FCC Chairman Questions YouTube TV on Channel Carriage Policies

Report from the Washington Post

In Brief – Federal Communications Commission Chairman Brendan Carr has written a letter to the CEO of Alphabet and the head of its YouTube business unit about allegations that its YouTube TV service “discriminates against faith-based programming.” The allegation of discrimination against faith-based content carriers was raised by Great American Media, a company founded in 2021 a former CEO of the Hallmark Channel’s parent company, which operates several family-friendly TV and streaming networks carried by cable and streaming providers including Comcast, Cox, and Hulu. The content company claims that this discrimination is why its networks are not part of the YouTube TV channel offerings. Although Carr admitted in his letter that virtual Multichannel Video Programming Distributors (vMVPDs) like YouTube TV do not face the same regulatory regime as traditional MVPDs, he called on the company to brief FCC staff on the role of virtual MVPDs in the modern media marketplace and YouTube TV’s channel carriage negotiations process. A spokesperson for YouTube said that their channel decisions are “based on factors like user demand, operational cost and financial terms.”

Context – Many US conservatives have believed for years that tech giants had slanted rules and punished conservatives for challenging the ideological and cultural views of the largely-Bay Area corporate leaders. This is clearly President Trump’s top tech complaint, especially as it applies to him, and the top tech regulators in his new administration, including Carr, are vocal about censorship of conservative viewpoints. Over at the Federal Trade Commission, Chairman Andrew Ferguson has opened a public inquiry on “Tech Censorship” including so-called “de-monetizing” and “shadow-banning” by platforms. And while several top social media platforms are now moderating content in a very different manner than before, notably X and very recently Meta, beating this conservative drum will not slow down. But First Amendment challenges will likely stand in the way of government sanctions, including by the FCC.

Meta Sued by French Copyright Holders Over AI Training Data

Report from Reuters

In Brief – French publishers and authors are suing Meta for violating European copyright law when they copied massive amounts of their copyrighted material without permission and used it to train the company’s generative artificial intelligence (GAI) models. SNE, the trade association representing major French publishers, as well as authors’ association SGDL and writers’ union SNAC, have filed the complaint in a Paris intellectual property court. The plaintiffs allege to have evidence of “massive” breaches of copyright by Meta, with one saying, “We are witnessing monumental looting.” The group is also reaching out to the European Commission, alleging that Meta’s actions violate the EU’s AI rules. This is the first copyright lawsuit in France involving AI training, but AI companies have been hit by a wave of similar lawsuits from authors, visual artists, music publishers and other copyright owners in the United States. In the US, AI companies argue that using copyrighted material to develop AI models constitutes “fair use” under US copyright law. A representative for Meta did not immediately respond to a request for comment on the new lawsuit.

Context – Questions around the legality of “training” the neural networks of major GAI models with non-licensed copyrighted material is a top legal and regulatory issue surrounding AI. Copyright lawsuits have taken center stage in the US, but in the EU, with its comprehensive AI Act, regulators and AI expert groups will play key roles setting the rules. The US lawsuits will likely focus on “fair use”. Federal Judge William Orrick, overseeing cases involving image generating services, recently issued a ruling in which he explained that he is trying to ascertain how the GAI systems work. He will learn that they are not traditional databases. They do not store or retrieve copies. They “learn” from data and then produce new output. It will be interesting to see how US judges and EU expert groups react when GAI operators admit they truly don’t exactly know why their systems produce any particular output, hence the nagging existence of our favorite GAI concept, “hallucinations”.

Polish Government Plan to Tax Digital Giants Draws US Ire

Report from Notes from Poland

In Brief – The Polish Government is pressing ahead with plans to create a national Digital Services Tax (DST) hitting the largest digital companies despite harsh criticism from the incoming US Ambassador, adding to recent diplomatic spats between Poland and the United States. Poland currently imposes a 1.5% tax on its internet users who purchase streaming services, but the government’s Digital Minister is calling for Poland to join the collection of EU countries that impose a special corporate tax on large, mostly US-based, digital companies like Amazon, Google and Meta. The new tax reportedly could reach 7% of their in-Poland revenue. A Polish DST would come on the heels of the global corporate tax reform effort at the OECD hitting a roadblock with the election of President Donald Trump. That two-part agreement from 2021 was spearheaded by the Biden Administration. Several countries that had enacted national DSTs agreed to delay their operations as the multilateral tax plan was implemented, but the Trump Administration opposes the broader tax plan leaving national DSTs in its wake.

