Archive – 2020
Federal Court Rejects Conservatives Claiming Free Speech Violated by Colluding Platforms
Report from Politico
In Brief – In the midst of the controversy over the political issue-based content moderation of the largest social media platforms kicked up by the decision of Twitter to place of “Get the facts” link to two tweets of President Trump, a collection of the largest digital platforms prevailed in federal court against charges of collusion and discrimination against conservative viewpoints. A three-judge panel of the D.C. Circuit Court of Appeals unanimously rejected the claims of conservative group Freedom Watch and political activist Laura Loomer that Google, Twitter, Facebook and Apple violated their 1st Amendment Rights by restricting their ability to communicate over the platforms, and violated anti-trust law by acting collectively to silence conservative activists. The judges ruled that the companies are private actors, not government actors, and therefore are not bound by the 1st Amendment. The judges also rejected the contention that the platforms engaged in coordinated action, citing a lack of evidence.
Context – While President Trump has signed his Executive Order directing the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) to pare back the digital platform liability provisions in Sec. 230 of the CDA, which provides platforms wide discretion to moderate user conduct, the drum roll of court decisions rejecting the contention that platforms can be sued for violating free speech, or do not have the right to moderate their platform, add up. (Here is a great summary of the long line of decisions, many recent.) The authority of the FTC or FCC to rewrite Sec. 230 is highly questionable, and legislatively paring the law it back to reduce the ability of platforms to moderate politically sensitive content is plagued by the fact that issue-by-issue, Republicans and Democrats consistently want the platforms to do the opposite things. When one charges too much ideological interference, the other sees far too little moderation of lies and distortions.
Facebook Rolling Out a Free Basics Digital Divide Service Addressing Net Neutrality Concerns
Report from Medianama
In Brief – Facebook has begun trialing in Peru a new program to provide no-cost, low bandwidth mobile data services to underserved communities in developing counties. Called Discover, and part of the Facebook Free Basics initiatives, the company says that the new service builds upon the feedback the company has received on earlier Free Basics projects, in particular charges that the services violated net neutrality by requiring web services to be certified by Facebook. While the new Discover service only supports low-bandwidth traffic, so video and audio content is not supported, the app treats all websites equally and has received support from some net neutrality advocates. In addition, Facebook reports that personal browsing history is not used for things like targeted ads or friend suggestions, and that they intend to expand product trials to countries including Thailand, the Philippines, and Iraq.
Context – Facebook has remained committed to efforts to expand online access to underserved communities around the world, in particular in developing countries that have proven to be important growth markets for key Facebook services such as WhatsApp, since Internet.org debuted in 2013. Where Google and the Wikimedia Foundation have pulled back from their major projects to provide zero-cost access to online services, Facebook has creatively pressed forward, even after suffering some major regulatory and public relations setbacks, such as the withdrawal of their zero-rating initiative in India in 2017. If you are interested in watching some truly entertaining pro-net neutrality videos from India, here is one targeting Facebook’s Free Basic and an earlier one providing some context on the net neutrality debate in India. They are very entertaining, at least if net neutrality advocacy and jokes at the expense of telecom companies does not get you steamed.
Twitter Breaks Ground Applying Fact Checking to Trump Tweets Attacking Vote-By-Mail
Report from the New York Times
In Brief – Twitter, having faced criticism for years that President Trump uses the platform to engage in personal attacks and spread false claims that violate the Twitter Terms of Service and generally would be sanctioned by the platform, but were permitted due to his political leadership position, took action against Trump tweets for the first time in the form of applying its “Get the facts” policy. In the tweets, the President charged that voting by mail was rife with potential for voter fraud, a view held by many conservatives. Twitter applied a “Get the facts” link to the tweets and linked to a page that included news analysis pieces claiming that fraud through mail-in voting was not a major problem. The President responded with vitriol, charging Twitter with suppressing free speech by conservatives and threatening to shut down social media platforms.
Context – Twitter’s action on the President’s vote-by-mail tweet, which the company indicated violated its guidelines regarding communications that could undermine election processes, is similar to the justification used by Facebook to block Republican ads judged to misrepresent the U.S. Census. Facebook did not take action on the vote-by-mail messages that Twitter responded to. And while Twitter took action on the vote-by-mail tweets, it did not take action against Trump tweets making accusations against media personality and former Congressman Joe Scarborough, which were widely criticized. Many conservative activists believe that the major platforms are not ideologically neutral, the White House hosted a forum on the charges last summer, and Attorney General Barr raises the issue regularly. Many progressives and Democrats are similarly critical of platforms for not sanctioning conservative communications they claim are false or threatening. Sen. Josh Hawley (R-MO) has sponsored legislation to require platforms to be politically neutral in content moderation, as judged by the FTC, or lose their Sec. 230 liability protection, a bill that has not yet gained any cosponsors.
European Commission Digital Gatekeeper Questions Prep for Digital Services Act
Report from Reuters
In Brief – As the European Commission prepares to draft a Digital Services Act to replace the E-Commerce Directive, which has provided the legal and regulatory foundation for online services on the continent for two decades, the Commission’s digital unit has prepared a 43-page questionnaire on issues including the nature and power of “gatekeepers”, platform liability for illegal or harmful content, “gig” economy workers and online advertising. Members of the public, digital companies and EU governments will be asked what they consider makes a company a digital gatekeeper, as well whether online platforms should be more proactive in removing harmful content. EU regulators are considering whether all online platforms, or only larger ones, should be subject to new take-down responsibilities, as well as the appropriate size metrics, such as the user base, volume of data holdings, financial turnover, market share or some combination.
Context – European Commission President Ursula von der Leyen has made the digital economy a key priority of her agenda. Von der Leyen and her top digital policy Commissioners, Margrethe Vestager and Thierry Breton, have described their digital policy principles as technology grounded in European values and working for people, a fair and competitive economy where companies of all sizes can compete on equal terms and a few powerful incumbents cannot block competition, consumers rights being respected, and profits being taxed where they are made. The Digital Services Act, which is widely expected to be a cornerstone of this effort, has been somewhat delayed by the COVID pandemic. While the content moderation responsibilities of the largest platforms to police hate speech and terrorism advocacy, such as the duties established in the recently enacted online hate speech law in France, is often a focus of the anticipated Digital Services Act, the E-Commerce Directive governs online commerce, and two decades of friction between platforms and major brands over issues including liability for counterfeits, selective distribution arrangements and online platform bans might be pulled into the debate.
