News insights

Starmer Government Updates UK Priorities for Online Safety in 2025

Report from TechCrunch

In Brief – The UK Government’s Minister for Science, Innovation and Technology has released a draft of his strategic priorities to create a safer online environment, including recommendations regarding the implementation of the Online Safety Act (OSA) that is scheduled to come fully online in the spring. Minister Peter Kyle’s “key themes” include safety by design, platform transparency and accountability, and agile regulation, and continues the priority focus on keeping children safe online. Platform providers are expected to “take proactive steps to reduce the risks their services are used to carry out” including terrorism, child sexual abuse and exploitation, illegal suicide and self-harm content, illegal disinformation, hate that incites violence towards specific individuals or groups, UK-linked content designed to encourage or facilitate organized immigration crime by criminal groups, illegal foreign interference such as state-sponsored disinformation, fraud, and “other priority offences.” The new priorities will be sent to lawmakers for approval, and the government expects them to be in place next spring. In the meantime, Ofcom, the regulator enforcing the legislation, is set to publish the first edition of illegal harms codes and guidance under the act next month, and platforms will have three months to complete their illegal harms risk assessments.

Context – In mid-October, PM Starmer set out AI and digital technology investment and innovation as economic development priorities and said that regulators would champion deregulation. At the same time, some critics claim that regulation like the OSA is already “not fit for purpose” and during summer riots spurred by anger towards minorities, which many said were inflamed by social media commentary, government leaders threatened to open it back up and expend it. Also, with the Australian Government proposing legislation to ban those under age 16 from using social media, there are calls to consider an age limit in the UK and Kyle said he would not rule it out although that was later “clarified” as an age limit not being planned. More of the schizophrenic-seeming UK tech policy.

Google Tests Impact of Removing News from Searches in Europe

Report from The Verge

In Brief – Google has announced that it is testing a modified version of Google search on a small share of users in Europe that does not deliver links to news media stories from European-based media companies. The search giant will remove news articles from search results, Google News, and Discover for one percent of users in Belgium, Croatia, Denmark, France, Greece, Italy, the Netherlands, Poland, and Spain. They say the “time-limited” test is being done because EU regulators and publishers “have asked for additional data about the effect of news content in Search.” The company says it will continue to show results from websites and news publishers located outside the EU during the test.

Context – When Google discusses dropping news links from search results, speculation runs to the ongoing battles with media companies over government mandates to force Google and Meta to pay them when their news content appears on the digital giants’ platforms. In recent years, Google has threatened to drop local media from search results in Australia, Canada, and California, but in each case, Google ended up agreeing to some manner of bulk payments to big local media companies to forestall government-set mandatory payments. The biggest news on the issue is how Meta has changed their stance. After agreeing set up a major media payments regime in Australia in 2021, Meta has decisively changed course and has said that they will prohibit users, including media companies, from posting news links in jurisdictions that require Meta to pay for those links. They implemented this policy in Canada in 2023 and threaten to do so in California. When push comes to shove, Google pays, and Meta tries not to. The situation in the EU is a bit different as license payments are engineered through copyright “neighboring rights” enforced by aggressive antitrust agencies arguing that not complying is an abuse of a dominant position. But again, Google has been paying more and Meta is taking a harder line, most recently in Poland. Lastly, media companies are trying to engineer payments from more very large platforms, including Apple, TikTok and X.

Meta Ordered to Not Share WhatsApp Data with Its Other Services in India

Report from Mint

In Brief – The Competition Commission of India (CCI) has ruled that WhatsApp and its parent company Meta violated the 2002 Competition Act by “abusing its dominant position” when the messaging app’s privacy policy was changed in 2021 to require users to accept that their data could be shared with other companies and services within Meta. The messaging app is the most popular in the India with over 500 million users. The company has been fined 2.13 billion rupees ($25.25 million) and WhatsApp has been directed to stop sharing data collected on its platform with any of the other Meta companies for advertising purposes for a period of five years. For purposes other than advertising, the CCI says that WhatsApp’s policy should include a detailed explanation of the user data shared with other Meta group companies or products specifying the purpose, and that only data sharing for the purpose of providing the WhatsApp services itself should be required of a user. A WhatsApp spokesperson said that user privacy remains the company’s highest priority, that the 2021 policy change did not change the privacy of people’s personal messages, and that users who did not accept the update continued to be able to use WhatsApp without having their accounts deleted or losing functionality. The company has said it would appeal the order.

Context – The CCI’s application of antitrust law to block data sharing between WhatsApp and other Meta services is similar to the successful effort of the German Federal Cartel Office (FCO) to police Meta data policies and prohibit combining the data of individual users across its different services without their freely given consent. The German antitrust regulator first objected Facebook’s data policies in 2019, arguing that its data policies abused the company’s dominant position. The agency announced last month that Meta has dropped its appeal of the order and agreed to a set of policies that FCO President Andreas Mundt says, “means that users now have much greater control over how their data are combined.” While the company did not say the new policies will be used in other markets, it seems they might eventually in India.

