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The Technology 202

A newsletter briefing on the intersection of technology and politics.

The verdict is still out on Europe’s new digital rulebook

The Technology 202

A newsletter briefing on the intersection of technology and politics.

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Below: Two top senators call for a probe into TikTok's “deception,” and the Justice Department makes a key hire. First:

The verdict is still out on Europe’s new digital rulebook

The European Parliament on Tuesday approved the Digital Services Act and Digital Markets Act, two landmark proposals to rein in how the tech giants moderate content and treat competitors — setting a new standard for digital regulation while similar proposals in Washington languish. 

Together, the measures would force the world’s largest tech companies to more aggressively tackle harmful content, disclose more data to external researchers and make their services interoperable with competitors’ products. They would also prohibit large companies from giving their own products preferential treatment and block app stores from requiring that developers use their payment systems. 

But questions remain about how regulators will police the standards, and whether they'll be able to avoid similar hurdles that have plagued their watershed privacy regulations.

Critics have argued that enforcement of the E.U.'s privacy rules, the General Data Protection Regulation (GDPR), has been too reliant on individual countries that may be unable or unwilling to bring significant cases against violating companies. 

“In GDPR, the problem that they face is that enforcement is pushed out to the member states, and only given that the states that have essentially primary jurisdiction over a company,” Alan Butler, executive director of privacy group EPIC, told me during an interview. 

One top E.U. official, European Data Protection Supervisor Wojciech Wiewiórowski, has echoed some of those concerns, particularly regarding oversight of the tech giants. 

“I myself share views of those who believe we still do not see sufficient enforcement, in particular against Big Tech,” he said at a conference on GDPR enforcement last month.

Karen Kornbluh, a senior fellow at the German Marshall Fund and former U.S. ambassador, said that it’s clear the E.U. is trying to address those issues in its new policies, but it will be a “steep hill” to overcome.

“They’re trying to learn the lessons from GDPR, but that being said, it’s complicated to move from a national-level regulatory system to a commission-level regulatory system and to coordinate all that,” she said. 

How the Commission staffs up will be key, Kornbluh said, particularly as tech companies likely look to bring in more expertise to comply with the new regulations. 

“There’s going to be sort of an arms race of hiring in industry and the Commission, and I think it’s the end of the beginning, not the beginning of the end by any stretch,” she said.

In a bid to address those concerns, European Commissioner for the Internal Market Thierry Breton previewed how the bloc will uphold the two laws in a blog post Tuesday.

Breton said that E.U. member countries will each “have a regulator with the necessary powers to enforce the rules,” in addition to the bloc’s “specialised teams” that will “centrally supervise” the tech giants, which face greater obligations than smaller companies under the rules. One key team, he said, will “ramp up recruitment next year” to reach “over 100 full time staff” in 2024.

“It’s really interesting, but it remains to be seen how that will work,” Kornbluh said.

Breton also said that the enforcement efforts will be funded in part by the companies themselves, who will “cover the additional costs needed for their supervision.”

The debate mirrors the one now unfolding over data privacy on Capitol Hill, where key lawmakers are trading barbs about which bill offers the most robust enforcement.

A trio of congressional leaders recently unveiled a national privacy bill that would be enforced by both regulators at the Federal Trade Commission and state attorneys general, while also allowing individuals to sue companies directly if officials do not act. 

But Sen. Maria Cantwell (D-Wash.), chair of the key Senate Commerce Committee, has criticized the proposal for blocking consumers from filing lawsuits until four years after a violation has occurred and requiring them to notify regulators before doing so. 

Republicans oppose giving consumers a broad right to bring lawsuits against companies, known as a private right of action, but have struck a deal with Democrats that would allow for a narrow right of action in exchange for the bill overriding comparable state-level privacy laws. 

Butler argued that the combination of federal oversight, state enforcement and individual lawsuits makes enforcement of the latest U.S. privacy proposal tougher than GDPR. 

“I think that ultimately the three-tiered enforcement is stronger than GDPR,” he said. 

The remarks suggest that while the U.S. may be behind the E.U. in crafting rules on issues like privacy, it could still beat Europe to the punch in figuring out how to fully uphold them.

Our top tabs

Senate Intel chiefs urge FTC to probe ‘deception’ by TikTok

The leaders of the Senate Intelligence Committee on Tuesday called on Federal Trade Commission Chair Lina Khan to investigate reports that U.S. user data on TikTok was repeatedly accessed in China, a revelation that reignited security concerns over the popular video-sharing app. U.S. lawmakers have long expressed concern at the prospect of Chinese government officials gaining or seizing information on U.S. users through the app, owned by Beijing-based tech giant ByteDance.

Chair Mark R. Warner (D-Va.) and Vice Chair Marco Rubio (R-Fla.) urged the agency to probe the company “on the basis of apparent deception by TikTok” regarding its practices. The senators wrote that recent reports “suggest that TikTok has also misrepresented its corporate governance practices, including to Congressional committees such as ours.” The FTC declined to comment.

Last week, a group of Republican senators decried the recent disclosures and demanded answers from the company in a separate letter. In response, TikTok confirmed to the lawmakers that employees in China can access U.S. user data after clearing security protocols, Bloomberg News reported. In a rare interview Sunday on CNN, TikTok's head of public policy for the Americas Michael Beckerman said the company has “never shared information with the Chinese government, nor would we.”

In a statement, TikTok spokesperson Brooke Oberwetter said, “For two years, we've talked openly about our work to limit access to user data across regions, and in our letter to senators last week we were clear about our progress in limiting access even further.”

Twitter sues over India's blocking orders

The social network is challenging blocking orders issued by the Indian government, TechCrunch's Manish Singh reports

“In its lawsuit, filed Tuesday in the Karnataka High Court in Bengaluru, Twitter alleges that New Delhi had abused its power by ordering it to arbitrarily and disproportionately remove several tweets from its platform,” according to the report. 

As the Verge's Russell Brandom wrote, the move marks “the latest salvo in an ongoing fight over the country’s aggressive speech laws.” The company was ordered to remove posts Indian authorities said violated their obscenity and defamation laws. Twitter removed the posts but is seeking protection from future orders.

DOJ taps Microsoft alum as top antitrust economist

Stanford University professor and former Microsoft staffer Susan Athey is joining the Justice Department as its top antitrust economist, Bloomberg's Leah Nylen reports.

“Athey, an expert on the economics of internet platforms — particularly search engines and online advertising — joins the Justice Department as it prepares for trial against Alphabet Inc.’s Google and is pursuing an investigation of Apple Inc. and another Google case,” Nylen reports.

Due to her past work, “Athey is likely to be recused from the Justice Department’s Google and Apple cases,” according to the report.

Inside the industry

How Wall Street Escaped the Crypto Meltdown (New York Times)

Tesla is no longer the world's largest EV producer (Axios)

Competition watch

Microsoft's $69 billion Activision takeover faces competition probe in the UK (CNBC)

Amazon, Microsoft, Google Strengthen Grip on Cloud (Wall Street Journal)

Privacy monitor

Federal Patient Privacy Law Does Not Cover Most Period-Tracking Apps (ProPublica)

UK signs its first data sharing deal post-Brexit, with South Korea (TechCrunch)

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