Pandemic Re-energizes French Commitment to Implement Digital Taxes in 2020
Report from Reuters
In Brief – The French Minister of Finance and the Economy has indicated that France will proceed with its 3% Digital Services Tax (DST) on revenues of large digital companies in 2020 regardless of the status of negotiations to find consensus on a new global corporate tax regime. France has been a leader to change the taxation of global corporations that sell digital services, claiming that their ability to operate in low tax countries and sell services across borders denies countries appropriate corporate tax revenues. France enacted a national DST in 2019, drawing U.S. threats of aggressive tariff retaliation, and the countries agreed to stand down to allow multilateral tax negotiations at the Organization for Economic Cooperation and Development (OECD) to approve a plan by close of 2020. The French Government now argues that the fiscal impacts of the COVID pandemic, combined with the relative health of the digital companies, demands that the digital taxes go into effect in 2020.
Context – The global push for new digital taxes was firmly underway before the pandemic, but there was balance between countries threatening national taxes and U.S. tariff retaliation threats, in particular given the perception that the Trump Administration would fight trade wars. A cycle of digital tax and tariff threats being deferred as OECD talks proceeded emerged. That appears to be breaking down due to the pandemic slowdown. 1) Governments around the world face unprecedented budget shortfalls. 2) There is a sense that digital giants are weathering the crisis well, or even benefiting, so they have the means to pay and are not sharing in the collective suffering. 3) As the OECD’s lead tax official said in a recent policy forum, U.S. tariff threats may be losing their bite because trade has fallen so much that new tariffs won’t matter much anyway.
After Weeks of Discriminatory Treatment Florida’s Short-Term Rental Ban Softens
Report from FloridaPolitics.com
In Brief – After banning short-term rentals, reservations and advertising on March 28 as part of his pandemic shutdown program in Florida, and maintaining it through the early phases of the state’s re-opening, Governor Ron DeSantis has permitted a county-by-county reopening contingent on state government approval. The platform-enabled short-term rental industry was particularly upset by the fact that traditional hotels, resorts and timeshares were permitted to operate without restrictions throughout the shutdown, a policy the Governor defended as necessary due to the use of some hotels to house National Guard troops, but some suspected was driven by the political influence of the hotel industry. Short-term rentals make up a large share of available rooms in Northern Florida coastal communities and a number of those countries quickly had short-term rental reopening plans prepared and approved by the state.
Context – The short-term rental business in Florida, made up of thousands of small businesses and homeowners enabled by digital platforms such as AirBNB and VRBO, is a nearly $17 billion hospitality business serving over 10% of the tourists visiting the state. With such a robust and influential hotel industry, the short-term rental industry has had a sometimes litigious relationship with some Florida counties, especially South Florida’s Palm Beach and Miami-Dade. After weeks of the pandemic ban, property owners and investors filed a lawsuit in federal court against Governor DeSantis accusing him of discriminatory treatment violating their constitutional rights and asking for a temporary restraining order. While District Court Judge Steven D. Merryday rejected the temporary restraining order request, he did allow the lawsuit to proceed. However, given the Governor’s move to allow county-by-county openings, which rapidly proceeded in the northern part of the state, the case might be mooted.
ACCC Kicks Off Rule-Making for Google and Facebook to Pay Media Companies
Report from The Guardian
In Brief – The Australian Competition and Consumer Commission (ACCC) has published its Mandatory News Media Bargaining Code Concepts Paper outlining key issues as it proceeds to develop a regime called for by the Australian Government to require Google and Facebook to financially compensate the country’s news media enterprises for creating content that appears on, or is linked to, the platforms. The development of a media compensation regime was one recommendation of the ACCC’s landmark Digital Platforms Inquiry and the ACCC leadership believes they are setting an important global precedent. The paper poses 59 questions on topics such as the definition of news content, the Google and Facebook platforms that should be included (the ACCC is proposing that only those two companies be covered at this stage), data sharing rules, algorithmic transparency, the presentation of news, treatment of paywalls and new media business models, possible bargaining frameworks including collective bargaining and collective boycotts, and enforcement. Submissions are due on June 5.
Context – The ACCC leadership is correct that influential media businesses in markets globally are rallying around the idea that Facebook, Google and potentially other social media platforms should pay them. Along with the process in Australia, a recent competition court decision in France, which calls on Google to pay media companies for links to content based on a change in French copyright law enacted last year, is also drawing attention. In particular, the court preemptively rejected the tactic employed by Google when both Germany and Spain mandated that Google pay for news snippets, which was for Google to simply end its use of media snippets. The publishing industry drive to “tax” the digital giants is quickly looking like a targeted, industry-specific version of the broader Digital Services Tax effort, complete with pandemic justifications.
Indonesia to Apply 10% VAT to Digital Goods and Services Starting on July 1
Report from Reuters
In Brief – Indonesia, Southeast Asia’s largest economy, will impose a 10% VAT on digital products and services, including those sold by non-resident internet companies with a significant presence in the Indonesian market, beginning on July 1. According to the new regulation, the tax applies to companies with a “significant economic presence” in the country, a principle the Indonesian Government outlined in regulations in November, operating in sectors such as software, multimedia, and data, including video and music streaming services, applications and digital games. The economic and revenue impact of the pandemic downturn were cited as a justification of the tax change.
Context – Expanding VAT, GST and other forms of sales taxes to digital services, and placing the tax collection responsibility large, often foreign, digital platform, has been the “below the radar” front in the battle to expand taxation of the digital economy. Governments conscripting digital giants to collect consumption taxes have largely avoided the diplomatic standoffs brought on by national Digital Services Taxes applied directly to the revenues of the largest digital businesses. In Southeast Asia, Singapore and Malaysia expanded VAT to cover digital services providers on January 1, and the Philippines is debating the change now. In Latin America, Chile imposed a 19% VAT on digital video and music earlier this year, and Mexico’s VAT expands to streaming services on July 1. The economic and tax revenue impacts of the pandemic and shutdowns, combined with the perception that digital businesses are actually benefiting, has accelerated the creeping change to the meaning of “permanent establishment” and the “nexus” standard needed for governments to tax companies. It is a key component of the OECD Pillar One proposal on Digital Services Taxes but was also part of the US Supreme Court’s South Dakota v. Wayfair decision that expanded state sales tax collection online.
Zuckerberg and Breton Talk Platform Policy
Report from Tech Crunch
In Brief – Facebook CEO Mark Zuckerberg and France’s European Commissioner, Thierry Breton, who oversees the Internal Market and is considered, along with Margrethe Vestager, one of the two commissioners with the most sway on digital economy matters, participated in a one-on-one policy discussion hosted by CERRE, a Brussels-based public policy think tank. A video of the full one-on-one is posted here. Topics include…
Content Moderation – Zuckerberg reiterated the ongoing investments and efforts to quickly take down objectionable content while protecting free speech. Breton stressed the European commitment to values-based standards on digital platforms. FB’s innovative independent “oversight board” was discussed but Breton underplayed it as potentially a way to avoid CEO responsibility. COVID-related information policing was a major topic. Potentially dramatic change in platform responsibilities via a Digital Services Act expected to move starting in late 2020 overhung the discussion.