UK Antitrust Regulators Clear Google’s Investment in AI Company Anthropic

Report from Bloomberg

In Brief – The UK Competition and Markets Authority (CMA) has concluded its Phase 1 review of Google’s $2 billion investment in AI company Anthropic, creator of the chatbot “Claude”, by clearing the transaction because it believes that Google will not have material influence over the AI startup. The British antitrust regulator pursued a similar course of action in reviewing the competition implications of Amazon’s $4 billion investment in Anthropic, likewise deciding that the digital giant’s investment did not qualify for further review due to lack of material influence. The CMA also opened a Phase 1 review of Microsoft’s major investments in chatbot leader OpenAI in late 2023, and but unlike their reviews of the Amazon and Google investments in Anthropic, they have not formally closed that matter. However, the CMA did determine that Microsoft’s move to hire key personnel away from AI startup InflectionAI and establish a business relationship with the company afterwards was appropriately considered a merger, but then cleared the transaction as not threatening competition.

Context – In recent years, competition regulators in the US, EU and UK have been aligned that vigorous antitrust scrutiny is key to creating healthy competition in emerging AI-related markets. In July, they signed a joint statement committing to “work to ensure effective competition and the fair and honest treatment of consumers and businesses”. This followed each agency opening an investigation of Microsoft’s relationship with OpenAI as well as looking at other deals between digital giants and AI startups. However, in the UK, Prime Minister Starmer has since spoken out at a major London investment conference saying that the country “needs to run toward” AI opportunities and that its regulators would champion deregulation and investment. And in the US, with the election of Donald Trump as President, there is widespread expectation that AI development will be promoted and regulation restrained, while federal merger reviews will be less aggressive.

Brendan Carr will be the Next FCC Chair. Big Sec. 230 Threat? (PEI Says No)

Report from Bloomberg

In Brief – President-elect Donald Trump has chosen current FCC Commissioner Brendan Carr as its next chair. Carr, who was appointed by then-President Trump in 2017, describes his priorities as “reining in Big Tech, ensuring that broadcasters operate in the public interest, and unleashing economic growth.” He is a long-time critic of alleged anti-conservative bias in the content moderation practices of large digital platforms, which he has called a “censorship cartel”. He does not need to be re-confirmed.

Context – The claim that tech giants discriminated against conservatives was a common refrain during the first Trump Administration, including by Carr. Donald Trump campaigned against Sec. 230 in 2020. But so did Joe Biden. Criticism on the right only ramped up after the 2020 election, the de-platforming of President Trump, and aggressive Biden Administration pressure on platforms to restrict misinformation on Covid and vaccines. Justice Clarence Thomas issued several missives on regulating large social media platforms and argued Sec. 230 was being misinterpreted. Texas and Florida enacted laws to regulate content moderation consistent with what Carr calls for. Challenges reached the High Court earlier this year. While they were sent back to lower courts to investigate the full scope of the state laws, a majority was clear that content moderation by traditional social media was protected by the First Amendment. The chance that the new Congress severely restricts Sec. 230 remains very slim, and if Carr leads an effort to have the FCC change Sec. 230 through regulation, the Supreme Court’s revitalized “Major Questions Doctrine”, often cited by conservatives, including Carr, to limit regulatory overreach, will come into play as well. Instead, expect Carr and other Republicans to jawbone Big Tech to not restrict conservative viewpoints, again ironic given the years-long clash on that topic led by Republican critics that also made it to the High Court this year. Lastly, Elon Musk now owns X, and that platform, once the conversational home of what Nate Silver called the Indigo Blob, is decidedly not anti-conservative. Of course, expect Carr to get busy stopping the Biden FCC’s foray into Net Neutrality.

Meta Fined by the EU for Tying Its Marketplace to Facebook

Report from the New York Times

In Brief – The European Commission has fined Meta 800 million euros for unfairly bundling its classified ads-type Marketplace service into Facebook’s huge social network and abusing its dominance in online advertising to impose unfair business terms on rival shopping platforms. The company launched the Facebook Marketplace in 2016 and quickly integrated it into its massively used core social media platform. Meta’s Marketplace has since grown into one of the top classifieds ads platforms in many markets, including in Europe. The Commission claims that tying the Marketplace to Facebook gave the service an unfair advantage over classifieds and consumer-to-consumer shopping competitors, and that Facebook imposed unfair terms and conditions on those competing businesses when they advertised on Facebook, often requiring them to share user data that was then used to benefit Meta’s Marketplace. The fine is one of the final acts EU Commissioner Margrethe Vestager before the end of her term as the top EU competition regulator and a leading voice on digital policy. Meta issued a statement saying, “Facebook users can choose whether or not to engage with Marketplace, and many don’t,” and that “people use Facebook Marketplace because they want to, not because they have to.” The company said they would appeal the decision.

Context – The competition regulators for the European Union and UK initiated parallel investigations of Meta’s Marketplace in 2021. In 2023, the company reached a settlement with the British regulators in which the social media giant agreed to allow classifieds and shopping services that advertise on Meta’s social media platforms to opt out of data sharing that could be used to benefit Meta’s Marketplace. EU regulators turned down a similar offer. Since the case was initiated, the EU has enacted the Digital Markets Act to regulate the largest digital companies and their top platforms rather than rely on competition investigations can can stretch on for years. Meta is now a designated “gatekeeper” company and its Marketplace is now a regulated “core platform service”.

Department of Justice Asks Federal Judge to Split Chrome Out of Google

Report from Bloomberg

In Brief – The US Department of Justice (DoJ) has asked federal judge Amit Mehta to order Google to spin off its Chrome browser system as part of an aggressively broad remedies recommendation following his ruling that Google violated federal antitrust laws in protecting its search monopoly. The DoJ’s court filing also asked for conduct remedies related to Google’s AI efforts, Android operating system, interactions between search and other Google services, and a licensing regime allowing competitors to access Google’s search data. If Mehta accepts the DoJ proposal, it would be the most aggressive effort to rein in a technology company since the DoJ attempted to break up Microsoft in 2000. In a response blog post, Google top legal officer said, “DOJ’s wildly overbroad proposal goes miles beyond the Court’s decision.”

