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The Technology 202

A newsletter briefing on the intersection of technology and politics.

Will the U.S. follow the E.U. playbook to crack down on Silicon Valley giants?

The Technology 202

A newsletter briefing on the intersection of technology and politics.

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Welcome to Tuesday and The Technology 202! Take a breather, there's only two big congressional tech hearings today.

Below: Advocates are dialing up calls for the FTC to craft new rules on “surveillance advertising,” and the latest Facebook fallout. First things first:

Will the U.S. follow the E.U. playbook to crack down on Silicon Valley giants?

A high-stakes meeting between Biden administration officials and European Union leaders this week may offer a glimpse into how closely the White House will align its approach to reining in American tech giants with the E.U.’s aggressive plan. 

The two sides are set to meet Wednesday in Pittsburgh for the first joint meeting of the U.S.-E.U. Trade and Technology Council, a bilateral initiative aimed at boosting cooperation on tech issues and “updating the rules for the 21st century economy.”

Senior administration officials, who spoke to reporters under the condition of anonymity to preview the summit, said the talks will touch on two E.U. proposals known as the Digital Markets Act and the Digital Services Act that seek to curb the power of U.S. tech giants. 

Critics say companies like Amazon, Google and Facebook serve as “gatekeepers” to the digital economy and have the power to squelch potential rivals. One of the E.U.’s proposals aims to address those concerns by slapping more restrictions on the tech giants’ business practices, while the other creates tighter rules for how social media companies handle illegal content.

But critics of the measures, including groups backed by the tech giants, say they would put U.S. tech companies — some of the most successful economically in human history — at an unfair disadvantage to their foreign competitors, who wouldn’t have the same legal obligations. 

That creates a dilemma for the Biden administration, which has also pushed to rein in dominant tech platforms but resisted some other efforts by European policymakers to target only American companies with new regulations. 

One senior administration official said they are “sharing with the Europeans a number of specific concerns and recommendations they have” about the proposals. Officials did not elaborate on the specifics of their requests, but the summit could illuminate where the two sides diverge.

The official said the administration sees room for cooperating with the E.U. on competition issues, but they also believe “there’s sort of a right way to do this and a way to do this that might have some unintended overbroad consequences.”

The debate of how narrowly to craft regulations to target the tech giants, the biggest and most powerful of which are largely American, is also at the center of the debate raging on Capitol Hill of whether to revamp U.S. antitrust laws. 

A bipartisan coalition of House lawmakers is pushing to pass a major package of antitrust bills that focus squarely on tech giants like Google, Apple, Facebook and Amazon, but other lawmakers on both sides of the aisle have pushed back on that approach. (Jeff Bezos, who founded Amazon, owns The Washington Post.) 

While leaders at the Federal Trade Commission, an independent agency that polices digital competition issues, have voiced deep concern about the gatekeeping power of U.S. tech giants, it's unclear to what extent the White House believes new laws should expressly target them. If it weighs in more forcefully, it could have big implications both domestically and internationally.

“That kind of two-way conversation to see where objectives align, and where they don't align, can be a really valuable part of the TTC,” said Aaron Cooper, vice president of tech trade group BSA, which counts AWS, IBM and Intel as members.

Other agenda items senior administration officials said are expected to come up at the summit include the shortage of semiconductor chips, the resilience of global supply chains and “clean” technology. 

How to create ethical artificial intelligence technology will be another point of discussion. The transatlantic council will be “undertaking a joint study looking at potential jobs and economic impacts” of artificial intelligence, one official said, and the two sides will “work together to develop AI technologies that enhance privacy protections.”

Agency scanner

Groups are urging the FTC to seize greater powers to rein in data abuses by Big Tech

Democratic lawmakers and advocacy groups are dialing up calls for the FTC to assert more of its power to rein in alleged abuses by big tech companies that collect, use and sell consumer data. 

Nine Senate Democrats last week called on the agency to launch what’s called a rulemaking process on privacy, which could give the agency greater leeway to set and enforce regulations around how companies are using consumer data. 

Accountable Tech, a progressive tech advocacy group, is urging the FTC in a new petition to write new rules to prohibit what it calls “surveillance advertising” — or the pervasive use of hyper-targeted ads by dominant tech platforms. 

The filing, shared exclusively with The Technology 202, argues that the practice amounts to an “unfair method of competition” that serves to entrench tech giants like Google and Facebook. And it's already got allies on Capitol Hill.

“I urge the FTC to initiate a rulemaking to ban surveillance advertising, as a petition filed with the Commission [last week] recommends," said Rep. Anna Eshoo (D-Calif.), who is planning to introduce legislation to “ban surveillance advertising” in the coming weeks.

Eshoo added, “This pernicious practice allows online platforms to chase user engagement at great cost to our society, and it enables online disinformation, discrimination, voter suppression, privacy abuses, and so many other harms.”