Privacy & Data Portability – An interesting topic with Zuckerberg expressing support for data portability at a high level but raising questions regarding defining, especially in the context of social networks, ownership of data posted by one user but covering multiple people. (FB has a thoughtful White Paper on the topic.) Breton believes people increasingly believe they own their data, should be able to move it to other service providers, and expects that will be instituted.
Corporate Taxes – Breton pushed Zuckerberg, and it’s fair to say digital companies in general, not to be “too smart” in thinking of creative ways to reduce tax bills, referencing tax havens. The French Government, and the majority of the European Commission, is strongly committed to changing the way corporate taxes are applied to digital businesses in order to raise revenue for countries with large consumer markets.
Trump v . Biden – Tech Issue Comparison
Report from Reuters
In Brief – Absent a black swan event, the fall presidential competition will be President Donald Trump versus former Vice President Joseph Biden. While digital and technology issues are not expected to be the top voter concerns, they will remain part of the discussion at Platform Economy Insights. This article gets the ball rolling with a high-level summary on the candidates’ positions on four issues…
Big Tech & Antitrust – Both have voiced concerns over digital giants, although neither appears overly committed. Calls for activist antitrust among progressive Democrats appears to be impacting Biden, who has held traditional views over his career. President Trump often mentions that Big Tech has monopoly problems, in particular when he has company-specific frustrations.
Social Media Content Moderation – Both clearly have personal concerns with their treatment by the social media giants. President Trump, like many conservative digital activists, regularly claims that platforms are ideologically biased. Vice President Biden’s views are in line with many progressives who argue that platforms fail to block political misinformation, disinformation and “lies”, including in ads. Both threaten the Sec. 230 federal civil liability regime to push for better treatment.
Data Privacy – Both candidates express support for federal consumer privacy legislation, with Vice President Biden applauding the EU’s GDPR regime. President Trump and his Administration criticize tech companies over encryption, in particular Apple for protecting criminals.
Digital Divide – Both candidates support more public investments in expanding broadband to more Americans. There appears an unusual consensus for $20 billion for rural broadband.
Issues not mentioned include the taxation of digital companies and the regulation of “Gig” work platforms and independent contractors.
Privacy Advocates File Major Complaint With FTC Targeting TikTok
Report from Reuters
In Brief – A coalition of privacy advocates has filed a complaint with the Federal Trade Commission (FTC) alleging that TikTok, the highly popular Chinese-based short-video social media app, is violating the Children’s Online Privacy Protection Act (COPPA) and the settlement agreement the company reached in 2019 with the FTC also pertaining to children’s privacy. TikTok then paid a $5.7 million fine and agreed to remove all videos uploaded by anyone under the age of 13. The latest complaint includes detailed claims that the company has not followed through on removing the videos in question, does not do enough to obtain parental consent for new users under age 13, nor prevents underage users from easily avoiding parental consent or age-based limits. TikTok’s response to media inquiries has been to reaffirm its commitment to privacy and a safe user experience.
Context – TikTok’s possible compliance problems related children’s privacy combines two active digital policy trends – growing concern with the online rules applied to digital services that include many young users, and a growing sense among U.S. officials that the level of Chinese Government influence over all forms of digital services and communications in that country is problematic for Chinese digital businesses operating in the United States. Facing a proliferation of government inquiries and restrictions, including retroactive CFIUS review of the TikTok-Music.ly tie-up, content moderation concerns and censorship charges, and restrictions on the use of the app by service members and potentially all federal employees, the company has named a top Disney executive as it’s new CEO (and COO of its parent company), following their action last year in bringing highly-respected veteran Internet public policy leader Michael Beckerman in to lead its government relations efforts.
Maryland Tax Bill Mimicking European Digital Taxes Vetoed
Report from MultiChannel.com
In Brief – Maryland House Bill 732, which would create a first of its kind state Digital Advertising Tax has been vetoed by the Governor of Maryland. The tax mimics in many ways the Digital Services Taxes (DST) enacted by a number of countries in Europe and Asia as a way to increase taxes on large, mostly U.S.-based digital platform businesses. National DST efforts have drawn the ire of the Trump Administration and bipartisan congressional leaders, leading to threats of tariff retaliation if they go into effect. The Maryland bill proposed to tax the annual gross revenues derived from digital advertising services viewed in Maryland, broadly including banner, search engine and interstitial advertising, aiming to impose higher rates on very large companies, with the rate growing from 2.5% to 10% depending the digital company’s global annual gross revenues. Like many national DST proposals, the bill set minimum gross revenue thresholds, in this case $100,000,000 globally and $1,000,000 in Maryland. The Maryland legislature will have an opportunity to override the veto when it reconvenes as currently scheduled in January, or sooner if there is a special session later this year.
Context – While the DST-style bill passed in Maryland, and similar bills introduced in Nebraska and New York, illustrate that state legislators are increasingly likely to try to follow the model of national governments trying to tax large “foreign” digital businesses, many believe that state versions would face serious legal and constitutional challenges for violating the federal Permanent Internet Tax Freedom Act and the dormant Commerce Clause. In parallel with the effort to impose a new tax on out-of-state digital advertising firms, the Maryland legislature also amended the state’s sales tax to cover digital video and music streaming services when the physical media are already taxed. The Governor also vetoed that consumer tax as an unnecessary new burden on families dealing with the economic impacts of the pandemic.
European Consumer Group Consortium Opposes Google-FitBit Deal
Report from Reuters
In Brief – BEUC, an influential consortium of 45 national consumer organizations from 32 European countries, has announced it’s opposition to the Google bid to acquire fitness wearables and wellness app company FitBit. In its report on the proposed acquisition, the consumer advocates describe it as a test case for the European Commission in analyzing the anti-competitive effects of continued large-scale data accumulation via acquisition by the largest digital through acquisitions. Like many critics of the proposed sale, BEUC believes that adding FitBit’s health and location datasets and data collection capability, would likely strengthen Google’s dominance in online advertising, search and other digital markets.
Context – Google’s plan to acquire FitBit is a touchpoint for two digital public policy trends — new thinking on acquisitions related to the digital giants, and the implications of the biggest digital businesses expanding into health care. The U.S. Federal Trade Commission is reviewing all the acquisitions of the five biggest tech firms going back a decade, including those that were too small to require government notice, looking for signs of anti-competitive intent. The European Competition Authority has also announced that they are planning to look at smaller tech acquisitions. While concerns with the biggest firms getting bigger is widespread, the potential for undermining entrepreneurship by closing off routes to monetize innovation is growing too, as is the value of enabling the largest platforms to take on their counterparts in new markets, such as Google challenging Apple in hardware. Google’s FitBit deal is already being reviewed by the U.S. Department of Justice and Australia’s ACCC, and EU Competition Bureau review is nearly certain as well. The expansion of the biggest tech companies into health is well underway, and it is more than just Google, with a striking summary of the moves from Google, Apple and Amazon here.