Context – Mehta ruled in August that Google held a monopoly in the market for general internet search and engaged in illegal conduct to maintain that search monopoly, especially through large payments to Apple and Samsung to make its search engine the default option on smartphones and browsers. The judge found harm in the related market for the online text ads that appear on search results pages. Despite the judge’s relatively narrow findings of illegality, the DoJ laid out a broad set of potential remedies in an October court filing. Key moving pieces include the fact that the aggressive Biden Administration antitrust enforcers are certain to move on in January, as well as questions regarding whether antitrust (and anti-Big Tech) efforts will be dialed back by the new team. Trump, and some high-profile officials in the new administration, have been harshly critical of Google in the past, although the President-elect recently said breaking up big US companies like Google might be a bad idea. Plus, is there much question what President Trump truly cares most about related to Google? He complains about “unfair” search results. Watch the state of those complaints. Finally, Mehta certainly knows that Judge Thomas Penfield Jackson’s order breaking up Microsoft in 2000 was overturned on appeal.

DMA Compliance Pushes Booking to End Price Parity Policies in the EU

Report from TechXplore

In Brief – Booking has changed some of its contracts and online functionality to bring itself into compliance with the EU’s Digital Markets Act (DMA) that regulates the largest digital platforms of the seven largest digital companies. The main changes involve the company dropping its longstanding price parity clauses that prohibit hotel and other services vendors from offering consumers lower prices or better terms on other platforms. The price parity policies are being ended for EU-based travel offerings. The company is also establishing data-portability processes that allow business users to download data created by their operations on the platform and transfer them to other services providers. The changes are set out in a public summary of its DMA compliance report. The company is set to appear at a November 25 hearing organized by the European Commission that will allow stakeholders to provide feedback on the changes.

Context – The use of price parity (or “MFN”) clauses by dominant digital platforms has been a regulatory concern for years, especially when applied to sales on competing platforms with lower fees. Their use by hotel booking platforms has brought regulatory action in many global markets. Online food-delivery platforms have also faced scrutiny. Amazon has an aggressive price parity track record as well. Booking, long the top hotel reservation intermediation platform, and a platform that has had many run-ins with antitrust regulators over their price parity policies, was the first “gatekeeper” company added by the European Commission to the original six – Amazon, Apple, Google, Meta, Microsoft, and ByteDance. The five initial US giants all exceed $1 trillion in market capitalization, with two valued beyond $3 trillion, two more above $2 trillion, and Meta valued at nearly $1.5 trillion. ByteDance is estimated to be worth around $300 billion, and Booking is valued at “just” $160 billion. Google’s DMA compliance effort is leading it to raise the prominence of flight and hotel booking platforms in search results, with some hotels and airlines complaining that the changes are reducing their visibility in search.

Indian Investigation of Ecommerce Investment Law Violations Continue

Report from Reuters

In Brief – The Indian Enforcement Directorate, the agency that enforces the country’s foreign direct investment (FDI) laws, is stepping up its investigation of Amazon and Flipkart (which is owned by Walmart) for allegedly violating laws prohibiting foreign companies from operating multi-brand retail businesses. The Directorate is summoning Flipkart and Amazon executives to answer questions following raids on the offices of top sellers on both platforms that reportedly gathered evidence that the ecommerce giants exercised significant control of the sellers’ operations. A 2021 expose by Reuters based on leaked Amazon documents detailed how the company operated its business in India without technically including first-party retail, but instead worked very closely with a few large, nominally independent, third-party sellers as the core of the business. Flipkart is accused of similar tactics.

Context – The Indian ecommerce market has had a unique development path due to the country’s strict FDI laws prohibiting foreign ownership of multi-brand retailers but allowing foreign ownership of third-party marketplaces for independent sellers. Therefore, the country’s US-owned ecommerce leaders have structured their operations as “pure” third-party marketplaces without first-party retail. But Amazon and Flipkart have faced years of accusations from Indian retailers that they violate the FDI laws and operate as retailers with a few giant sellers serving as de facto wholesalers. In parallel with the Enforcement Directorate’s investigation of violations of FDI laws, the Competition Commission of India, the country’s antitrust authority, has found both platforms in violation of competition laws for giving a few large-volume sellers unfair preferences over the vast multitude of smaller retailers. Throughout this multiyear, two-front regulatory battle, Amazon has also been in court fighting Reliance Industries, an emerging ecommerce powerhouse owned by India’s richest man, which is attempting to build itself into the country’s largest ecommerce business unburdened by the limits on foreign ownership.

French Media Companies Sue X for Violating Copyright “Neighboring Rights”

Report from the Le Monde

In Brief – A coalition of leading French news media organizations is suing social media platform X for not financially compensating them when their content appears on the platform. The media companies are seeking licensing payments from X based on the “neighboring rights” provision added to French copyright law in 2019 to funnel some ad revenues from digital platforms to news media companies. Back in May, the Judicial Court of Paris ordered X to provide the media companies with data to help them determine the revenue generated for X by the sharing of their news content on the platform. The latest company lawsuit alleges that the social media site has not yet complied with the court order, “demonstrating its continued intent to avoid its legal obligations.” X argues that they are not required to pay the media companies because users post the content, not the platform itself.

