizes for the error.

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