Facebook Bid for GIPHY Draws Fire From Antitrust Activists in Congress
Report from The Verge
In Brief – Facebook has announced that it will buy GIPHY, a popular platform of sharable animated images, for a reported price of around $400 million, which is meaningfully lower than the $600 million valuation from its last round of private funding. GIPHY is one of the largest GIF sites on the internet and social media and messaging services like Twitter, Tinder, Slack and iMessage already have the service integrated into their apps. Antitrust reformers in the Senate, including Elizabeth Warren (D-MA), Amy Klobuchar (D-MN) and Josh Hawley (R-MO), the most outspoken Republican critic of the big Internet platforms in the Congress, each criticized the tie-up as undermining competition by giving Facebook access to a new source of data and insights into user activities on the other platforms, and called for regulatory scrutiny of the deal.
Context – Like the financially larger Google deal to acquire fitness wearable and wellness app company FitBit, the Facebook’s plan to acquire GIPHY is raising the hackles of those who believe that the largest digital platforms are already too big, with access to too much data, and an ability to undermine competitive threats. The Federal Trade Commission is reviewing all the acquisitions of Facebook and the other four largest tech firms going back a decade, including those that were too small to require government notice, looking for signs of anti-competitive effect. The European Competition Authority has also announced that they are planning to look at smaller tech acquisitions. While concerns with the biggest firms getting bigger is widespread, the potential for undermining entrepreneurship by closing off routes that entrepreneurs, and private equity investors, use to monetize innovation, is a growing concern as well. While progressive Democrats, including Senator Warren, have called for various forms of a merger and acquisition freeze due to the pandemic downturn, Republicans have rejected the idea.
Google to Face DoJ Antitrust Suit by Summer and AGs Soon After
Report from the New York Times
In Brief – After nearly a year of public reviews into potential anti-competitive conduct by the digital platform giants, unnamed U.S. Department of Justice (DoJ) officials have indicated that the agency will likely file suit against Google this summer, and a coalition of State Attorneys General led by the AG of Texas will likewise follow on with litigation in the fall. While the State AG case is reportedly focused on Google’s advertising business, the DoJ effort reportedly remains broader and could take in the company’s dominance of Internet search. Antitrust litigation targeting Google would be the biggest U.S. Government tech competition case since the decade-long legal campaign against Microsoft that ended with a settlement in 2001.
Context – While the DoJ and Federal Trade Commission publicly divvied up antitrust investigations into Google, Facebook, Amazon and Apple last summer, the DoJ, with personal leadership from Attorney General Bill Barr, has been the more aggressive agency, with both Google and Facebook appearing to be under intense focus. In addition, Google and Facebook have faced the broadest State AG coalition efforts as well. The more advanced state of the Google investigation is likely due to the fact that much of the conduct, complaints and legal thinking was part of the FTC investigation that wrapped up in January 2013, as well as the fact that the European Competition Authority is a decade into a campaign targeting Google that has resulted in three major cases – search dominance (in shopping), advertising, and the Android operating system – with each resulting in multi-billion Euro fines and multiple Google appeals. None of the history points to this legal battle wrapping up anytime soon.
Hack of Indonesia’s Tokopedia Highlights Data Security Issues
Report from The Jakarta Post
In Brief – Tokopedia, Indonesia’s largest e-commerce platform, and a home-grown unicorn, has confirmed that it suffered a data breach in March that appeared to have impacted at least 15 million of its 91 million user accounts. The breach first came to light when offers to sell Tokopedia user data appeared on the dark web. The company claimed that passwords and user financial information was secured through encryption but encouraged users to regularly change passwords as a healthy personal security practice.
Context – Indonesia is home to the largest and fastest growing digital market in Southeast Asia, represents the fifth largest market in the world for major platforms Facebook and Twitter, and is also home to large domestic firms such as Tokopedia, Golek and Traveloka. The Indonesian Government introduced a national data protection bill to the legislature in January and indicated that a modern data protection framework in line with the European GDPR was important to growing the digital economy and keeping up with developments in other ASEAN markets. However, the Tokopedia hack, including the lack of timely notice to users, has caused consumer groups and privacy advocates to express concerns with both the company and the government’s initial legislative proposal. Data breaches continue to be a principle trigger of data protection regulatory and legal intervention resulting in fines, including being a key trigger of the initial GDPR cases brought by national data protection authorities in Europe and the one source of class action liability related to the landmark California Consumer Protection Act.
French Online Hate Speech Law Goes Into Effect After a Year of Negotiation
Report from the BBC
In Brief – After nearly a year of debate and negotiation, legislation to require social media and search websites to take down hate speech and objectionable content has passed its final hurdle and will become law in France. Platforms, large or small, will have 24 hours to remove hate speech regarding race, religion, sexual orientation, gender, disability or sexual harassment, but just one hour for “manifestly illicit” content, in particular terrorism or child sexual abuse. France’s broadcasting regulator will serve as the auditing and enforcement authority, and offending platforms can face fines of up to 4% of global revenue. The French National Assembly, led by a majority supporting President Macron, and the Senate, never came to agreement on key provisions of the Assembly version passed in mid-2019, in particular over concerns that the heretofore unprecedented one-hour takedown time limit would to lead to automated-censoring technologies that could meaningfully limit free speech.
Context – The European Parliament enacted legislation last spring to require digital platforms to take down terrorism content within one hour, but the legislation remains bogged down in negotiations with the Commission and Council over whether platforms will be required to employ upload filters, a mandate Parliamentarians object to as a meaningful threat to free speech. Working through the last disagreements over the European terrorism bill could lead to a framework for the development of an EU Digital Services Act expected later this year and is likely to include new EU-wide platform policing mandates for a wide range of content. On the national level, the new French law follows on major initiatives enacted in Germany and Australia. The British Government remains committed to legislating the recommendations of the UK Online Harms White Paper which proposes new platforms requirements on a wide range of objectionable user content as well.
Prime Minister of Ireland Supports Digital Platform Payments to Traditional Media
Report from The Irish News
In Brief – Leo Varadkar, the Prime Minister of Ireland, has expressed support for the general idea that large social media companies pay domestic media companies for news content, such as is being proposed in Australia and France. Ireland serves as the European Headquarters for a number of U.S.-based digital giants, including Facebook, Twitter and Microsof, which could be impacted by the various revenue-sharing or mandatory licensing arrangements being discussed, and Varadkar, while praising digital company employment in the country, described them as “free riders on costs incurred by other people”. He stated that his government would study whether proposals such as the regime being developed in Australia would work in Ireland.