Context – During the first Trump Administration, France created the first DST to increase taxes on the biggest internet businesses. Most were US companies. Other countries followed suit. President Trump responded with tariff threats, the DSTs were delayed, and talks moved to the OECD. The second Trump Administration came out of the gate with two executive orders signaling that he opposed the OECD plan and will again aggressively fight foreign DSTs with retaliatory tariffs. And a further White House directive even more broadly threatens trade retaliation, covering any tax or regulatory actions that are “discriminatory, disproportionate, or designed to transfer significant funds or intellectual property from American companies to the foreign government or the foreign government’s favored domestic entities.” Meta would likely argue Poland is doing that with its new “neighboring rights” IP law aimed at forcing them to pay Polish media companies when Facebook and Instagram users freely post links to Polish media content.

UK CMA Releases Growth-Promoting Big Tech Competition Policy Vision

Report from Reuters

In Brief – The CEO of the UK Competition and Markets Authority (CMA) has set out a vision to oversee digital giants that will give them a regulatory road map of the agency’s priorities. The CMA’s strategic vision was laid out by Sarah Cardell in a speech to a London tech industry conference and is part of the antitrust agency’s response to the government’s call for the regulator to use its enforcement authority, especially in digital and technology markets, to contribute more to the country’s economic growth. That mandate was cited when the government removed the Chairman of the CMA’s Board of Directors in January and installed a former Amazon executive as the agency’s interim head. Cardell told the conference that the CMA would promote competition in ways that boost business and investor confidence, including prioritizing interventions with the most “clear and direct impact” on UK consumers and businesses and that consider “the interplay with other regulators domestically and internationally.” She added that the agency, which has recently gained significant new regulatory authority over the largest digital companies, would exercise its mandate using its “4Ps” framework – pace, predictability, proportionality and process – that would apply to its Big Tech oversight and merger control.

Context – Presenting the UK as a more reasonable and business-friendly regulator than the EU has been a goal of post-Brexit British Governments, but on tech policy it’s mostly been a distinction without a difference. The DMCC, the UK’s take on Big Tech regulation, is not meaningfully different from the EU’s Digital Markets Act on policy, but the Starmer Government appears committed to the idea that the process of implementing similar mandates can be much more appealing. Apple and Google are are now being designated as having Strategic Market Status under the DMCC, a no brainer, and the CMA just released a report on how both undermine competition in the mobile browser market. Whether the CMA arrives at meaningfully different rules and limitations than will be imposed elsewhere will be a test. As is the UK’s standoff with Apple over encryption.

Japanese Cabinet Backs Innovation-Focused AI Bill

Report from Kyodo News

In Brief – The Japanese government cabinet of Prime Minister Shigeru Ishiba has approved draft AI legislation that emphasizes innovation and investment rather than EU-style regulation. The bill, expected to be tabled in the current parliamentary session, follows the release of the interim report of the Cabinet Office’s AI Policy Study Group that emphasized balancing AI risk mitigation with innovation, maintaining international regulatory consistency, and requiring cooperation from AI developers to address serious incidents. Japan would continue using current laws and AI guidelines and focus on establishing a legal framework to require cooperation from AI developers into government investigations of serious AI incidents. Rather than a regulatory regime backed by penalties, companies would receive administrative guidance and be given the opportunity to improve safety and transparency practices, and in cases where the use of AI involves human rights violations, the names of companies concerned will be disclosed to the public, a so-called “name and shame” approach.

Context – The big AI public policy question has been whether governments are moving towards regulation or “soft law” governance. The EU’s AI Act has set the standard for AI regulation. And European data protection authorities are regulating AI as well. Japan, with its longstanding demographic challenges that could benefit from innovations in AI and robotics, was a global leader of the soft law model. However, last year a group of LDP lawmakers called for bringing EU-style AI legislation and regulation to Japan, including mandatory risk disclosures, third-party safety testing, compliance reports, and enforcement by fines and even criminal penalties. The pendulum has decidedly swung back in the other direction, in the US, the Trump Administration revoked the Biden AI executive order and is focused on innovation, and the UK, the Starmer Government is as well. At the recent Paris AI summit, French President Macron called for the EU to “resynchronize with the rest of the world” and EU Commissioner Virkkunen said that the Commission will be business-friendly in implementing its new rules.

UK Court Holds Secret Hearing on Demand That Apple End Strong Encryption

Report from the Washington Post

In Brief – Apple’s legal challenge to the UK security services’ demand that the iPhone giant provides them with the technical capability to break the end-to-end encryption applied to some iCloud storage was reportedly heard in a hearing before the Investigatory Powers Tribunal at the High Court in London in front of Lord Justice Singh and Mr. Justice Johnson. The panel is the judicial body that examines complaints against the UK security services. Apple’s complaint is believed to be the first challenge to provisions in the 2016 Investigatory Powers Act allowing UK authorities to break encryption. The unprecedented demand, which has not been officially confirmed because even revealing that it was made by the government is a criminal offense under the law, reportedly requires that UK security services be given the ability to access data uploaded to Apple’s iCloud storage by any user worldwide that uses Apple’s Advanced Data Protection (ADP), which is end-to-end encryption that even Apple cannot break.  The secrecy surrounding the entire matter, which includes the judicial hearing’s topic, substance, and proceedings, has raised objections from UK parliamentarians across the political spectrum as well as US Members of Congress, who note that the demand reportedly includes access to data of US users. Apple stopped offering ADP on iCloud to UK users in February but that did not end the legal proceedings.