It’s the latest instance of liberal lawmakers and their allies putting pressure on the FTC to use more of the tools at its disposal to crack down on alleged misconduct by Silicon Valley behemoths. 

Those campaigns are picking up steam at the moment in lieu of congressional efforts to pass a federal privacy law, which continue to languish. The FTC declined to comment.

“Everyone is interested in figuring out where they can drive forward some real progress, and so I think that that is obviously one motivating factor,” said Jesse Lehrich, co-founder of Accountable Tech and a former Hillary Clinton aide.

Lehrich argued that while the FTC has “capacious” authority to craft its own rules around privacy practices, it’s often declined to do so, leaving the companies’ practices at times unchecked.

Expect pushback from tech industry groups and Republicans, who have resisted attempts to dramatically expand the FTC’s rulemaking authority, citing concerns about government overreach and a lack of federal privacy standards set by Congress.

But advocates are hoping the calls will resonate with the new leadership at the FTC, including Chair Lina Khan — a prominent big tech critic. It could also soon include Alvaro Bedoya, a prominent critic of tech companies’ data practices who has been tapped for the agency.

Our top tabs

Facebook suspended plans to build Instagram Kids app, but lawmakers want it to completely abandon the project

Instagram head Adam Mosseri said the company would put the project on hold to listen to concerns and “demonstrate the value and importance of this project for younger teens online today,” Aaron Gregg and Elizabeth Dwoskin report. Top lawmakers from both parties, including Sen. Richard Blumenthal (D-Conn.), who chairs the Senate Commerce Committee's consumer protection subcommittee, and Rep. Ken Buck (R-Colo.), the top Republican on the House Judiciary Committee’s antitrust panel, say that doesn’t go far enough.

The issue is bound to be a focus of a Senate Commerce Committee hearing Thursday. The hearing will focus on Facebook, Instagram and their effects on teenagers. Facebook executive Antigone Davis plans to testify.

Facebook plans to publish two slide decks referenced in Wall Street Journal reports on the company, Engadget’s Karissa Bell reports. The company did not say when they will be published.

Regulators in the United Kingdom approved Facebook’s purchase of Kustomer

The United Kingdom’s Competition and Markets Authority said the deal “does not give rise to a realistic prospect of a substantial lessening of competition” in United Kingdom markets, Bloomberg’s Katharine Gemmell reports. Antitrust regulators in the United States and Europe are still reviewing the deal, which reportedly valued customer-service software company Kustomer at $1 billion.

“We welcome the CMA’s decision, which shows that this deal is good for competition,” Facebook said. “We will continue to cooperate with other regulators around the world in their ongoing reviews.” 

Rant and rave

Twitter had a range of reactions to Facebook's pause on the version of Instagram it was designing for children. Rachel Richardson, Snapchat's former head of editorial:

Others weighed in on the decision. Alex Stamos, Facebook's former chief security officer, who is the director of the Stanford Internet Observatory:

Some parsed a video Mosseri posted about the decision. Writer Charlie Warzel:

Inside the industry

Section 230’s lefty defenders are lawyering up (Protocol)

Amazon to Defend Firing of Workers Following Complaint (Wall Street Journal)

TikTok hits 1 billion monthly active users globally - company (Reuters)

Trending

Cryptocurrency expert pleads guilty to conspiring to help North Korea dodge sanctions (Shayna Jacobs)

Microsoft CEO says failed TikTok deal 'strangest thing I've worked on' (Reuters)

Mentions

  •  The Chamber of Progress has named Elizabeth Banker, formerly of the Internet Association, as its Vice President of Legal Advocacy.
  • The Wikimedia Foundation has named Rebecca MacKinnon as its first Vice President for Global Advocacy. 

Daybook

  • Government officials speak on the second day of the four-day International Wireless Communications Expo today.
  • A House Science Committee panel holds a hearing on researching disinformation on social media today at 10 a.m.
  • The House Judiciary Committee's antitrust subcommittee holds a hearing on modern antitrust policy today at 10 a.m.
  • The Senate Homeland Security and Governmental Affairs Committee holds a hearing on replacing legacy government IT systems today at 2:30 p.m.
  • Commerce Secretary Gina Raimondo, FCC acting chairwoman Jessica Rosenworcel, Sen. Edward J. Markey (D-Mass.) and Sen. John Thune (R-S.D.) speak at CTIA’s two-day 5G Summit, which begins Wednesday.
  • The Senate Commerce Committee holds a consumer privacy hearing Wednesday at 10 a.m.
  • Customs and Border Protection and Department of Homeland Security officials discuss facial recognition technology at a Center for Strategic and International Studies event Wednesday at 3 p.m.
  • Facebook global head of safety Antigone Davis testifies before a Senate Commerce Committee panel Thursday at 10:30 a.m.
  • FTC Commissioner Rebecca Kelly Slaughter speaks at the National Advertising Division’s 2021 conference Friday at 11 a.m.

Before you log off

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