Context – Domestic media businesses in markets globally are rallying around emerging proposals to require social media and search businesses, Facebook, Google and Twitter in particular, to pay them for creating content, whether consumed on the digital platform or on the web site of a media company linked to the platform. Australia, through a two-year digital platform competition review, and France, through a change in copyright law and a recent competition court ruling, have been in the vanguard, while Canadian and Malaysian media companies have called on their governments to follow suit. The French case was noteworthy because its court preemptively rejected the tactic employed by Google when both Germany and Spain mandated that Google pay for news snippets, which was for Google to end its use of media snippets. The publishing industry drive to “tax” the platforms is quickly looking like an industry-specific version of the broader digital services tax effort, complete with pandemic justifications. It is worth reading the May 3rd entry in the blog from Google’s Managing Director in Australia, which notes that Google News, which provides links to media stories, does not even include advertising, while the media pages where readers land do.
Uber – Grubhub Deal Draws Fire from Progressive Competition Policy Critics
Report from ars technica
In Brief – Uber’s offer to acquire Grubhub, combining the second and third-largest meal delivery platforms to become the U.S. market leader, has prompted negative reactions from progressives competition policy reform advocates, including Rep. David Cicilline (D-RI), Chairman of the House Judiciary Committee’s Antitrust Subcommittee. As of March 2020, is it reported that Doordash had a 42% share of meal delivery sales, versus 28% for Grubhub and 20% for Uber Eats. In some metro markets the combined Uber market share would far exceed the national level, for example jumping from 17% to 80% in New York City, where Grubhub is very strong. Meal delivery services have generally experienced increased demand during the pandemic shutdowns, and while Uber’s passenger business has suffered a major falloff along with the rest of the transportation industry, its Uber Eats delivery platform has performed well.
Context – Progressive Democrats have voiced concerns that the pandemic downturn will lead to a wave of corporate consolidation that they claim would harm competition and consumers, and leaders such Chairman Cicilline, Sen. Elizabeth Warren (D-MA) and Rep. Alexandria Ocasio-Cortez (D-NY) have proposed a moratorium on mergers and acquisitions. The idea, rejected by senior Administration officials, is reportedly not part of the most recent draft Democratic pandemic relief legislation. However, whether a combination of numbers two and three in a growing (if not yet profitable) market will pass regulatory scrutiny, despite the support of business analysts, is another matter. There has been some mention of the failing firm defense, such as was raised in the UK when Amazon’s investment in Deliveroo was recently given provisional approval by the CMA, as Grubhub faced challenges in New York City during the height of the city’s COVID surge with many business clients and restaurant partners closing.
Poland Proposes Video Streaming Tax to Fund Domestic Film Industry Agency
Report from Euractiv.com
In Brief – The Polish Government has announced its intention to propose a 1.5% levy on the revenue of digital video streaming platforms including Netflix, Amazon and Apple. The intent of the surcharge is to provide a new stream of funding to the Polish Film Institute, a government agency that supports the development and dissemination of Polish films, including support for young film directors.
Context – As the pandemic downturn dramatically impacts economies in markets globally, and the largest digital businesses appear to be impacted less drastically than traditional businesses, with many even benefiting as digital services facilitate remote activities during lockdowns, proposals to tax or mandate revenue sharing by large platforms are proliferating. The Polish scheme to help fund its domestic film industry with a tax on the digital streaming giants, an idea rejected in January by a Canadian government panel on digital media policy, is similar in spirit to the proliferation of proposals in markets from Australia and France, to Malaysia and Canada, to mandate revenue sharing by large U.S.-based social media and Internet search platforms to help fund the domestic news media industry. The global campaign of national governments to impose sales tax-type digital services taxes on the revenues of the largest global digital businesses also appears to be getting a boost from the perception that digital businesses are weathering the pandemic just fine, with the Economic Commissioner of the EU, Tax Minister of France, and Finance Minister of Indonesia all recently making the case that the COVID pandemic increases the urgency for new digital services taxes.
OECD Tax Leader Pushes Back Target for Digital Tax Reform Consensus
Report from the Tax Foundation
In Brief – Yielding to the economic, social and operational challenges facing governments around the world attempting to deal with the COVID pandemic, the Director of Tax Policy and Administration at the Organization for Economic Cooperation and Development(OECD) has revealed that the negotiation timeline for new digital taxation proposals has been somewhat delayed. Where governments came out of a key January negotiating session aiming for agreement on a set of policies by early July, in order to have an implementation plan by the end of 2020, the timing of an agreement has now shifted to October. The group has not abandoned their end-of-year deadline for the overall project, but there was an admission that some pieces could slip into 2021.
Context – Pre-pandemic, national efforts to tax large digital companies in a new way were rapidly proliferating. Kick started by France’s enactment of a 3% national Digital Services Tax (DST) in mid-2019, which targeted large digital platforms, most of which are U.S.-based, here is a helpful chart updating various European country developments. The U.S. Government has responded to national DST proposals with tariff threats and pushed for a global deal that does not discriminate against Internet platforms. There remains hope that a series of national taxes, and potentially tariff retaliation, can be avoided with a multilateral deal, and most hopes are pinned on this OECD plan. However, not only are countries like the UK and India moving forward with national levies, but global officials such as the Tax Minister of France, Finance Minister of Indonesia and Economic Commissioner of the EU have recently argued that the robust success of digital businesses during the COVID pandemic increases the urgency of new digital taxes. A tax and trade war driven by unilateral digital tax measures could be very harmful to a weakened global economy.
UK Government Leaders Hint that Delays to Online Harms Legislation Likely
Report from E&T News
In Brief – Faced with major social and economic challenges created by the COVID pandemic, legislation to regulate online platforms as called for in the UK Online Harms White Paper released last year, and outlined in the government’s Initial Consultation Response posted in February, reportedly could be delayed for months, or even until the next parliamentary session in 2022. Top leaders of the Department for Digital, Culture, Media and Sport have indicated in parliamentary committee hearings that the government was committed to moving legislation forward but was considering carrying out pre-legislative scrutiny to fully vet proposals to force online platforms to uphold a duty of care to its users to block child exploitation and terrorist support, but also including revenge porn, hate speech, harassment, promotion of self-harm, disinformation, trolling, and the sale of illegal goods. An independent regulator will be tasked with creating “codes of practice” detailing how platforms should deal with each, and government officials state that they are committed to a regime that balances the interests of business innovation, free speech and vulnerable communities.
Context – The UK’s Online Harms White Paper was seen by many free speech advocates as one of the most aggressive efforts to regulate online conduct in any western democracy when released. While the strongest advocates for platforms being required to root out online child exploitation, such as the NSPCC and Internet Watch Foundation, continue to push for timely legislation, they have joined more than a dozen online safety-focused tech firms to form the Online Safety Tech Industry Association, a new trade group aiming to educate Ofcom, the Internet regulator announced in February, about concrete tools to protect children online now.
