Republicans and Democrats at the FTC still appear divided over what remedies should be included in the agency’s potential privacy settlement with Facebook (see 1905130031), tech observers said in interviews this week. They disagreed whether the agency is taking an unprecedented amount of time to settle, especially considering the probe could include violations beyond the Cambridge Analytica breach (see 1803260039). There's disagreement if the agency should hold CEO Mark Zuckerberg personally liable for his platform’s privacy miscues.
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
The Senate Commerce Committee’s privacy working group is leaving the most contentious legislative issues for latter stages of negotiation (see 1905010198), Senate Majority Whip John Thune, R-S.D., told us Tuesday. Senate Banking Committee Chairman Mike Crapo, R-Idaho, who insists committee collaboration is necessary to resolve sectoral issues, told us he isn’t ruling out moving forward with his own privacy bill.
The White House Wednesday declined to endorse the Christchurch Call, an international campaign for curbing social media extremists. The campaign has the support of 18 governments, including Australia, Canada and the U.K. Major platforms back it, including Amazon, Facebook, Google, Microsoft and Twitter.
Consumers can sue Apple for using its alleged App Store monopoly to drive up app prices (see 1811260039), the Supreme Court ruled 5-4 Monday. Justice Brett Kavanaugh sided with four liberal justices, writing an opinion allowing a class action lawsuit to proceed in Apple v. Robert Pepper, docket 17-204. Protecting consumers from monopoly prices is “the central concern of antitrust,” under the Sherman Act, Kavanaugh wrote. “The consumers here purchased apps directly from Apple, and they allege that Apple used its monopoly power over the retail apps market to charge higher-than-competitive prices.” Apple, with the backing of the Trump administration and various industry groups, argued that pass-through harm can lead to duplicative damages in conflict with Illinois Brick Co. v. Illinois. Apple suggested only app developers should have the right to sue. Illinois Brick “does not bar the consumers from suing Apple for Apple’s allegedly monopolistic conduct,” Kavanaugh wrote. Consumers bought apps from third-party app developers at prices set by developers, Justice Neil Gorsuch dissented. The issue is that the 30 percent commission Apple charges developers falls initially on the developers, Gorsuch wrote. “So if the commission is in fact a monopolistic overcharge, the developers are the parties who are directly injured by it.” This is the pass-on theory Illinois rejected, he continued. Chief Justice John Roberts and Justices Clarence Thomas and Samuel Alito joined the dissent. Monday’s decision “puts multi-sided business models at risk of expensive, duplicate claims,” Computer & Communications Industry Association CEO Ed Black said.
Senate Commerce Committee Chairman Roger Wicker, R-Miss., is limiting privacy talks to his working group of six (see 1905010198). That comes amid jockeying from Senate Judiciary Committee and Banking Committee chairmen.
House Intellectual Property Subcommittee Chairman Hank Johnson, D-Ga., is crafting legislation designed to combat frivolous trademark applications, a growing issue with Chinese companies. “We’re exploring specific ideas now, and we’ll be drafting the legislation at some point in the near future,” Johnson told us after a subcommittee hearing Thursday. It featured Patent and Trademark Office Director Andrei Iancu.
The FTC should be wary of regularly naming executives in complaints because it results in more litigation, fewer resources and fewer cases, Chairman Joe Simons told reporters Wednesday. Earlier, at a House Consumer Protection Subcommittee hearing, lawmakers discussed the agency’s possible settlement with Facebook. Critics urged the FTC to name CEO Mark Zuckerberg and hold him individually accountable for privacy violations.
Committees need to collaborate on privacy legislation to ensure there aren’t sectoral inconsistencies, Senate Banking Committee Chairman Mike Crapo, R-Idaho, told reporters Tuesday. His post-hearing comments again sought financial sector involvement as Senate Commerce Committee privacy talks continue (see 1904040073).
Senate Intelligence Committee Chairman Richard Burr, R-N.C., wants to reauthorize the Section 215 phone surveillance program, despite reports NSA might let it expire (see 1904240068). “We plan to reauthorize it. It’s a valuable program,” Burr told us. Ranking member Mark Warner, D-Va., is skeptical, but said he's open to hearing arguments for reauthorization.
Wednesday’s FTC oversight hearing before the House Consumer Protection Subcommittee is a good opportunity to gauge what additional privacy resources the agency needs, Chair Jan Schakowsky, D-Ill., and House Commerce Committee Chairman Frank Pallone, D-N.J., said in interviews. The pair recently asked the agency what it would do with an additional $50 million-$100 million in annual funding (see 1905010183). FTC Chairman Joe Simons took to Capitol Hill Thursday to discuss budgetary needs, said Sen. John Kennedy, R-La., and a lobbyist.