Context – Google and Meta, who generate the most digital ad revenue, have been the main targets of media company efforts have governments compel digital platforms to pay them when news content appears on their platforms. Australia and France have led the effort. The Australia model is to impose licensing rates on Google and Meta through a government arbiter. France used the neighboring rights provision of the EU Copyright Directive enacted in 2019 to force Google to pay when they included “snippets” in search results. And when Google threatened to just stop using snippets, as they had earlier done in Spain and Germany, the French competition authority ruled that stopping snippets to avoid payments would violate antitrust law. While Google has been agreeing to pay media tolls, Meta broke ranks, blocked news when Canada enacted Australia-styled legislation, and has ended snippets for user media posts in Poland to avoid neighboring rights payments. In France, X will likely need to pay unless they block snippets. Then the question is whether X, which has never made much profit, will nevertheless be ruled a dominant platform like Google search was. And media companies will also be looking for new targets like TikTok.

Meta Proposes Free Apps with Less-Targeted Ads to Settle DMA Complaint

Report from the Wall Street Journal

In Brief – Meta is proposing to offer a free version of their top apps in Europe that use “contextual ads” that are less personalized than the traditionally targeted ads on Facebook and Instagram. Some of the new ads, which will also be targeted based on age, gender and location, will cover the whole screen and will not be skippable for a few seconds. The offer is a bid to resolve the preliminary determination of the European Commission that the company’s so-called “Pay or Consent” plan violates the Digital Markets Act (DMA) that governs the largest digital “gatekeepers”. In response to demands from EU privacy regulators that users have the option to reject targeted ads, Meta rolled out paid subscriptions for ad-free alternatives in October 2023. Commission competition regulators rejected that plan and argued that users must be given a free option that uses less-personal data for advertising but provides similar functionality as the version employing targeted ads. Meta continues to argue that offering two versions of their service, one paid without ads and one free with ads, is consistent with European Court of Justice rulings, and that less effective advertising harms businesses that advertise online, especially small businesses with small ad budgets. The new Meta offer also reduces the subscription price for their ad-free alternative.

Context – Meta offered its first ad-free versions of Facebook and Instagram in response to GDPR privacy enforcement actions. Privacy advocates and data protection regulators objected to Meta’s binary plan. Commission competition regulators only later joined, saying that while the DMA does not require Meta to offer its services for free, it does require the company, and presumably all giant platforms with ads, to offer versions that are both free and employ far less-efficient, less-targeted, low-value advertising. While neither EU law directly bans targeted advertising, if EU enforcers and eventually courts interpret the laws in that way, it will reverberate throughout the massive and complex digital ad ecosystem, including for publishers,  advertisers, and ad services providers.

Questions Follow US-EU Trade and Tech Council Post-Biden Administration

Report from EuroNews

In Brief – Following the electoral victory of former President Donald Trump over Vice President Kamala Harris, it is unclear if the US-EU Trade and Technology Council (TTC), set up in 2021 by President Joe Biden and European Commission President Ursula von der Leyen, will continue operating in 2025. Despite uncertainty regarding political will on both sides of the Atlantic, representatives of the European Commission indicated that they were willing to continue working on technical standards, for example related to AI safety. The TTC had been directed to facilitate “regular discussions” via a cooperation agreement between the European AI Office and the US AI Safety Institute, including work towards the development of a common framework for evaluating generative AI models.

Context – The TTC was intended to illustrate the Biden Administration’s more collegial diplomatic style with long-term allies than the first Trump Administration. The TTC has 10 Working Groups, including on tech standards, data governance and tech platform regulation, climate and green tech, secure supply chains, information and communications technology security and competitiveness, and export controls. During the three-plus years of the TTC, the EU enacted a barrage of legislation imposing unprecedented regulation on digital platforms, including the Digital Markets Act imposing competition policy-inspired mandates on the mostly US-based tech giants, and the Digital Services Act regulating content moderation on all digital platforms. The EU also enacted the AI Act, the world’s first comprehensive AI regulatory regime. While US progressives were decidedly supportive of the big EU regulatory initiatives, nothing similar moved in the US Congress and the policies remain controversial in many quarters. Given President-elect Trump’s recent comments claiming that he assured Apple’s CEO that he would not let Europe “take advantage of our companies”, and his campaign’s promise to revoke President Biden’s AI Executive Order, the TTC may be on hold for a while.

Apple Expected to be the First DMA Gatekeeper to Face an EU Fine

Report from Bloomberg

In Brief – Apple is reportedly going to face a fine from the European Commission for failing to comply with the Digital Markets Act (DMA) that regulates the conduct of the largest digital “gatekeepers” to prohibit them from engaging in a range of anticompetitive practices on their top platforms. Apple’s fine will be imposed on the iPhone giant for failing to allow app developers to steer their users to alternative ways to purchase digital content outside of apps distributed through the App Store, which carry commissions reaching 30 percent. Earlier this year, Apple was hit with a €1.8 billion fine for similar anti-steering abuses against music streaming apps such as Spotify via the EU’s traditional competition law processes. The DMA allows EU regulators to impose fines of up to 10% of a firm’s global annual sales, which jumps to 20% for repeated infringements, or periodic fines of as much as 5% of the average daily revenue. The exact timing and size of the fine, which would be the first imposed on a DMA gatekeeper, is still uncertain, although it is expected to be announced before the end of the year.