Seventh Circuit Upholds Federal Court as Venue for Illinois Biometric Lawsuits
Report from Reuters
In Brief – The 7th Circuit Federal Court of Appeals has ruled that failing to make appropriate disclosures to users and obtain consent as required by Illinois’ Biometric Information Privacy Act (BIPA) leads to an invasion of privacy rights that is a concrete injury, which is enough to establish Article III standing in federal court. On the other hand, failure to satisfy BIPA provisions related to posting of general data retention and use policies did not lead to concrete and particularized injury. Courts in Illinois have been split over the question of whether failures to abide by BIPA notice and consent requirements should be litigated in federal or state courts, in particular due to the requirement in federal court for plaintiffs to suffer concrete injury. In this case, Bryant v. Compass Group, the defendant company preferred to litigate in federal court due to a more stringent class certification analysis under the Federal Rules of Civil Procedure, and some other employer-friendly BIPA decisions.
Context – Illinois’ BIPA is increasingly the center of biometric privacy litigation in the U.S. since the Illinois Supreme Court decided in January 2019 that a statutory violation was sufficient to trigger standing under the law. BIPA imposes a range of obligations on companies that collect or obtain biometric information (such as facial scans, fingerprints, iris scans and voice prints), including obtaining written consent before collecting or sharing such information. Facebook recently settled a BIPA suit regarding its photo tagging services for $550 million, and TikTok, the Chinese-owned short-video social networking service was recently hit with a BIPA suit for allegedly failing to tell users they would collect face scans. They join Google, IBM, Amazon, Vimeo and Clearview AI among other high-profile litigation targets.
Tech Groups Call on India to Delay Digital Tax as Companies Respond to Pandemic
Report from Reuters
In Brief – A coalition of nine technology and business trade associations from the United States, Europe, Asia and Australia, have called on India’s finance minister to delay for nine months the implementation of a new 2% tax on digital services, in particular to ecommerce services that do not have a permanent establishment in India and take payment abroad in excess of approximately $260,000 for digital services provided to users in India. The new digital services tax is an expansion of the country’s equalization levy enacted in 2016 to tax online advertising. The expanded digital tax, which went into effect on April 1, caught industry off guard when it was added to budget legislation in March after not being included in the proposals presented by the government just a month earlier.
Context – Pre-pandemic, global efforts to tax large digital companies in a new way were kick-started by France’s enactment of a 3% national DST in mid-2019, and a growing number of countries, especially in Europe, followed a similar path — enacting a national DST, the U.S. responding with tariff threats, and the confrontation being deferred in hopes of a multilateral deal. Here is a helpful chart updating European developments as of mid-March. Multilateral negotiations have centered on an OECD plan with on again, off again, progress, and reports from mid-February indicating continued difficulties. Like India, the UK implemented its 2% DST on April 1, although the UK proposal, unlike its Indian counterpart, has undergone significant review and debate over more than a year. The U.S. has variously threatened both the UK and India with trade retaliation in response to their digital tax schemes, which it views as discriminatory, and each might be the next DST tax-tariff tripwire.
Supreme Court Hints Interest in LinkedIn Scraping Case Cert Petition
Report from MediaPost
In Brief – The Supreme Court has asked hiQ Labs to respond by May 26 to LinkedIn’s cert petition asking the Court to overturn the Ninth Circuit’s ruling that the Computer Fraud and Abuse Act (CFAA) likely cannot be used to prohibit the scraping of publicly available information on the web. The appeals court upheld a lower court order granting a preliminary injunction barring LinkedIn from blocking hiQ from accessing, scraping and analyzing publicly available LinkedIn member profiles used to offer services to corporate customers. LinkedIn has argued that blocking a web site from prohibiting scraping will lead to less information from being available on the open Internet, as web sites are forced to place information behind pay walls and other technical barriers, as well as to serious privacy harms as social media information, including photos, posted by individuals, is scraped up and potentially used by businesses to create tracking and surveillance services, such has come to light regarding Clearview AI.
Context – The CFAA, enacted to combat computer hacking and break-ins, makes it a crime to “access a computer without authorization” or in a manner that “exceeds authorization,” but does not clearly define what the phrases mean, leading to decades of litigation. The Supreme Court recently agreed to take up a CFAA case for the first time, with Nathan Van Buren v. the United States on the docket for October, giving the Court the opportunity to address a range of circuit court opinions regarding criminality. In addition, the federal DC District Court recently ruled in Sandvig v. Barr that simply violating a website’s Terms of Service is not alone likely the basis for a federal criminal finding.
Coalition of Ecommerce Businesses Calling for USPS Crisis Relief Funding
Report from the New York Times
In Brief – A coalition of online marketplace platforms, retailers and logistics services providers, including Amazon, has kicked off a $2 million advertising campaign aiming to build Republican support for Postal Service (USPS) relief funding and opposition to a major package rate increase demanded by President Trump. USPS, beset by long-term financial challenges, is seeing revenues severely impacted by the pandemic downturn. Congressional Democrats have proposed $25 billion for the USPS in the next round of coronavirus relief legislation, but Republicans are reportedly opposed to more funding without USPS agreeing to major changes in postal operations, facilities and labor contracts. The long-held views of President Trump regarding USPS providing what he sees as subsidized delivery services to Amazon, and his personal views of Amazon’s CEO, run through the standoff as drastic reductions in traditional mail revenues during the pandemic threaten to bankrupt the postal service.
Context – The future of the USPS, which plays a major role in ecommerce delivery of small packages, which its trucks and mailboxes conveniently handle, and to remote areas, could be a political issue in the fall. The President’s aversion to Amazon and its CEO is potentially up against a postal service that remains very popular, with a recent poll showing 91% approval, the highest among all government services. A $10-billion USPS line of credit is reportedly tied up by Treasury Department demands for policy changes and rate increases. And a major Republican donor and former executive of XPO Logistics, a service provider to Amazon that lost two-thirds of that business last year as the company “in-housed” more shipping, has been named as the next Postmaster General.
Senate Republicans Call for Targeted Federal Privacy Standards for COVID Tracking Apps
Report from Reuters
Context – Efforts to use smartphone tracking, tracing, and in some cases, monitoring and policing (see China’s use of predictive health QR codes to police access to many locations, or the Indian State of Karnataka mandating hourly geo-tagged selfies of quarantined individuals) are being explored globally. Mobile operating system giants Apple and Google are cooperating on a combined Bluetooth-enabled track-and-trace standard and offering to work with interested governments. Issues related to app effectiveness and a range of data privacy concerns highlight the debates, with European countries emerging from lockdowns coming to the fore. For those not personally tracking enough COVID-related topics, an almost endless supply of news and analysis on tech tracking, tracing and privacy globally can be found here.
