Calibra head David Marcus on Wednesday avoided committing Facebook to a moratorium on its cryptocurrency plans (see 1907150051), despite repeated calls from House Financial Services Committee Democrats at a hearing. Afterward, Chairwoman Maxine Waters, D-Calif., told us Marcus would leave Capitol Hill understanding her committee is serious about blocking the project until concerns are resolved. “We have oversight responsibility, and we’re going to live up to our responsibility,” she said.
Karl Herchenroeder
Karl Herchenroeder, Associate Editor, is a technology policy journalist for publications including Communications Daily. Born in Rockville, Maryland, he joined the Warren Communications News staff in 2018. He began his journalism career in 2012 at the Aspen Times in Aspen, Colorado, where he covered city government. After that, he covered the nuclear industry for ExchangeMonitor in Washington. You can follow Herchenroeder on Twitter: @karlherk
Facebook’s cryptocurrency project Libra provides more incentive for Congress to pass comprehensive privacy legislation, Senate Banking Committee Chairman Mike Crapo, R-Idaho, told reporters Tuesday, after testimony from Facebook Calibra Head David Marcus. The platform won’t offer Libra until it receives proper approvals from U.S. and foreign regulators, Marcus told the committee, as expected (see 1907150051). Libra’s goal is to offer a secure, safe and low-cost way for people to transfer money internationally, he said, arguing a U.S. company should lead the push.
Increased tech sector concentration is killing innovation, said House Antitrust Subcommittee Chairman David Cicilline, D-R.I. During Tuesday's hearing with Amazon, Apple, Facebook and Google, he cited examples of each company engaging in anticompetitive behavior to privilege their platforms. It was the second hearing on the topic since the House Judiciary Committee announced a bipartisan tech industry investigation (see 1906110072).
Facebook won’t offer its digital currency Libra until the company receives the “appropriate approvals” and all regulatory concerns are “fully addressed,” Calibra Head David Marcus is expected to tell the Senate Banking Committee Tuesday (see 1907050025). He anticipates the most “careful pre-launch oversight by regulators and central banks in FinTech’s history,” according to his prepared remarks. Facebook doesn’t expect Calibra, the subsidiary leading the project, to “make money at the outset.” The Libra Association, a 28-company group managing the project, doesn’t plan to compete with “any sovereign currencies,” he wrote. House Financial Services Committee Chair Maxine Waters, D-Calif., voiced concern about Libra competing with the dollar. The association “will work with the Federal Reserve and other central banks to make sure Libra does not compete with sovereign currencies or interfere with monetary policy,” Marcus said. If the U.S. doesn’t lead the digital currency market, foreign entities with far different values could take control, he wrote. The Treasury Department has “very serious concerns” about digital currencies like Libra being misused by money launderers and terrorism financiers, Secretary Steven Mnuchin said Monday, calling it a “national security issue.” Facebook will be subject to the same safeguard requirements as traditional financial institutions, he added. The platform's “dismal track record on data privacy makes its proposal to launch Libra a dangerous liability at home and abroad,” the Open Markets Institute said Monday. Congress and the Federal Reserve should block non-sovereign currencies like Libra and consider offering its own digital currency, the group said. The risks of Libra are “too great to allow the plan to proceed,” Public Citizen President Robert Weissman is expected to tell the committee. Libra raises questions that regulators aren’t prepared to address about national sovereignty, corporate power, consumer protection, competition policy, monetary policy and privacy, Public Citizen wrote.
It’s not legitimate to claim Silicon Valley is biased against conservatives, Rep. Ro Khanna, D-Calif., said in an interview on C-SPAN's The Communicators set to have been televised this weekend. President Donald Trump offered anecdotal evidence of social media’s anti-conservative bias at a White House summit Thursday (see 1907110066).
The FTC should remain the U.S. privacy enforcer but needs more resources, House Consumer Protection Subcommittee ranking member Cathy McMorris Rodgers, R-Wash., told us Thursday. Two House Democrats from California are contemplating draft legislation that would replace it with a new data privacy agency. A prospective privacy bill will need bipartisan, bicameral support to pass, she said after an appearance at a U.S. Chamber of Commerce event.
President Donald Trump offered anecdotal evidence of social media bias and alleged throttling of his followers and activity on Twitter. Speaking Thursday to hundreds of invitees at his Presidential Social Media Summit (see 1907100040), he cited dramatic fluctuations of follower counts and Twitter interaction. “It would be like a rocket ship when I put out a beauty,” he said, claiming nowadays it takes him 10 times as long to gain 100,000 followers.
The White House’s coming summit on Silicon Valley’s alleged anti-conservative bias (see 1906260070) seems like an attempt to intimidate companies into bending to the administration’s will, said Computer & Communications Industry Association CEO Ed Black Wednesday. Social media sites shouldn’t be forced to be neutral on hate or religious intolerance, he said: “If those airing grievances at this week’s meeting are unsatisfied with one company’s policy against objectionable content, there are plenty of competitors from which to choose.”
Tech companies should be required to follow industry-written best business practices for protecting children’s online safety to “earn” Section 230 liability protections, said Senate Judiciary Committee Chairman Lindsey Graham, R-S.C. That portion of the Communications Decency Act gives websites immunity from liability for the third-party content they host. Congress has chipped away at that immunity, including with anti-sex trafficking legislation passed in 2018 (see 1806290044).
The Senate Commerce Committee’s lead privacy negotiations will be limited to the two party leaders for now, Chairman Roger Wicker, R-Miss., told reporters Monday about his talks with ranking member Maria Cantwell, D-Wash. Meanwhile, Sen. Jerry Moran, R-Kan., confirmed (see 1907010058) to reporters that he’s hopeful the entire privacy group can strike a deal, but he’s open to moving forward bilaterally with Sen. Richard Blumenthal, D-Conn. “Knowing that Sen. Wicker and the ranking member will have a lot of say ultimately, we’re still interested in reaching a conclusion among us," Moran said. "This issue is too important. We’ve come too far for us not to continue to see if we can reach a conclusion that we and maybe several others agree on.” Blumenthal told us he continues to have discussions with all individuals involved in Commerce group talks: “I think the group will form a consensus, and that’s my hope.” Wicker told reporters: “Sen. Cantwell and I are going to proceed just the two of us, and we’ll probably be getting back to some people. But for now, it’s sort of us in the room.” He expects to speak with Cantwell about the topic this week. Asked if they’ll incorporate work from the group, Wicker said, “There’s a nice foundation to go off.” Wicker and Cantwell are “having some discussions on their own, and that’s fine,” Senate Majority Whip John Thune, R-S.D., told reporters. “Hopefully, we’ll be able to dovetail with those. … I think the group will continue to be utilized because there’s been so much work done” from Republicans and Democrats dating back to last session, when Thune led hearings on the topic.