Context – During the first Trump Administration, the UK security services stood with US Attorney General Bill Barr in criticizing the encryption practices of Big Tech companies. However, the second Trump Administration has a much more robust digital wing. The US Director of National Intelligence has called the UK demand an “egregious” violation of American rights, there are numerous calls in Washington to consider the move a violation of the countries’ bilateral data-sharing agreement, and President Trump said he told PM Kier Starmer that he can’t force Apple to break encryption. Besides, ending strong encryption is completely incompatible with Starmer’s plan to make the UK an appealing place for digital and AI developers.

First Lady Backs “Take It Down Act” on Non-Consensual Intimate Imagery

Report from the Washington Post

In Brief – First Lady Melania Trump, who has revived her “Be Best” online safety campaign, held a roundtable on Capitol Hill with lawmakers and victims of online sexual abuse to tout the Take It Down Act, legislation criminalizing nonconsensual intimate imagery (NCII) and forcing online platforms to quickly take it down. The measure was introduced last year by Sens. Ted Cruz (R-TX) and Amy Klobuchar (D-MN) and passed the Senate before the 118th Congress ended. In the opening weeks of the 119th Congress, the bill was reintroduced and again passed by the Senate. The group led by the First Lady and Cruz urged the House of Representatives to take up and pass the legislation, and President Trump said in his address to Congress that he would sign it into law. While there’s broad general agreement on the need to better address NCII, especially as AI-enabled image creation services have increased in availability, some free speech advocates say the bill is likely to face constitutional problems, especially the requirement for platforms to take down AI-generated fakes, so-called “digital forgeries”. Critics also argue that the bill threatens strong end-to-end encryption and will lead platforms to take down legal content because they won’t have time to sift the valid takedown requests from the malicious ones.

Context – Last year, dealing with AI-generated “deepfakes” was a category of AI legislation that made some progress in the US Congress. The Senate passed two measures billed as fighting deepfake NCII, the DEFIANCE Act that criminalized users spreading the images, and the Take It Down bill that added a 48-hour take down mandate on digital platforms when they receive complaints. Deepfake legislation was discussed for potential Lame Duck action on AI that paired well with the equally popular issues of protecting teens from online harms, but it was all pushed to the new Congress. This year, bill backers appear to be focusing on the message to protect the kids from the internet that is popular in Republican-led states, rather than the regulate AI angle that appears to have more traction in states led by Democrats.

Zalando and the EU Commission Square Off in Court Over VLOP Designation

Report from Reuters

In Brief – Germany-based Zalando, Europe’s biggest online fashion retailer, squared off against the European Commission in the EU’s General Court in Luxembourg over the designation of Zalando as a Very Large Online Platform (VLOP) under the EU’s Digital Services Act (DSA) that regulates how digital platforms that host third-content content address a wide range of objectionable material. The law sets a user threshold of 45 million active monthly users for VLOPs. Once designated, they face a more stringent regulatory regime, including oversite by the European Commission rather than a national regulator, stricter criteria for dealing with objectionable material, and the submission of regular risk assessments. Nineteen large digital platforms, including two search engines, were initially designated as VLOPs, including three online marketplaces – Amazon, AliExpress, and Zalando. Amazon and Zalando both objected to their designation. Zalando argued that its hybrid model of a retail business and a third-party marketplace is different from the other two VLOP marketplaces, but the Commission argues that all three operate similarly. Zalando is also challenging the Commission’s count of 83 million active users.

Context – Zalando said they were the only European company among the 19 large digital platforms initially designated as DSA VLOPs, and its CEO added, “These companies are talked about as bad actors and all of a sudden, we are on the same list. This is bad for our brand.” Although the DSA was often described as a response to online hate speech, disinformation, and threats to children, the Commission always argued that the law was very clear and covers all platforms that expose their users to content which can be illegal, including online marketplaces for physical or digital goods, which could be dangerous, fraudulent, or illegal. Chinese marketplace platforms Shein and Temu have since been added to the DSA roster as well, and several of the marketplace VLOPs already face compliance investigations. EU officials are also defending their big tech regulations as being neutral to country of origin, meaning they cover EU companies that meet size thresholds.