Context – There are currently 7 DMA gatekeepers, and they operate 24 “core platform services” that are required to comply with the law’s regulatory mandates. Apple has four covered platforms. The DMA challenges Apple’s core user proposition more than the other “gatekeepers”. Rather than using technical or non-transparent practices to shape its platforms, Apple built an openly restrictive “walled garden” with a value proposition that the Apple platform was better at promoting privacy, security, and a consistent user experience. And their devices have been very popular with users. In June, the Commission determined that Apple’s proposed changes to its App Store rules and fees, which were harshly criticized by large app developers, did not satisfy the law’s requirements. The Commission is also investigating aspects of Google’s and Meta’s DMA compliance plans. President-elect Trump recently said that Apple’s CEO Tim Cook has reached out to him to complain about aggressive EU regulations and penalties.

New York Times Digital Workers Union Abandons Week-Long Strike

Report from the Washington Post

In Brief – The New York Times Tech Guild, a labor union representing more than 600 highly skilled software engineers, product managers, designers and data analysts across the New York Times Company’s many digital services, abandoned their labor stoppage a week after going on strike. The Guild went on strike the day before Election Day to put maximum pressure on company management after more than two years of contract negotiations. However, Election Night tech features such as the Times’ election forecasting “needle” worked throughout. It’s understood that some of the company’s digital workers, as well as technology services contractors, likely crossed the virtual picket line and supported features and services during the stoppage. In September, the Guild’s members overwhelmingly voted in favor of a motion authorizing a strike, and the decision to walk out just before Election Day was made due to the expected high-volume traffic on the Times’ apps and websites straining their capability. In announcing an end to the week-long work stoppage, the union called the strike a “warning” to the Times, while a company spokesperson said, “We look forward to continuing to work with Tech Guild to reach a fair contract that takes into account that they are already among the highest paid individual contributors in the Company and journalism is our top priority,” she said.

Context – The union, formed in 2022, is the largest in the country made up of highly skilled and highly paid digital workers. They’ve been negotiating since on improved pay and benefits, workplace protection processes, and remote work guarantees. Times management has countered that Tech Guild employees average about $190,000 in annual salary, which is $40,000 more than Times journalists, and that talks involve many non-traditional bargaining issues like AI policies. During the strike the Guild asked Times’ subscribers to “not cross our digital picket line by playing any of the NYT Games… as well as not using the cooking app” and launched a “strike-friendly” website with free games and recipes for subscribers.

Massachusetts Ballot Initiative Allows Rideshare Drivers to Join Unions

Report from the New York Times

In Brief – Massachusetts voters enacted a statewide ballot initiative that gives rideshare drivers in the state the ability to join a union while remaining independent contractors. The measure, which won 54% of the vote, was proposed by the Service Employees International Union and the International Association of Machinists and Aerospace Workers but was divisive because some labor advocates demand that rideshare platforms like Uber and Lyft reclassify drivers as company employees. Although independent contractors cannot join unions and collectively bargain under the federal National Labor Relations Act, states can authorize unions of independent contractors if the unions are supervised by the state. The new law allows independent drivers to form a union if 25% of the active rideshare drivers in the state, which currently number around 70,000, join. The union could then negotiate with the companies on pay and benefits policy. The law also creates a state board to hear driver complaints about unfair company work practices. The measure does not contain strike protections for union members and does not extend the new regime to food delivery workers. Uber and Lyft did not oppose the ballot initiative, which did not challenge their classification of drivers as independent contractors.

Context – Reclassifying platform-enabled Gig-style workers as company employees rather than independent contractors has been at a virtual standstill in the US since California voters soundly enacted Prop. 22 in 2020 overturning state law AB 5. The ridesharing platforms have been willing to deal on pay levels for independent contractor drivers and 2024 saw more action than most years, with Uber and Lyft ending multiyear pay and benefits battles in Minnesota and Massachusetts. They are now added to New York City (2019), the State of California (2020), and the City of Seattle and State of Washington (2022). At the federal level, the incoming Trump Administration is very likely to revert back to policies that support independent contractor-based business models that were overturned by the Biden Department of Labor.

Judge Dismisses Copyright Adjacent Lawsuit Targeting OpenAI

Report from Reuters

In Brief – US District Judge Colleen McMahon dismissed a lawsuit filed by news outlets Raw Story and AlterNet that allege OpenAI, the company behind chatbot phenom ChatGPT, violated the federal Digital Millenium Copyright Act (DMCA) by copying their content and using it to train large language models without including the copyright management information (CMI) associated with each article. McMahon ruled that the companies lacked standing to bring the case because they failed to allege “any actual adverse effects” from the removal of the CMI but allowed them to file a new complaint. The judge noted that the plaintiffs brought the lawsuit based on the DMCA’s copyright management provisions, and she was “skeptical” that they could “allege a cognizable injury” in that context. However, she said that the alleged injury for which they “truly seek redress” is the use of their articles for training without compensation, which is a legal question that is to be decided in other proceedings.

Context – Massive amounts of copyrighted material have been used to train the neural networks that power all the major Generative AI (GAI) models. The application of copyright law to this training is going to be one of the foundational legal and regulatory issues underpinning this type of AI technology. In the EU, with its AI Act, regulators and AI expert groups will decide how to apply copyright law. In the US, a collection of AI copyright lawsuits appear to be moving toward a showdown over AI training and the fair use exception. But there are also complex technical issues at hand. Federal Judge William Orrick, overseeing a case involving image generating services trained on digital artworks, recently issued a ruling in which he explained that he is trying to ascertain how GAI systems work. He will soon learn that AI “hallucinations” show that GAI models are not databases. They do not store and retrieve copies. They “learn” from data and then produce new output. Very often, the output is what the makers expected, but sometimes it is not close. It will be interesting to see how courts react when GAI operators admit they don’t know exactly why their systems produce each output.

