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Historic Facebook Settlement Criticized for Ineffectiveness; FTC Calls For Federal Privacy Law



WASHINGTON, July 24, 2019 — The Federal Trade Commission announced on Wednesday details of its $5 billion settlement with Facebook over privacy violations such as the Cambridge Analytica scandal. In addition to the fine, the company will have to provide quarterly compliance reports and form an independent privacy oversight committee.

FTC Chairman Joe Simons celebrated the “record-breaking penalty,” claiming that it was “all the more remarkable given the FTC’s limited authority.”

However, many believe that the record-breaking fine was not punishment enough, including Democratic Commissioners Rebecca Slaughter and Rohit Chopra, who both dissented.

“I understand the majority’s argument in favor of the terms of the settlement, and I recognize the settlement’s historic nature,” said Slaughter in her dissent. “But I do not share my colleagues’ confidence that the order or the monetary penalty will effectively deter Facebook from engaging in future law violations, and thus I fear it leaves the American public vulnerable.”

“Facebook is getting away with some of the most egregious corporate bad behavior in the age of the internet,” said Sen. Ed Markey, D-Mass. “This settlement is a partisan abdication of the FTC’s duty. The only market-wide message the Commission is sending is that it is acceptable for online giants to beg for forgiveness afterward rather than get permission first.”

Critics of the decision claimed that Facebook is unlikely to change its current course of action under the terms laid out in the settlement. These terms “fail to address the business model that incentivizes the invasive and manipulative practices the company was fined for,” said Free Press Policy Counsel Gaurav Laroia.

“Under this settlement, Facebook does not have to meaningfully change how it collects and uses your data,” said Charlotte Slaiman, competition policy counsel at Public Knowledge. “Facebook retains complete control over when to share your data outside of Facebook, as long as the company complies with the privacy policy that it gets to write.”

Chopra agreed, writing that “the order allows Facebook to decide for itself how much information it can harvest from users and what it can do with that information, as long as it creates a paper trail.”

The agency lacks the authority to implement new privacy legislation, replied Simons at a press conference on Wednesday, and so all the agency could do was to force Facebook to be transparent. Choosing to litigate the case would have resulted in “much less relief, much later,” he said.

Republican Commissioner Christine Wilson added that the documentation being required of Facebook is goes far beyond a paper trail, requiring the company to do an in-depth analysis of privacy concerns—and force CEO Mark Zuckerberg to take responsibility.

Although most critics felt that the $5 billion fine was too small for the tech giant, others warned that the historic fee set a dangerous precedent.

While Facebook can easily afford this settlement, few other tech platforms would be able to, said TechFreedom President Berin Szóka in a statement.

“Nothing could do more to discourage competition with today’s tech giants than the looming threat of such massive fines,” he said. “Those cheering today’s settlement as a victory against Big Tech should think twice about its long-term effects on those trying to dethrone Facebook.”

Szóka also criticized the way in which the fine was implemented, calling it a “legal sleight of hand.” Since the FTC act limits penalties for new charges, the agency was only able to impose a monetary penalty on Facebook by charging the company with the violation of an unrelated 2012 privacy consent decree.

Both proponents and opponents of the settlement agreed on the overwhelming need for Congress to pass privacy legislation.

The limits of the FTC’s authority make “carefully crafted, comprehensive federal privacy legislation” essential, said Wilson, emphasizing the agency’s bipartisan interest in such action.

“Without corrective action, the business of behavioral advertising is bound to harm our social, political and private lives again and again,” said Laroia. “It’s now up to Congress to pass legislation to protect our privacy, our democracy and our civil rights.

If Congress passes privacy legislation, the FTC is prepared to enforce it, said Simons, adding that the agency is using its existing authority “to very effective ends.”

(Photo of FTC Press Conference 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.


House Democrats Fight Against Anti-Crypto Measures in Senate-Passed Infrastructure Bill



Rep. Anna Eshoo, D-Calif.

August 20, 2021 – Pro-crypto House Democrats pushed back against the Senate Infrastructure Investment and Jobs Act’s inclusion of crypto regulatory language, seeking to make it less broad.

The additions of cryptocurrency taxes aim to generate revenue to pay for part of the infrastructure spending. Its authors intended to reduce fraud in reports to the IRS.

Democratic California Reps. Ro Khanna, Eric Swalwell, and Anna Eshoo joined cryptocurrency enthusiasts Rep. Bill Foster, D-Illinois, and Rep. Darren Soto, D-Fla., in urging to amend the infrastructure bill in the House.