Utah Passes Bill Imposing Centralized Age Verification on App Stores

Report from the AP

In Brief – The Utah state legislature has sent Gov. Spencer Cox (R) the App Store Accountability Act requiring app stores to verify users’ ages and get parental consent for minors to download apps to their devices. When someone creates an app store account, they would be asked to provide age information, with a credit card being one age verification tool. Accounts for minors are to be linked to a parent’s account. Similar bills have been introduced in at least 12 other states. They have sparked a rift between digital giants over who should be responsible for verifying a user’s age when age limits are used to protect young people online. Meta regularly argues that Apple and Google, with their central role in the two dominant mobile device ecosystems, and with app stores used for nearly all app downloads, are best positioned. Meta, X and Snap released a joint statement applauding the Utah legislature after the bill was passed. Apple has been an opponent, claiming that parents will need to share sensitive documentation with app stores just to allow their children to access age-appropriate apps, which they say is “not in the interest of user safety or privacy.” Senator Todd Weiler (R), the bill’s sponsor, argued it’s “a lot easier to target two app stores than it is to target 10,000 developers.”

Context – Governments worldwide, including Australia, the EU, UK, and a growing number of US states, are introducing measures that are intended to protect children and teens from so-called online harms, especially involving social media and pornography. They operationally require age verification. In January, Singapore’s digital and media regulator announced that large app stores will need be take on system-level age verification measures in that country. The same month, the US Supreme Court heard oral arguments in a challenge brought by civil liberties advocates to a Texas law imposing age verification duties on some websites and apps hosting significant pornographic content. Their ruling, expected this summer, will impact the growing number of state laws aiming to regulate how teens use social media.

UK Antitrust Regulator Clears Microsoft Investments in OpenAI

Report from the Wall Street Journal

In Brief – The UK Competition and Markets Authority (CMA) has concluded its Phase 1 review of Microsoft’s $13 billion investment in AI company OpenAI, choosing to close the matter and not proceed to a Phase 2 review. The antitrust regulator determined that Microsoft’s investments did not amount to a de facto merger because the digital giant never gained de facto control over the AI developer. The CMA has engaged in a handful of similar reviews of major AI investments by US-based digital giants, including Amazon’s and Google’s investments in Anthropic, the creator of the “Claude” chatbot. In those cases, the regulator also ended its review after the first phase because the investing company did not gain material influence over the AI developer. While the review of Microsoft’s investment in OpenAI was underway, the CMA also investigated the digital giant’s move to hire key personnel away from AI startup InflectionAI, determining that the set of personnel transactions were appropriately considered a merger, but then cleared the transaction as not threatening competition. Regulatory scrutiny in the US, EU, and UK has contributed to Microsoft loosening its relationship with OpenAI, including relinquishing its seat as an observer on the AI developer’s board.

Context – Presenting the UK as a more reasonable regulator than the EU, and therefore an appealing market for business investment, has been a theme of post-Brexit British Governments. However, on tech policy, it’s mostly been a distinction without a difference, whether DMCC or DMA, OSA or DSA, or on antitrust reviews. But AI is now a top priority of Prime Minister Starmer who recently said that his government will offer investors “stability, pragmatism and the good sense they would expect from democratic British values.” But there is much more to digital regulation than just AI. Sacking the Chair of the CMA and replacing him with a former Amazon executive sent one signal, but the effort to force Apple to break its strong encryption will likely resonate very negatively with many tech leaders in the UK and globally.

Apple and Meta Expected to Face Modest Fines for DMA Shortfalls

Report from Reuters

In Brief – Sources with direct knowledge of the European Commission’s Digital Markets Act (DMA) investigations of Apple and Meta expect the companies to face modest fines when decisions are announced this month. Apple, Google, and Meta were the first “gatekeeper” companies investigated by the EU Competition Authority under the DMA. The regulator has been challenging Apple’s App Store rules and fees, believing that they do not allow app developers to freely steer consumers to alternative buying channels outside the Apple ecosystem. The commission believes that Meta’s ad-free subscription plans for Facebook and Instagram, dubbed “Pay or Consent” by critics, do not offer users adequate choice, demanding a free version with less-targeted ads. Although the DMA authorizes fines reaching 10% of a company’s global annual sales, the commission will justify lower sums based on the short duration of non-compliance with the 2023 law, and the regulator’s interest in prioritizing compliance over sanctions. Unsaid is the reality that smaller fines may be less problematic considering President Trump’s threat of tariff retaliation against foreign fines that disproportionately impact American digital businesses.

Context – US-EU disruptions in the second Trump presidency are obvious and tech regulation is just one factor. When there were reports that Europe was reevaluating its Big Tech policies, Commissioner Ribera said there was “no freezing” and “no reassessments” of DMA activity, but of course those not looking for a full-on trade war will try to moderate tensions. Trump often refers to tech company fines as discriminatory corporate taxes, just like DST levees. However, the aggressive US Department of Justice remedy recommendation in the Google search antitrust trial may indicate a willingness to accept tough antitrust mandates on the tech giants. So, using the DMA to force policy changes but without big fines might thread the needle. On the other hand, content moderation mandates under the DSA for X, even with small fines, could be a different matter as online viewpoint censorship is a top-tier Trump Administration concern.