Australia Plans to Set 16-Year-Old Age Limit for Social Media Use

Report from Reuters

In Brief – Australia plans to enact a strict age limit of 16 for the use of social media platforms in the country. Prime Minister Anthony Albanese (Labor) said, “Social media is doing harm to our kids and I’m calling time on it” and specifically claimed that girls suffered from harmful depictions of body image, and boys from misogynist content. The Opposition Liberal Party expressed support for the effort. As currently planned, the legislation will not exempt teens who have parental consent or who already have accounts, the companies will be required to implement the systems to keep underage users from accessing their services, and there will not be penalties for underage users who circumvent those systems. The government is currently trialing systems that would use biometrics or government IDs. A representative of the Digital Industry Group, an Australian trade group that includes Meta, TikTok, X and Google, said, “Keeping young people safe online is a top priority” but that cutting off access to leading social media platforms could encourage young people to explore darker, unregulated parts of the internet.

Context – Albanese’s plan for a “world leading” social media age limit follows the September release of legislation to combat online misinformation by giving the Australian communications regulator the authority to police content moderation practices. That proposal is facing strong criticism as an attack on free speech. The country’s previous Prime Minister, Scott Morrison, was often an aggressive critic of tech platforms, spearheading enactment of the 2021 Online Safety Bill that began regulating objectionable content on social media, forcing Google and Facebook to pay Australian media companies when their media content appeared on the platforms, and floating an earlier misinformation bill that fell to complaints of online censorship. On misinformation policing, Australia is now following the EU’s Digital Services Act regime and the UK’s Online Safety Act. But a strict ban on teens under 16 using social media would be a first for western countries.

Canada Orders TikTok to Shut Down Its Canadian Offices But Not The App

Report from the Wall Street Journal

In Brief – Canada has ordered TikTok to shut down its business operations in the country due to national security concerns. The decision followed a government review of the Chinese-owned app. The Canadian Government, like the US and many other Western countries, had already blocked the app’s use on government-issued devices. Despite the order to shut down TikTok’s in-country business operations, the government is not banning the app or blocking Canadians from accessing it. Industry Minister François-Philippe Champagne said, “the decision to use a social media application or platform is a personal choice.” A TikTok spokesperson said that the company would challenge the order in court. Michael Geist, a professor at Ottawa University and a long-recognized expert on internet law and policy, responded to the announcement by noting that shutting down TikTok’s in-country business operations but not the app itself could have the effect of weakening the ability of the government to address risks associated with the app without reducing those risks themselves.

Context – Governments that want to pressure digital platforms to address problems generally start by requiring the platforms to have an in-country presence. They want people employed by the company in the country. Why? Because those are people that the government, including law enforcement, can make in-person demands, and yes, in a pinch, pressure. When police arrest an in-country business executive it gets the attention of executives back at the home office. To see how the dance plays out in real life, when X had its most recent showdown with the Brazilian Supreme Court over demands that the platform block some users, X preemptively shut down its offices in Brazil and got rid of all its in-country employees claiming that they could effectively become hostages. The Brazilian Government then blocked the app from operating in Brazil, demanded that the company restore its in-country presence and comply with all court orders, and only then could the app be turned back on. In short, kicking a foreign company physically out but allowing its online services to still operate is opposite of the norm.

European Commission Opens Formal DSA Investigation of Temu

Report from EuroNews

In Brief – The European Commission has announced a formal investigation of the fast-growing Chinese ecommerce platform Temu under the Digital Services Act (DSA), legislation enacted in 2022 to regulate how digital platforms address illegal and objectional content. Platforms with over 45 million active users in the EU are designated Very Large Online Platforms (VLOPs) and face enforcement by the Commission itself. There are currently 25 VLOPs, including five online commerce marketplaces — AliExpress, Amazon, Shein, Temu and Zalando. Commission regulators are focused on the sale of dangerous and illegal products on Temu, the potentially addictive design of the service, the systems it uses to recommend purchases, and whether researchers have appropriate access to platform data. Consumer groups have long complained about the sale of unsafe products on digital platforms, most recently on Temu and Shein.

Context – Placing the Commission in charge of regulating the VLOPs was a key DSA provision. No more deferring to regulators from small member states under the GDPR’s “one stop shop”. VLOPs also face stricter criteria for dealing with objectionable material. DSA regulators had already opened full investigations of five VLOPs — X, TikTok, Facebook, Instagram, and AliExpress and are questioning Snapchat and YouTube. When the Commission announced its investigation of AliExpress, the first marketplace platform to face added scrutiny, then-Commissioner Thierry Breton reminded everyone that the DSA does not just regulate how platforms deal with “hate speech, disinformation & cyberbullying” but also ecommerce. The DSA, and the EU’s Digital Markets Act, impose ongoing regulation on the digital sector in a manner like financial services or telecoms. With more than one-in-five of the VLOPs now facing formal probes, the next thing to watch for is the level of fines the Commission metes out. The lack of big fines imposed on Big Tech in the early years of the GDPR was a major criticism of that law and a motivation for the Commission-centric DSA and DMA models.