Most Independent Contractors and Gig Workers Still Waiting for Federal Pandemic Benefits
Report from Market Watch
In Brief – Nearly six weeks after enactment of the $2 trillion federal CARES Act coronavirus relief legislation created a federal pandemic unemployment insurance payment for independent contractors, freelancers, gig workers and others self-employed individuals, most states are only now taking applications from this large class of impacted people. The novel economic relief for the self-employed is federally-funded but implemented by each state’s own unemployment insurance system, none of which had traditionally served these workers. The result was that most self-employed individuals were unable to file claims, receive payments, or even get answers to their questions for weeks, as each state worked to create processes and systems at the same time they were facing an unprecedented crush of newly unemployed traditional employees.
Context – The COVID economic downturn, which erupted in a matter of weeks into the greatest economic disruption since the Great Depression, is becoming a talking point in the political and legal fight over “gig worker” classification underway for years. Not surprisingly, both sides are arguing that the current crisis validates their position. At the same time that California struggled for more than month to provide any federally-funded unemployment relief to self-employed individuals, the state’s Attorney General was filing suit against Uber and Lyft for not treating drivers as employees, including with unemployment insurance. Ironically, the platform businesses were laying off tech employees as ride-hailing demand dried up, while many drivers quickly transitioned from transporting people to delivering food, groceries and packages.
Initial 20 Members of Facebook’s Novel Global Oversight Board Announced
Report from Reuters
In Brief – Facebook continues marching forward to create their Content Oversight Board (COB) – an independent organization the company has established with a $130 million grant to provide Facebook users with an appeal route to challenge the company’s content moderation decisions. In February, Thomas Hughes, a UK freedom of expression advocate, was named to head the COB’s staff, and now the first 20 members of the COB itself have been announced. Given Facebook’s immense global user base of 3 billion people, the geographic diversity is similarly global. While there are five Americans (four law professors and a libertarian free speech advocate), they are joined by 15 other nationalities, including former newspaper editors from the U.K. and Indonesia, former judges from Hungary and Colombia, ex-government officials from Israel, Denmark and Taiwan, and human rights advocates from Pakistan and West Africa. The COB itself will fill out the remaining slots on the planned 40-member board next year. To start, the COB will accept and review select cases where users disagree with Facebook’s content removal decisions, not decisions to allow other users’ content to stay up on the platform. The company is committing to abide by the board’s decision on specific cases but not, in all cases, to change overall content moderation policy.
Context – Content moderation is a huge challenge for digital platforms, and the political ramifications grow when a platform is especially large. After 18-months of progress establishing this content appeals board, it is worth stepping back and recognizing that there is nothing else like this. It is bold and interesting. But big questions remain. In particular, can any 40-person group give confidence to billions of emotional people on emotional issues, including political leaders, idealogues and advocates, that Facebook decisions to remove content are balanced and fair based on reviews of just dozens of cases a year?
Canadian Media Wants in on Global Rush to Grab a Share of Google and FB Ad Revenues
Report from the Toronto Sun
In Brief – Canadian newspapers have called upon the Canadian federal government to require social media platform giants, in particular Facebook and Google, to pay a share of their digital advertising revenues to Canadian media companies when they link to Canadian media content. The publishers’ letter called for their government to quickly follow the lead of Australia and France. Like in most markets, Canadian print media has shifted content online but most digital advertising revenue is earned by large platforms rather than the newspaper publishers themselves. The Canadian media companies also cited the pandemic economic downturn severely hurting their advertising revenues and claimed the U.S.-based platforms do not collect the same sales taxes. When asked about the coordinated media industry request, PM Trudeau indicated that his government was committed to helping Canadian media companies but would look to international coordination, which he thought would take a back seat to the COVID response.
Context – Frustration over the massive financial imbalances between the traditional national media businesses and U.S.-based digital giants has been a driving force behind digital platform competition reviews in many countries. Canadian media companies calling for their government to follow Australia comes right on the heels of the Malaysian news media industry, and the Australian Government itself cited the French competition authority ordering Google to implement a system to pay media for news snippets. And France was following the leads of Germany and Spain, which Google rejected by cutting snippets out of Google News. The publishing industry drive to “tax” the platforms is moving faster than the global digital services tax effort. It is worth reading the May 3rd blog from Google’s Managing Director in Australia, which notes that Google News, their service providing links to media stories, does not even include advertising, while the media pages where readers land do.
Gig Worker Legal Showdown Kicks Off as California AG Sues Uber and Lyft
Report from the New York Times
In Brief – California’s Attorney General and city attorneys from Los Angeles, San Francisco and San Diego have sued Uber and Lyft claiming that the companies have intentionally misclassified drivers as independent contractors rather than as employees, violating the state’s high-proifle employee classification law, AB 5. The law, enacted last year, requires companies to treat workers as employees if they control how workers perform tasks or if the work is a routine part of a company’s business. Uber, Lyft and other large gig work platforms have not reclassified their users as employees and have engaged in legal and political maneuverings to protect their business model and the ability of their users to remain independent contractors, which many workers support. The COVID economic downturn has highlighted how drivers, as independent contractors, do not benefit from employer-provided health benefits or traditional participation on unemployment insurance, while the flexible platform model has allowed many drivers to quickly transition from transporting people to delivering food, groceries and packages when ride-hailing demand dried up.
Context – After the pitched battle over enactment of AB 5, litigation has followed. The San Diego City Attorney filed a complaint against Instacart last September and California Superior Court Judge Timothy Taylor ruled in February that the company was likely misclassifying some shoppers. Independent truckers earned a stay in federal and state courts based on federal preemption due to federal law regulating interstate shipping, but a federal suit filed by Uber and Postmates did not achieve an injunction. The legal fight over the “ABC Test” incorporated in AB 5 could revolve around the issue of worker independence for contractors, a concept that appeared in Judge Taylor’s February ruling where he noted the importance of workers being “true free agents.” This issue appears in line with changes Uber, in particular, has made to its policies in California to reinforce the independence of its driving users.
US Supreme Court Hears Booking.com Trademark Case in First Conference Call Oral Argument
Report from MediaPost
In Brief – The intersection between the Internet top level domain (TLD) system and trademark law had its day “in” the United States Supreme Court (USSC), pitting Booking.com against the U.S. Patent and Trademark Office (PTO). The case involves whether a generic term, in this case “booking”, which otherwise could not be trademarked, can be eligible for being trademarked when combined with “.com”. The PTO rejected Booking.com’s trademark application and has argued that the combination of generic words and .com should not qualify for trademark protection citing a precedent from 1888. Booking.com argues that the PTO should be judging trademark applications on a case-by-case basis, including in cases of otherwise generic words with .com. A decision is expected in a few months.