French Antitrust Regulator to Penalize Apple for 3rd-Party App “Privacy” Rule

Report from Reuters

In Brief – After years of review, France’s antitrust agency is expected to soon conclude its probe of Apple’s highly publicized 2021 App Tracking Transparency (ATT) policy by imposing a fine and ordering that the feature be turned off for users in France. The policy requires all third-party apps to get explicit approval from iPhone users to collect online browsing data for use in digital advertising. Apple announced the policy in 2020 and billed it as a major step forward for user privacy, but the move was quickly challenged by digital advertising industry stakeholders who claimed the iPhone giant could use other user data sources in their device ecosystem to grow their own digital ad business at the expense of their competitors. A coalition of French trade groups filed an antitrust complaint in 2020 asking the Autorité de la Concurrence to block the ATT rollout, but the regulator rejected the request and instead announced that it would study Apple’s policy to determine if it was being used to unfairly penalize third-party apps and digital advertisers. In 2023, the regulator filed an initial objection, determining that the company abused its dominant position by imposing discriminatory, non-objective and non-transparent conditions for the use of user data for advertising purposes.

Context – Similar antitrust investigations have also been initiated in Germany, Italy, and Poland. Just last month, Germany’s FCO recently announced that it suspects that Apple is not treating third-party app developers as equally as required under the special German antitrust regime for the largest digital platforms. The regulator raised several concerns, including that Apple applies rules to data processing for advertising by third-parties that do not apply to Apple’s own data practices involved in advertising, Apple applies more consecutive user consent boxes to third-party apps than to itself, and that Apple’s tracking consent dialogues are unequal, with the language for consent to Apple tracking designed to encourage users to accept while language for tracking by third-party apps steers users against acceptance.

Apple Challenges UK Government Effort to Break iCloud Encryption

Report from the Financial Times

In Brief – Apple has reportedly filed a legal complaint with the UK Investigatory Powers Tribunal, a judicial body that examines complaints against the UK security services, challenging the government’s effort to force it to provide security services with a way to break the end-to-end encryption applied to some iCloud storage. Apple’s complaint is believed to be the first legal challenge to provisions in the 2016 Investigatory Powers Act allowing UK authorities to break encryption. The UK’s unprecedented demand, which has not been officially confirmed because revealing that a demand was made by the government is a criminal offense under the law, reportedly requires that UK security services be given the ability to access data uploaded to Apple’s iCloud storage by any user worldwide that uses Apple’s Advanced Data Protection (ADP), which is end-to-end encryption that even Apple cannot break. Although Apple has stopped offering ADP to UK users, the government reportedly still believes the company is not complying with their order.

Context – The British Government has long believed that having the ability to break the encryption of digital communications and storage systems is critical to combatting a wide range of crimes, including terrorist threats and child sexual abuse. And they are not alone. During the first Trump Administration, the UK security services stood with US Attorney General Bill Barr, who repeatedly criticized Apple and Meta encryption practices. However, the second Trump Administration has a much more robust digital wing. In response to bipartisan appeals from Members of Congress to challenge the UK effort, the administration’s new Director of National Intelligence called it an “egregious” violation of American rights, and US lawmakers have called on the Department of Justice to investigate whether the UK is violating its data sharing agreement with the US Government. President Trump used the occasion of a recent meeting with PM Kier Starmer to say that he told the UK’s leader that he can’t force Apple to break encryption and likened the effort to “something that you hear about with China.”

Department of Justice Reiterates Call to Force Google to Sell Chrome Browser

Report from the New York Times

In Brief – In the run-up to the April federal court hearing in the remedies phase of the antitrust trial in which District Court Judge Amit Mehta found Google guilty of illegally maintaining its monopoly over internet search, the US Department of Justice (DoJ) and a coalition of state attorneys general have largely reiterated their sweeping recommendations highlighted by their call to order Google to spin off its Chrome browser system. After Mehta’s ruling last August, the DoJ’s initial remedies recommendation called for many major changes to Google’s businesses. Along with the headline that the market-leading Chrome browser be spun out of the company, the DoJ asked for other significant limitations and mandates, including how it operates the Android mobile ecosystem, develops its AI and invests in AI firms, and treats Google’s own services and third-party competitors in search. The major change from the DoJ’s November remedies proposal is to walk back the limits on AI investments. Along with continuing to appeal Mehta’s initial ruling, Google continues to strongly criticize the DoJ’s “sweeping proposals” that go “miles beyond the Court’s decision.”

