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Industry Leaders Urge Biden to Tread Lightly With Federal Privacy Legislation

While generally supportive of a federal privacy law, some experts warned it could harm competition.

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Screenshot of Jules Polonetsky, executive director of the Future of Privacy Forum

WASHINGTON, January 27, 2023 — While there is a need for federal privacy regulation, such legislation could harm innovation, research and competition if not carefully designed, according to leaders of top technology trade associations and think tanks.

“In my opinion, there’s a lot of overblown statements about how bad the problems are,” said Rob Atkinson, president of the Information Technology and Innovation Foundation. “And a lot of the regulatory solutions… would actually, in our view, do more harm than good.”

Speaking at a panel hosted by the ITIF on Wednesday, industry experts responded to President Joe Biden’s recent op-ed calling on Congress to unite against Big Tech companies in three areas of concern: privacy, content moderation and competition.

“It’s gotten to this amazing point where we have a lot of the world’s most dominant tech companies, and to see a headline about uniting against Big Tech by the President of the United States, it hurts me greatly,” said Gary Shapiro, president and CEO of the Consumer Technology Association.

One of Biden’s policy recommendations was to place limitations on targeted advertising and ban the practice altogether for children. But Atkinson disagreed with the implication that targeted advertising is an inherent violation of privacy.

“Targeted advertising is almost always done in an anonymous way where the advertiser doesn’t know my name — they just know that I like to ride my bicycle to work, and so they send me a bicycle ad,” he said.

Despite concerns about the extent of certain proposals, the tech leaders were generally supportive of federal privacy legislation. “It’s incredible that the U.S. is one of the very few democracies in the entire world that does not have a comprehensive privacy law,” said Jules Polonetsky, executive director of the Future of Privacy Forum.

A proposed federal privacy law gained strong bipartisan support toward the end of 2022, but disagreements over two key issues have threatened its progress, explained TechNet CEO Linda Moore.

The first is private right of action, which Moore said was important to “make sure we protect those small and medium-sized companies from frivolous lawsuits that will drive them out of business.”

The second disagreement is over whether the federal law should preempt state privacy laws.

Steve DelBianco, executive director of NetChoice, emphasized the need for a “national standard to replace an impossible patchwork of state laws.”

“If the President is serious about data privacy, he should support the preemption of state laws and the presumption of private right of action,” DelBianco said.

Strict European privacy regulation can provide both guidance and caution

Polonetsky pointed to the European Union’s General Data Protection Regulation, often considered to be the world’s strongest privacy law, as a potential guide for U.S. legislation.

“For years, I would have said no — let’s show the American way to do it,” he said. “But now that we’ve tried to do the American way and made a bit of a jumble in many of our proposals, I have new appreciation for the thought that went into GDPR.”

But in addition to appreciating what the GDPR got right, policymakers should also look carefully at the ways in which it may have overly restricted research, Polonetsky added.

Atkinson emphasized that caution, saying that the GDPR’s “important and useful components” did not outweigh the negative impacts of its research limitations.

The implementation of GDPR also had negative implications for competition, Moore said. “The largest companies gained market share, because the smaller and medium sized companies just couldn’t adapt to the new privacy regime and all the hurdles that are put in place.”

Pursuing the strictest possible privacy standard could result in barring all data sharing and interoperability — things that are “necessary for competition,” Polonetsky claimed. “We need an understanding of the balance and the conflicts which do exist between competition and privacy.”

Privacy law is also closely intertwined with Section 230, Polonetsky said. “It’s clear that any significant change to 230 means companies doing an awful lot of surveillance to track things that are said and posted and done.”

Broadband Breakfast’s Big Tech & Speech Summit will feature panels on each of the issues identified in Biden’s op-ed. Learn more and register here.

Reporter Em McPhie studied communication design and writing at Washington University in St. Louis, where she was a managing editor for the student newspaper. In addition to agency and freelance marketing experience, she has reported extensively on Section 230, big tech, and rural broadband access. She is a founding board member of Code Open Sesame, an organization that teaches computer programming skills to underprivileged children.

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Broadband's Impact

CES 2024: Industry Wants Federal Data Privacy Law

The current patchwork of state laws makes compliance difficult, said representatives from T-Mobile and Meta.

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Photo of the panel by Jake Neenan

LAS VEGAS, January 12, 2024 – Industry stakeholders called for federal data privacy legislation at CES on Thursday.

“I think oftentimes companies can be in the position of opposing additional regulation at the federal level,” said Melanie Tiano, director of federal regulatory affairs at T-Mobile. “But this is probably one of those areas where that’s not the case, in part because of the flurry of activity going on at the state level, which makes compliance in the U.S. marketplace extraordinarily confusing and difficult.”

The New Jersey legislature cleared one such bill on Monday. If that’s signed into law by the state’s governor, it would bring the number up to 13. Federal efforts, notably the American Data Privacy and Protection Act, have stalled in recent years.