Google Employee Policy on Litigation Comms Challenged by Worker Group

Report from The Verge

In Brief – The Alphabet Workers Union, a non-traditional “minority union” that counts around 1,000 of Google’s 180,000 employees as members and speaks on company policies rather than engage in collective bargaining, has filed a complaint with the National Labor Relations Board (NLRB) claiming that Google management’s request of employees to “refrain” from talking about the company’s search antitrust case violated worker rights. Following the decision of Federal Judge Amit Mehta siding with the US Department of Justice and finding that Google had violated federal antitrust law in protecting its monopoly in general internet search, Google’s General Counsel sent an email directing staff to “please refrain from commenting on this case, both internally and externally.” The worker group calls the request an “overly broad directive” that might chill protected concerted activity, such as employees discussing working conditions. Even though the company email did not include an outright prohibition on speaking about the antitrust case, the NLRB could still determine that it is a violation if it concludes it would likely chill protected employee speech. A Google spokesperson said that the company respects the rights of workers to speak about the terms and conditions of employment and that, “As is standard practice, we’re simply asking that employees not speak about ongoing litigation on behalf of Google without prior approval.”

Context – The topic of unions organizing in Big Tech companies increasingly requires filters to track different developments. A key one is to segregate out organizing by “non-tech” workers. Videogame “game testers”, Tesla “image analysts” who check how automobile camera software labels images, Apple retail store employees, and Amazon distribution center workers, all tend to be hourly employees, not programmers or developers. The biggest real union success with coders is still at the New York Times with the creation of the New York Times Tech Guild. They’ve been engaged in two years of talks over pay equity, work-from-home policies, and performance review processes, went on strike the day before the election.

Special Report

So, the election was not as close as expected. One benefit is that it will not take weeks, or even days, for everyone to agree who won. Trump won. Here’s our snap thoughts on how some top digital policy issues will be impacted.

Issue: Section 230 – President Trump and many conservative Republican leaders have been Sec. 230 critics, often arguing that the largest social media platforms should not be able to use their content moderation procedures or their algorithmic rules to treat different “viewpoints” in different ways. Many Democrats, including President Biden, often criticized social media platforms and Sec. 230 as well, but for very different reasons, often complaining that they did not restrict “objectionable” content enough. Despite years of complaints, the two sides have not come together at the federal level due to those substantive partisan disagreements.

PEI Perspective – Sec. 230 critics and reform champions were big losers. This was the first US election where one of the main social media platforms was not run by leaders with generally progressive perspectives on content moderation. Of course, that’s X. The potentially outsized role of Elon Musk on Trump Administration tech-related policies will have an impact here, hardening the partisan disagreements between Republicans and Democrats over what “the problem” is. And that’s before noting that President Trump now owns his own social media platform. In short, not happening.

Issue: Social Media Regulations to Protect Children – Laws to regulate how social media platforms operate in the context of teen users have been enacted by a growing number of “one-party” states, but they’ve been running into big hurdles in federal court. Bipartisan federal legislation has generated some momentum this summer and the issue was being pushed as a potential bill in a post-election Lame Duck session.

PEI Perspective – Don’t expect online teen safety legislation to be enacted in a Lame Duck session. Senate Republicans will be disinclined to approve policy measures before they retake control of the chamber and President Trump is back in the White House. Also, there will be a Musk effect here too. Instead of legislation, expect continued verbal pressure on the platforms to “protect kids”.

Issue: Big Tech Antitrust Cases – Major federal antitrust cases are underway targeting Google, Apple, Amazon, and Meta. Some started at the end of the first Trump Administration. Only one, the complaint that Google violated federal antitrust law in protecting its monopoly in general search, has reached a conclusion with a DoJ win. It is in the “remedy phase”.

PEI Perspective – In the immediate sense, we see the new Justice Department recommending remedies in the Google search case that are less aggressive than they would have been with a Harris victory. Not a breakup. But don’t expect a quick about-face by the Feds in the other cases, in part because there are state Attorneys General involved who could continue on. But the progressive ideological fire will no longer fuel the federal effort. In addition, it always seemed that President Trump’s view on how to treat companies in the antitrust context was related to how he felt the company treated him. So, there is that to watch.

Issue: Regulation and Tech – President Biden empowered aggressive progressives at key federal regulatory agencies like the FTC, FCC, SEC, CFPB, the Department of Labor, and the DoJ Antitrust Division that influence digital policy on antitrust and mergers, commercial surveillance and privacy, Net Neutrality, Gig Labor, Cryptocurrency, digital payments and more.

PEI Perspective – Expect big changes. While “antitrust” pressure on the tech giants will not go completely away, don’t expect VP Vance’s relatively nice comments about Lina Khan to mean that it’s full steam ahead at the FTC. While the tech giants will continue to face pressure from the Republicans, especially for being too progressive, the Khan/Kanter/Wu antitrust campaign is going to be dialed back. The new FCC majority will not continue forward with a Net Neutrality rule. The new Department of Labor will return to more flexible rules for independent contractors and Gig workers. The NLRB too. A Republican majority at the FTC is not going to mirror the Democrats on “commercial surveillance”.

Issue: AI Regulation – Implementation of the Biden AI Executive Order and the potential for major federal AI legislation.