Context – A major tech industry parlor game is predicting how President Trump’s second administration will treat “Big Tech”. This filing backs the prediction that it won’t be much different than the Biden team, at least not for Google. While company officials must have taken heart last October when Trump expressed reticence about breaking up the company, they must have felt they took steps back when Gail Slater was nominated as the DoJ’s top antitrust official. Not only was she a top staffer to now-VP JD Vance, who has been highly critical of Big Tech and Google specifically, but two of her corporate employers have had big competition policy run-ins with Google. EU officials who are actively defending their Digital Markets Act and its major competition-inspired regulation of Google and other digital giants are certainly taking notes and reminding everyone that they are not alone in calling for very big changes.

House Republicans Probing Foreign Government Online Content Moderation

Report from CNBC

In Brief – House Judiciary Chair Jim Jordan (R-OH) has sent subpoenas to major digital platforms asking about their communications with foreign governments over their content moderation laws, regulations, and enforcement actions that could “censor speech” in the United States. The letters were sent to Amazon, Apple, Google, Meta, Microsoft, TikTok, X, and Rumble, which is a small video platform. Jordan, who last Congress actively investigated conservative allegations that the Biden Administration pressed many of the same digital platforms to restrict conservative viewpoints in the US, cites the EU’s Digital Services Act (DSA) and the UK’s Online Safety Act, as well as regulatory and judicial activity in countries like Brazil and Australia, as potentially limiting access to lawful speech in the United States. The House Judiciary Committee’s subpoenas follow FTC Chairman Andrew Ferguson launching a public inquiry asking online users if they have faced online censorship.

Context – Ending online “viewpoint censorship” is a nearly universal tech priority among US conservatives. For years, activists have claimed that tech giants have slanted rules and enforcement. Nobody more than President Trump. And as conservative activists increasingly network across borders, such charges are spreading globally. EU enforcement of the DSA is moving towards final decisions and possible fines, and with X and Musk in the crosshairs of Europe’s establishment, it is pulling in the Trump Administration. Meta seems intent on joining that fray with policies and rhetoric aligned with X and Musk, possibly to build goodwill with President Trump on “free speech” as the company battles EU regulators on other issues. Beyond Europe, X prevailed last year in a court standoff with Australia’s online safety regulator over an attempt to block a violent video outside the country, but the government is discussing legal changes to force future compliance, while Brazil’s highest court prevailed in a months-long battle with X and Musk to force a number of Brazilian conservative activists off the platform in a conflict that likely has President Trump’s attention.

Spotify CEO Presses the EU Commission to Fine Apple for DMA Violations

Report from Bloomberg

In Brief – The CEO of Spotify, the Sweden-based music platform and a long-time critic of Apple’s walled garden and the fees it imposes on independent app developers, went to Brussels and called on the European Commission to step up and enforce the Digital Markets Act (DMA) on the iPhone giant. Daniel Ek labeled Apple’s DMA compliance plan a “farce” and said the company was engaged in a “well-established pattern of delaying and stalling.” He added, “It is time for Europe to show that we are going to enforce the law that’s already been passed,” and claimed that crackdowns on Apple’s conduct are also becoming a focus for regulators in the US. EU competition chief Teresa Ribera has indicated that the European Commission would issue rulings in March on the year-long DMA investigations of Apple and Meta and that political pressure from the United States would not dissuade the bloc from enforcing its laws.

Context – The disruptions to US-EU relations caused by the second Trump presidency are obvious. Tech regulation is just one of the panoply of issues. In mid-January there were reports that the European Commission was reevaluating its Big Tech investigations. At the time, Ribera said there was “no freezing” and “no reassessments” of the cases being pursued under the DMA. Since then, President Trump and Vice President Vance have continued to directly criticize EU tech regulations, and Hill Republicans called on Commissioner Ribera to report to the US Congress on EU tech law enforcement. Apple’s travails in Europe have been on President Trump’s mind for months, with him often citing a call from CEO Tim Cook appealing for help dealing with EU regulations and fines. The DMA can lead to fines up to 10% of a company’s global annual revenue, and with the commission decisions on the horizon, President Trump issued a memorandum threatening retaliatory tariffs against countries imposing “disproportionate” penalties on American businesses, a clear shot across the bow of the EU. The Commission’s decisions regarding the size of the DMA fines may offer a path to some degree of de-escalation.

X and California Reach Agreement to Scrap Content Moderation Reports

Report from Courthouse News

In Brief – X and the State of California have reached a settlement agreement to end X’s challenge to Assembly Bill 587, with the state conceding that key parts of the law violated the First Amendment. AB 587, enacted in 2022, required large social media companies to disclose their content moderation policies and practices on controversial topics including hate speech, extremism, and disinformation. X argued that it interfered with constitutionally protected editorial decisions, while California maintained it was a commercial practices transparency measure. US District Judge William Shubb initially sided with the state, ruling that the Terms of Service Reports were commercial speech that informed consumers about company business practices and therefore faced lesser court scrutiny. But the 9th Circuit Court of Appeals later sided with X, ruling that the reports compelled speech and unconstitutionally influenced platform content moderation practices. Under the agreement, California acknowledged that the key provisions were unconstitutional and would not be enforced. The state will also pay X’s attorney’s fees. Some provisions of the law remain, including requirements for companies to disclose how they handle user reports of terms-of-service violations.