Context – The PTO v. Booking.com oral arguments, while potentially interesting to intellectual property law and Internet policy aficionados, was noteworthy because the Supreme Court heard oral arguments remotely by conference call for the first time in its history, and equally noteworthy, allowed the call to be broadcast and live streamed. (You can find it here.) For those who have tried to attend USSC oral arguments in person, this was an exciting development. The call format involved the justices, in separate locations, asking questions sequentially, and even Justice Thomas took part. Chief Justice Roberts was a stern but fair moderator, and technical glitches were minimal. While court predictions based on oral arguments are always fraught with peril, my listen lends me to believe that Booking.com benefits from the fact PTO has allowed names like Weather.com, Tickets.com and Dating.com to be trademarked, the sense that the court has been moving away from black-and-white per se rules for years (which is PTO is defending), and that the PTO was asked directly for their fallback recommendation if they don’t fully prevail.
Federal Judge Tosses New Mexico AG Privacy Suit Against Twitter but Google Case Proceeds
Report from MediaPost
In Brief – A federal judge in New Mexico has dismissed claims made by the state’s Attorney General that Twitter and a collection of other digital advertising technology companies violated the federal Children’s Online Privacy Protection Act (COPPA), but ruled that the case against Google may proceed. New Mexico AG Hector Balderas filed suit in 2018 charging that European-based mobile app developer Tiny Lab Productions, who made smart phone games targeting kids, as well as Google and a collection of advertising technology companies, including Twitter’s MoPub, had violated COPPA by collecting data from children younger than 13 without parental consent. District Court Judge Martha Vazquez distinguished between Twitter (and the other ad tech companies) and Google, claiming that no evidence was presented that the ad tech companies had actual knowledge that Tiny Lab’s apps targeted children, and that the automated serving of ads that are consistent with the user being a child did not constitute actual knowledge, but there was evidence that Google personnel had reviewed Tiny Labs’ apps and therefore could have had actual knowledge that the games were intended for children.
Context – Mobile game divisions of Disney and Viacom, as well as Twitter and a collection of smaller ad-tech developers, have all recently settled a series of class-action complaints alleging that they facilitated behavioral tracking of children who played smart phone games targeted to young people. The distinction outlined by Judge Vazquez between actual knowledge of app content, and automated ad tech services, in the context of COPPA compliance, might be relevant in such matters going forward. Also, New Mexico’s AG filed a second COPPA suit against Google earlier this year, claiming that the company’s G Suite for Education collects a wide range of children’s personal data without parental approval, a charge rejected by Google.
Federal Judge Rules SideCar’s Anti-Competitive Practices Suit Against Uber Can Proceed
Report from Reuters
In Brief – After dismissing its claims as recently as late January, a federal judge in San Francisco has reversed course and ruled that SC Innovations, the successor to the now defunct Sidecar ride-hailing business, can proceed with its suit to prove that Uber tried to stifle competition in the ride-sharing business. Sidecar was a ride-sharing pioneer, launching its service in 2012, being the first to show prices to riders before booking rides, as well as claiming to be the first to match passengers for car-pooling. As Uber and other competitors such as Lyft grew their operations, SideCar shut down in late 2015, and sold its assets to General Motors the following year. SideCar alleges that a range of Uber practices related to pricing, both for drivers and riders, as well as other conduct intended to harm competitors, amounted to illegal anti-competitive conduct, harmed consumers, and led to the failure of their business.
Context – Uber is facing claims on many fronts, especially that it misclassifies drivers as independent contractors in order to save money on benefits and avoid regulations. Uber has suffered European legal setbacks in France and the UK regarding drivers as employees. The U.S. Federal Court of Appeals for the Third Circuit has ruled that the worker classification issue for Uber drivers should be considered at trial, overturning a previous District Court summary judgement in Uber’s favor. Following California’s landmark AB 5 worker classification law enacted last fall, whether platform-enabled “Gig” workers are “true free agents” in the words of the California Superior Court judge overseeing a challenge to Instacart is a key question, Uber’s strategy to adjust its policies in California to reinforce the independence of its driving users is likely to spread.
Facebook Rolls Out “Data Portability” for Photos to Help Assuage Dominance Concerns
Report from Reuters
In Brief – In a move widely seen as helping address concerns regarding their dominant position in social media and massive data holdings, Facebook is rolling out a service to U.S. and Canadian users to simply and securely transfer photos and videos they have uploaded to Facebook over to Google’s photo and video storage service. Due to privacy concerns related to transferring data regarding other Facebook users (or those who are not Facebook users), photo tags identifying people other than the user, and photos or video uploaded by other users, will not be able to be moved. While the program only facilitates transfers to Google, Facebook says that it is planning to expand to other partners.
Context – “Data portability” and other ideas based on the contention that Internet users own, or should own, data about themselves, are often raised in the context of privacy, and digital platform competition policy. Sens. Mark Warner (D-VA), Josh Hawley (R-MO) and Richard Blumenthal (D-CT) have sponsored the ACCESS Act, legislation that would give users the right to transfer their data from very large digital platforms (+100m users) to other digital platforms to promote competition and user-based data control. Mozilla released a very thoughtful working paper on platform interoperability as a competition policy tool last year. Facebook has also engaged on the issue with great seriousness, releasing a white paper that raised important issues related to the fact that much social network “data” involves other people besides the user with the account, namely their friends and family, and that appropriate limits on moving data to another platform without their approval are not yet established. Finally, Facebook, Google, Microsoft, and Twitter have been working on open data portability technical standards through the Data Transfer Project, likely lending to Google being the first participant in the Facebook program.
Malaysian Newspapers Pushing for Australia-Style Payments from Google and Facebook
Report from the New Straits Times
In Brief – Encouraged by an Australian Government plan to create a digital advertising revenue sharing regime requiring large social media platforms to pay traditional media businesses in Australia for links and other use of media content, the Malaysian newspaper industry is organizing to press the Malaysian Government to institute a similar revenue sharing system. Like in most markets, Malaysian print media has shifted content online but most digital advertising revenue is earned by large platforms rather than the newspaper publishers themselves, something they decry as unfair due to their content creation efforts. Some political leaders are taking up the idea, with one using the announcement of a Malaysian newspaper ending its print editions (it said, due to online competition and the COVID economic challenges) to call for online revenue sharing to save newspapers.
Context – Frustration over the massive financial imbalances between the traditional national media businesses and U.S.-based digital giants has been a driving force behind digital platform competition reviews in many countries. While the Australian Government plan to impose a revenue sharing agreement on large social media platforms to support Australian media was widely cited in Malaysian circles, the Australian Government cited a recent decision of the French competition authority ordering Google to implement a system to pay media for the use of news story snippets. Importantly, the French authorities rejected Google’s past remedy in France, Germany and Spain of simply abandoning snippets, arguing that the Google action was likely an unfair abuse of a dominant market position in search. In North America, a recommendation for digital platforms to pay into a Canadian Government-run fund to support traditional media is part of broad government digital media reform plan.