In a letter released on August 12, Eshoo advocated to Pelosi that the House should “amend the problematic broker definition,” describing the existing language as “imposing unworkable regulations.”

But there is some feeling that amendments to the bill in the House may not be necessary. According to a Treasury Department official, the agency plans to clarify its definition of a “broker” to be more specific.

Any amendments to the House would force the infrastructure measure back to the Senate.

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Digital Inclusion

Senators Reintroduce Bipartisan Digital Equity Act

Sen. Murray re-introduces bi-partisan that would provide grants to states pushing for digital equity.



Patty Murray, D-Washington

June 14, 2021– Three Senators have introduced legislation that would provide grants to states that create digital equity plans.

The proposed legislation, reintroduced on Thursday by Patty Murray, D-Washington, Rob Portman, R-Ohio, and Angus King, I-Maine, would set-aside $60 million to establish a State Digital Equity Capacity Grant within the Department of Commerce that would “promote the achievement of digital equity, support digital inclusion activities, and build capacity for efforts by States relating to the adoption of broadband by residents of those States.”

The funds from the Digital Equity Act in the Senate would be made available to all states, foundations, corporations, institutions, or agencies. The bill was first introduced by Murray in 2019.

Each state will receive a different grant amount depending on a formula that includes population and access to broadband across the state, to be spent within 5 years of receipt.

In addition to funding for states, the bill creates a  $125-million Digital Equity Competitive Grant Program. This program is also for state agencies and institutions but is more specifically geared toward those that are responsible for “adult education and literacy activities.”

Infrastructure portion

A final pillar of the bill is to create more infrastructure and resources for future development of policies that will continue to promote a bridging of the digital divide.

During a press conference on the bill, Murray told the Broadband Breakfast that she believes the bill will be successful because it gives states and local communities the ability to decide what their needs are. “We cannot dictate that in D.C.,” she remarked.

When asked why the bill will create more permanent solutions, she stated that it, “Provides for the diversity of needs that are going to continue to be out there.”

The senators co-sponsoring the bill said they are confident it will make its way into any infrastructure legislation passed by Congress.

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Senate Committee Hears High Symmetrical Internet Speeds, Up-To-Date Technologies For Future Of Rural America

NTCA’s Shirley Bloomfield on driving improvements for rural broadband.



Shirley Bloomfield

May 19, 2021– The head of the NTCA — Rural Broadband Association told a Senate Finance Committee that there are a number of improvements that can be made to broadband services and infrastructure for rural Americans, including higher symmetrical internet speeds, up-to-date network technologies, and better coordination of government funding to avoid overbuilding.

Shirley Bloomfield provided six different types of actions at Tuesday’s hearing that the government should take to improve broadband coverage in rural markets.

Bloomfield’s first suggestion was to build networks to last. She argued that building networks that provide insufficient speeds or utilize technology that is already outdated will not be sufficient to address the broadband needs of the future generation. During her testimony, Bloomfield specifically voiced support for 100 Mbps symmetrical service.

“We have a once in a generation opportunity—on the investment side—to do this right—to aim higher and to do better,” she said.

Her second suggestion was to take steps to limit overbuilding. To do this, she suggested that state and local governments coordinate with existing programs that provide mapping and funding for broadband projects. She clarified during her testimony that those without broadband service need to be prioritized before those with insufficient broadband service. She argued that the best way to do this would be ensuring that there is coordination with federal and state regulatory bodies with access to mapping data.

Bloomfield’s third suggestion was that network maintenance must be prioritized, and that modern networks will only stay modern and efficient if they are kept working and up to date.

Bloomfield also recommended clearer standards for broadband providers and that un(der)served rural communities should not be treated as “test labs” for new technologies. She stated that technologies should not be deployed until they have been sufficiently tested and established as viable strategies to serve communities in need of broadband. This includes not just the current needs of the communities in question, but also the projected needs of future generations.

Her sixth recommendation was to encourage consumers to look for local ISPs to provide broadband service. She noted that these smaller, local ISPs have cultivated relationships with the communities they serve, and those who work for the ISP often live among those they serve. She stated that it is this intimate connection that has allowed them to navigate the unique issues that these rural communities face.

Finally, Bloomfield encouraged the Committee to push for lower barriers to entry for broadband expansion projects, stating that bureaucracy and costs associated with many projects are simply too high. She also stated that a concerted effort must be made to sure-up supply chain issues that are currently applying significant pressure to ISPs and hampering expansion.

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