Context – Motivated by claims that big tech companies were stifling conservatives, Florida and Texas enacted laws in 2021 regulating social media content moderation. New York and California later passed laws to push the same platforms from the opposite direction, to police hate speech and harassment more. Legal challenges to the Texas and Florida measures reached with Supreme Court first, and while the High Court’s ruling sent the cases back to the lower courts to investigate whether the rulings on the “facial challenges” considered all manner of digital platforms, a six-justice majority agreed that the laws likely violated the First Amendment when applied to content moderation by traditional social media platforms. That conclusion led the Ninth Circuit to rule that the California law’s core provisions on content moderation were likely unconstitutional.

Online Education Company Sues Google Over AI Search Results

Report from CNBC

In Brief – Online education content company Chegg has filed a federal antitrust lawsuit against Google alleging that it is leveraging its online search monopoly to gain access to Chegg’s content for the purpose of training its AI services and then using its AI to give “answers” at the top of its search engine results page, reducing internet traffic to Chegg. The lawsuit follows Chegg’s declining performance, with a 24% year-over-year revenue drop leading to a Q4 net loss of $6.1 million, and its stock has fallen to just over $1 per share. Unlike many content creator lawsuits targeting AI developers for violating copyright laws while training their AI, Chegg builds on the ruling in the US Department of Justice’s antitrust suit against Google for illegally bolstering its monopoly in online search, claiming that Google uses that monopoly to extract Chegg’s proprietary content, and then shows users responses built on its content without attribution, cutting into Chegg’s traffic. A Google spokesperson said the company would fight the “meritless” claims and that AI Overviews drive significant traffic to a broader range of websites.

Context – The “fairness” of search results has been a morass plaguing the Internet ecosystem for more than 20 years. Nearly every business generates a large share of its web traffic through search, which is mostly Google search. Every Google change benefits some websites benefit while others feel aggrieved. AI Overviews appear to be the same mixed bag. Throughout the decades from “blue links” with a text ad sidebar, to “OneBoxes”, to AI Overviews, Google has argued that changes were intended to improve user experiences. But web businesses with falling traffic become unhappy. Look at the conflict with specialized “vertical search” services like flights, hotels, and local services. Allegations that Google penalized competitors to boost their own verticals led to the EU’s Google Shopping case and was a driver of the EU Digital Markets Act. Google’s DMA compliance plan on vertical search is expected to soon be rejected. The EU regulators appear set to regularly weigh advice on how Google should operate search. Maybe US judges will too. Generative AI answers will likely be more of the same.

EU’s Top Court Backs Italian Competition Ruling on Access to Android Auto

Report from Reuters

In Brief – The European Court of Justice has sided with the Italian Competition Authority and against Google in ruling that the digital giant may have violated competition law when it refused to do the work needed to integrate JuicePass, an app from energy company Enel-X, into its Android Auto platform. Enel’s app allows drivers to navigate to electric vehicle charging stations. In rejecting Enel’s request, Google originally cited safety concerns as well as claiming that there was no existing Android App template that would allow the navigation app to operate. The Italian regulator argued that Google allowed its own Maps and Waze apps to operate over Android Auto and ruled that the digital giant abused its dominant position by not doing the work necessary to allow the third-party app onto the platform as well. The High Court agreed that a dominant firm not making its platform interoperable with an app of another undertaking can be abusive but added that a refusal may be justified in some situations, including when there is no template for the category of apps concerned, or when granting interoperability “would compromise the security or integrity of the platform” or be technically impossible.

Context – When Advocate General Laila Medina sided with the Italian Competition Authority in September in her recommendation to the court, she noted that if access obligations require dominant platforms to engage in “active behaviour” such as developing software to allow interoperability, then the court will also have to “define the limits to those obligations”. In its decision, the High Court said the dominant firm is required to develop what is needed “within a period which is reasonable and necessary for that purpose and in return for, depending on the circumstances, appropriate financial consideration, taking into account the needs of the third-party undertaking which requested that development, the actual cost of the development and the right of the undertaking in a dominant position to derive an appropriate benefit from it.” Clear?