“We will continue to be seriously committed to getting legislation done in a bipartisan way. That’s not always easy right now, but we’re continuing to work on that” said Tim Kurth, chief counsel for the House Innovation, Data and Commerce Subcommittee.

Simone Hall Wood, privacy and public policy manager at Meta, said “privacy regulation should not inhibit beneficial uses of data.” The company has argued it has a legitimate interest in data use practices that the European Union has found to be out of compliance with its data privacy law, the GDPR.

Industry groups, including the Consumer Technology Association, which runs the CES conference, have advocated for a light-touch privacy law in the United States, in contrast with the more comprehensive European standard.

Kurth had similar thoughts Thursday, saying the GDPR “really hurt startups and really hurt innovations.”

Still, Woods said establishing a uniform standard is something the law does well.

“It sets certainty across the marketplace for what privacy protections look like for consumers. And so that aspect of it is positive,” she said.

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Broadband's Impact

CES 2024: Biden Administration Announces Deal with EU on Cyber Trust Mark

The White House is looking to get the mark on products “by next year.”

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Deputy National Security Advisor for Cyber and Emerging Technologies Anne Neuberger at CES.

LAS VEGAS, January 11, 2024 – The United States has entered an agreement with the European Union on a “joint roadmap” for standardized cybersecurity labels, a Biden Administration official announced at CES on Thursday.

“We want companies to know when they test their product once to meet the cybersecurity standards, they can sell anywhere,” said Anne Neuberger, the White House’s deputy national security advisor for cyber and emerging technologies. “They can sell in Paris, Texas, or Paris, France.”

Neuberger said the White House is aiming to get its U.S. Cyber Trust Mark, a voluntary certification for internet of things devices, on consumer products by the end of the year. The effort to mark products like routers, baby monitors, and thermostats as safe from hacking was first announced in October 2022.

The Federal Communications Commission voted in August to seek comment on how to implement various parts of the program, including how to develop and ensure compliance with its cybersecurity standards.

What exactly those standards will be is not yet decided, but the Commission has said it will base the program on criteria developed by the National Institute of Standards and Technology. Those  include encrypting both stored and communicated data and the ability to receive software updates.

The measure is not on the FCC’s tentative January meeting agenda, but Neuberger said the agency is “working toward next steps.”

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Robocall

CES 2024: FCC and AT&T Say Collaboration is Key in Combatting Spam

The Commission has been aggressive on spam this year, and AT&T has been working to improve filters on its networks.

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Photo of the panel by Jake Neenan

LAS VEGAS, January 10, 2024 – Members of the telecom industry and the Federal Communications Commission emphasized the need for industry and government entities to collaborate in combating scam calls and texts at CES on Tuesday.

“Collaboration is key here,” said Amanda Potter, assistant vice president and senior legal counsel for AT&T.

Current measures

Alejandro Roark, chief of the FCC’s Consumer and Government Affairs Bureau, noted Federal Trade Commission data showing American consumers reported losing $790 million to scam calls and another $396 million to scam texts in 2022.

The Commission took action on preventing both in 2023, expanding its STIR/SHAKEN regime – a set of measures to confirm caller identities – to all providers who handle call traffic, moving to block call traffic from non compliant providers, and issuing multiple fines in the hundreds of millions. Almost every state has entered an agreement with the agency to collaborate on robocall investigations.

In addition, the FCC adopted its first robotext rules and moved to tighten those rules in December, closing the “lead generator loophole” by requiring affirmative consent for companies to send consumers marketing messages. Comments are being accepted on a proposal to institute a text authentication scheme.

For AT&T’s part, Potter said the company has instituted network filters to block messages that are likely to be illegal.

“We’re not going to claim success by any means, but when we have these robust network defenses, that does a lot,” she said, citing a total of 1 billion blocked texts on the company’s networks in July 2023.

AT&T also worked with manufacturers on features allowing consumers to report text as junk when deleting messages, which Potter said has provided extra data to tune spam filters.

What’s next

“We start from a standpoint of maximum flexibility when it comes to messaging,” Potter said, in contrast to voice calls, which are more tightly regulated and required FCC intervention for providers to block. 

“I’m concerned about that being taken away, or perhaps regulation being something of a distraction,” she said.

Roark agreed on flexibility being superior to regulation, although the Commission is moving forward with its proceeding on more expansive text authentication rules. The proposed rules include requiring more providers on the traffic chain to block texts from numbers flagged as scammers by the FCC and requiring measurers to verify the identity of texters, similar to the STIR/SHAKEN system for caller authentication.

The FCC is also taking comments on how AI factors into robocalls and robotexts, both how it’s used to perpetrate them and how the Commission might use AI tools to combat them.

At a House oversight hearing in November, FCC Chairwoman Jessica Rosenworcel asked Congress for the authority to collect the fines the Commission imposes – a job currently left to the DOJ – and access to more financial information to help the agency’s robocall prevention efforts.

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