PEI Perspective –  The “Musk Effect” in the AI regulatory space might prove the most interesting. He has expressed concerns with potential existential threats from AI and appeared sympathetic to some manner of regulation. However, Trump and his campaign were critical of the Biden Executive Order and champion a more hands-off government role. Expect their deregulatory sympathies to win out and that the new Administration will focus on creating a pro-investment and pro-innovation AI climate that they will argue promotes economic growth and national security benefits, especially in relation to the EU and China. Of course, they will say that they are staying on top of potential mega risks.

Issue: EU Tech Regulation (and beyond) – In the four years of the Biden Administration, the EU enacted, and is now implementing, an unprecedented digital regulatory regime, as well as ramping up enforcement of the GDPR, and enacting their AI Act. The UK has pursued a similar set of laws, although more slowly and with more structured regulatory processes. Japan, South Korea, India and Brazil are also legislating and regulating. The progressive wing of the Democratic Party, including many in the Biden Administration, were EU cheerleaders and clearly wished they could do similar things in the US.

PEI Perspective –  No more cheerleading. Instead, expect some confrontation, acrimony, and threats. The difference between how Trump and Biden dealt with Digital Services Taxes and global corporate tax reform may offer the best forecast. The new Trump Administration may again sometimes threaten trade and tariff retaliation in response to foreign regulatory actions that American tech companies consider discriminatory. We may soon see how Musk, and potentially Trump, react to EU penalties being imposed on X fir violating the EU’s Digital Services Act.

Issue: TikTok – It was President Trump who first proposed in 2020 that ByteDance should divest from TikTok in the US. Finally, in 2024, Congress enacted legislation to force it. Then, during this year’s campaign, Trump had a different take, opposing a TikTok ban.

PEI Perspective –  Back in 2021, the Biden Administration withdrew from the federal litigation started by the Trump Administration in 2020. Something similar might happen again. However, there are some very hardcore Republican China Hawks in the Congress and TikTok was more widely used by Democratic candidates in the campaign. The federal courts, and eventually the Supreme Court, are probably still in the driver’s seat.

If you have any questions regarding any of this, please send it over in an email, either by replying to this message or otherwise typing into your email service.

Microsoft Accuses Google of Kicking Off “Astroturf” Cloud Coalition in EU

Report from CNBC

In Brief – Rima Alaily, the top antitrust lawyer on the Microsoft legal team, has posted a highly unusual public blog accusing Google of running extensive “shadow campaigns” designed to discredit the software giant with regulators in major global markets. She highlighted the upcoming European launch of the Open Cloud Coalition which is described in a document allegedly shared with prospective members as advocating for “a fair, competitive and open cloud services industry across the UK and EU” but which the Microsoft official described as an “astroturf” organization funded by Google to use EU-based cloud services providers as the “public face” of continued efforts to pressure EU antitrust regulators to challenge Microsoft’s practices linking its top software services with its cloud services business. Alaily added that Google has been funding, directly and indirectly, similar lobbying coalitions and many industry commentators and academics to criticize Microsoft on other issues as well, including software licensing, cybersecurity, and business operations in China. She attributed Google’s efforts to its desire to distract attention from its own antitrust challenges in Europe and the United States. A Google spokesperson noted that the company has been very public about its concerns with Microsoft’s cloud licensing.

Context – The Microsoft v Google public policy feud was in high gear by 2010, but the two companies announced a highly unusual public truce on legal and regulatory issues in 2016 which came together as new CEOs running both companies. Seriously, when corporate titans dial back their legal, lobbying, “grassroots” and communications proxies, they tend to do it in the shadows because that’s where the campaigns always operated. Soon, the top tech company feud pitted Apple and Meta, fueled by the antipathy between their CEOs. Back at the ranch, the same CEOs of Microsoft and Google are still in charge but their truce was over by 2023, with Microsoft publicly criticizing Google as it faced competition complaints in many top markets. Both sides are certainly not short of resources to spend on their battles.

School Districts’ Social Media Addiction Lawsuits Can Proceed

Report from Bloomberg

In Brief – Federal Judge Yvonne Gonzalez Rogers is allowing a coalition of over a hundred school districts to proceed with their lawsuits alleging that the major social media platforms operated by Meta, Google, Snap, and TikTok, were knowingly addictive and harmful to teen users and failed to warn of the risks. Her most recent order, which builds on a series of her rulings in similar social media-related cases, including one earlier in October that allowed a coalition of State Attorneys General to continue with lawsuits against Facebook and Instagram, dismisses some parts of the school districts’ complaints due to the protections afforded by Sec. 230 of the Communications Decency Act when a platform feature deals with third-party content, but is allowing claims focused on other platform features and policies to proceed. In the lawsuits brought by school districts, the social media platforms also argued that the alleged injuries to the school systems are too remote to address, an argument that largely prevailed in similar lawsuits in California state court earlier this year, but Judge Rogers disagreed, finding the harms alleged were “distinct and borne exclusively by the school districts”.

Context – The same allegations that are powering the vast collection of social media lawsuits being handled by Judge Gonzalez Rogers, are also powering a growing number of state laws regulating the platforms. The lawsuits are having more luck than the new laws, which are pretty much all being blocked by federal judges, especially for running afoul of the First Amendment. One major question in all the litigation is going to be whether there is solid evidence of a causal link between teen social media use and negative mental health, as opposed to just a correlation. The federal judge who recently blocked Utah’s law to protect teens from social media noted in his ruling that evidence of a causal link is lacking. While Rogers appears very sympathetic to the presumption that social media platforms do harm young users, she added, “Causation issues are going to be critical.”