WhatsApp Channels Hits DSA’s VLOP User Numerical Threshold

Report from Bloomberg

In Brief – Meta has reported EU active user numbers for WhatsApp’s social media-type broadcasting service that place the platform above the numerical threshold for designation as a Very Large Online Platform (VLOP) under the EU’s Digital Services Act (DSA). The DSA regulates how digital platforms moderate illegal and objectional online content in Europe. Digital platforms hosting third-party content with more than 45 million monthly active users can be designated as VLOPs by the European Commission. They then face a more stringent regulatory regime, including oversite by the European Commission directly rather than by a national regulator, stricter criteria for dealing with a wide range of objectionable material, and the submission of regular risk assessments. WhatsApp Channels, which allows news outlets, organizations, public figures and others to broadcast messages to groups of followers and is separate from WhatsApp’s two-way private direct messaging service, is the third Meta platform to reach the VLOP threshold. Facebook and Instagram were among the initial 19 digital platforms designated as VLOPs in 2023. The Commission announced a probe of Facebook and Instagram in May 2024 to investigate whether the platforms are upholding the DSA’s rules on child protection.

Context – The DSA regulates how platforms deal with a range of objectionable content, including politically relevant disinformation and misinformation. The law’s backers say it protects free expression, however, as Elon Musk has become increasingly involved in European political debates, a growing number of officials have called for the Commission to use the DSA to regulate X’s “recommender systems”, meaning the algorithms used to promote political content. They argue that regulating alleged bias is different from regulating content itself. Of course, critics disagree. Top Trump Administration officials have been criticizing Europe for using laws like the DSA to restrict controversial viewpoints, and although Meta’s platforms, unlike X, have not yet been challenged on the issue, top Meta officials have joined the debate.

EU Commission Expected to Deliver DMA Findings Against Google Search

Report from Reuters

In Brief – The European Commission will reportedly announce a preliminary finding that Google’s proposed changes to bring its general search service into compliance with the Digital Markets Act (DMA) gatekeeper law fall short. Last March, the DMA regulator began investigating how Google Search treats “vertical” search competitors, such as those specializing in hotels, airfares, retail products, or local services, in comparison with Google’s own vertical search offerings. The DMA prohibits gatekeepers from using their core platform services to preference their other services. Many vertical search providers have complained for months that Google’s DMA plans fall short, while some large businesses who benefit from high ranking in Google Search currently have warned that some changes would benefit vertical search providers at their expense. Attempts to find agreement have included months of meetings, stakeholder forums hosted by the Commission, new Google compliance plans, and online tests.

Context – Five of the seven DMA gatekeepers are US-based. Of their 24 regulated “core platform services”, 22 are run by the US giants. Apple, Google and Meta were the three investigated for not complying with the law. Mid-summer, Apple’s App Store rules were found to not adequately allow app developers to steer consumers out of the Apple ecosystem, as well as charging developers’ excessive fees, while Meta’s ad-free subscription plans were found to not comply because users are not offered a free option with less targeted, less valuable, ads. The Commission is expected to announce fines soon. The Trump Administration, critical of EU tech regulations, has begun to threaten using tariffs to retaliate against foreign “taxes, fines, penalties, or other burdens” that disproportionately impact American digital businesses, which likely includes the DMA. In response, a Commission spokesperson said that EU digital laws are enforced “fairly and without discrimination” and that the bloc “will respond swiftly and decisively to defend its rights and regulatory autonomy against unjustified measures.”

South Africa Antitrust Regulator Calls for Tech Giants to Aid Local Media

Report from Bloomberg

In Brief – South Africa’s Competition Commission has issued a provisional report in its Media and Digital Platforms Market Inquiry (MDPMI) and found Google guilty of anti-competitive conduct, resulting in a recommendation that the search giant compensate local media outlets with up to 500 million rand ($27.29 million) annually for three to five years. The antitrust regulator argues that Google’s algorithms have unfairly favored global news outlets over local media, costing South Africa’s media industry clicks and advertising revenue for the past 14 years. Along with making the media payments, Google should modify its search algorithm to benefit local media. The report also claims that Facebook and X algorithms deprioritize South African news content resulting in decreasing clicks that bring users from the social media platforms to media sites. The Competition Commission is calling on the platforms to increase referral traffic to South African media outlets and increase their ad revenue sharing or face a new digital ad levy of up to 10 percent.

Context – Google and Meta have been facing years of pressure from national governments to pay national media companies based on the allegation that most online ad revenues now flows to those two platforms and therefore media outlets can’t fund their operations. We’ve been particularly interested in the diverging responses of Google and Meta. The standoff in Canada was striking, with Google paying and Meta blocking news instead. In Australia, a leader in forced media payments, the media payment commitments made by Google and Meta in 2021 expire in 2025, and Meta has indicated it will stop payments. Australia is proposing to retaliate with a special tax on large social media companies that don’t pay media companies. Finally, the recent Trump order targeting foreign tech taxes and regulations that impact US companies disproportionately includes regimes “designed to transfer significant funds” from American companies to a “foreign government’s favored domestic entities.” That certainly seems to cover the national media payments schemes.