The SAFE TECH Act Introduced into Congress

The ‘‘Safeguarding Against Fraud, Exploitation, Threats, Extremism, and Consumer Harms Act’’ or the "SAFE TECH Act" has been introduced into Congress. The proposal is led by Senators Warner (D-VA), Hirono (D-HI) and Klobuchar (D-MN), as the bill seeks changes to 47 U.S. Code § 230. 

The law which is part of the Communications Decency Act (CDA), also called Title V of the Telecommunications Act of 1996, provides ISP’s with federal immunity to any cause of action that seeks to make ISP’s liable for information that originated with a third party service user. 

Specifically, §230 states: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” The additional specifics of this law describe the liability shield that these companies currently enjoy which is further protected by federal preemption law. 

We have written several blog post on this topic about prior legislation targeting the law as well as prior U.S. DOJ Scrutiny on the matter. 

Since the SAFE TECH Act has been unveiled there have been multiple stakeholders expressing concern with unintended consequences this proposal in its current form has that will likely result in chilling of expression. 

Regardless of your political viewpoint, if you are a tech stakeholder that has ISP capabilities or you are providing services that deal with the exchange of ideas, you should be monitoring this type of legislative action to avoid unnecessary surprises to your business model. We at Lanton Law can help. 

Our legal and policy tools can help offer your organization a clear path forward to navigate what will be changing policies for technology stakeholders. Contact us today to discuss your options.

Tech Companies to Testify At House Judiciary Antitrust Subcommittee on July 27th

The House Judiciary Antitrust Subcommittee has scheduled a July 27, 2020 hearing for the CEO’s of Amazon, Apple, Google and Facebook (Big Tech) to testify regarding the Committee’s ongoing investigation of digital marketplace competition. The hearing is titled “Online Platforms and Market Power, Part 6: Examining the Dominance of Amazon, Facebook, Google and Apple.”  

The Committee’s press release has a joint statement from House Judiciary Committee Chairman Nadler (D-NY) and Antitrust Subcommittee Chairman Cicilline (D-RI) which states “Since last June, the Subcommittee has been investigating the dominance of a small number of digital platforms and the adequacy of existing antitrust laws and enforcement. Given the central role these corporations play in the lives of the American people, it is critical that their CEOs are forthcoming. As we have said from the start, their testimony is essential for us to complete this investigation.”

The Committee’s investigation launched its antitrust investigation last June. The Committee’s efforts are bipartisan and the Committee is attempting to address whether Congressional oversight is needed to pass tighter antitrust laws to ensure a more balanced marketplace. The Committee’s investigation will focus on documenting where competition is lacking in digital markets; exploring whether large companies are suppressing competition; and determining whether Congress and regulators need to do more to address Big Tech's dominance. If Congress decides that legislation is needed, it could lead to the first major policy revisions of U.S. antitrust law in decades.

Additional policy threats to technology companies remain besides Congress. In a mix of business and political reasons for determining whether a new class of start ups is being stifled by Big Tech, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) last year have announced joint efforts to investigate Big Tech. The FTC will have responsibility for investigating Amazon and Facebook while the DOJ will investigate Google and Facebook. It is looking as though some kind of regulatory action is coming by year end. Not to mention Big Tech has been receiving a lot of antitrust scrutiny from overseas. 

It is no secret that oversight over technology stakeholders is near. It’s best to look at your risks to determine whether you have the tools to protect your business and be nimble enough to navigate the changing policy currents. 

Lanton Law is a national boutique law and government affairs firm that focuses on technology and healthcare. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.   

New Legislation Targeting Technology Liability Shield Under Section 230

Earlier this year we started our conversation with the technology industry urging stakeholders to be aware of the growing policy attacks on the responsibilities of an Internet Service Provider (ISP) via the technology law 47 U.S. Code § 230. 

The law which is part of the Communications Decency Act (CDA), also called Title V of the Telecommunications Act of 1996, provides ISP’s with federal immunity to any cause of action that seeks to make ISP’s liable for information that originated with a third party service user. 

Specifically, §230 states: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” The additional specifics of this law describe the liability shield that these companies currently enjoy which is further protected by federal preemption law. 

A few weeks back we highlighted how politicians on both sides of the aisle have been more assertive in how tech companies are not living up to their expectations under Section 230. Now in addition to recent U.S. Department of Justice scrutiny, U.S. Senator Hawley (R-MO) has introduced the Limiting Section 230 Immunity to Good Samaritans Act, which seeks to provide accountability for bad actors who abuse the Good Samaritan protections provided under that Act. 

According to the Senator’s press release the bill “would prohibit Big Tech companies from receiving Section 230 immunity unless they update their terms of service to promise to operate in good faith and pay a $5,000 fine (or actual damages, if higher) plus attorney’s fees if they violate that promise.” This legislation makes it easier for Americans to sue tech companies that censor political speech or hide competitor content. This bill mirrors more conservative politicians who feel that tech companies are censoring conservative viewpoints.

Regardless of your political viewpoint, if you are a tech stakeholder that has ISP capabilities or you are providing services that deal with the exchange of ideas, you should be monitoring this type of legislative action to avoid unnecessary surprises to your business model. We at Lanton Law can help. 

Our legal and policy tools can help offer your organization a clear path forward to navigate what will be changing policies for technology stakeholders. Contact us today to discuss your options.     

What is the Potential Fallout from FTC’s Decision to Investigate Big Tech?

What is the Potential Fallout from FTC’s Decision to Investigate Big Tech?

The Federal Trade Commission (FTC) issued a press release announcing that the agency will examine prior acquisitions by large technology companies between the years of January 1, 2010-December 31, 2019. With a 5-0 vote, the Commission seeks to examine subsequent trends of large cap acquisition on smaller firms to determine whether competition was restricted or whether competitive concerns should have been raised. 

“The Federal Trade Commission issued Special Orders to five large technology firms, requiring them to provide information about prior acquisitions not reported to the antitrust agencies under the Hart-Scott-Rodino (HSR) Act. The orders require Alphabet Inc. (including Google), Amazon.com, Inc., Apple Inc., Facebook, Inc., and Microsoft Corp. to provide information and documents on the terms, scope, structure, and purpose of transactions that each company consummated between Jan. 1, 2010 and Dec. 31, 2019.

The Commission issued these orders under Section 6(b) of the FTC Act, which authorizes the Commission to conduct wide-ranging studies that do not have a specific law enforcement purpose. The orders will help the FTC deepen its understanding of large technology firms’ acquisition activity, including how these firms report their transactions to the federal antitrust agencies, and whether large tech companies are making potentially anticompetitive acquisitions of nascent or potential competitors that fall below HSR filing thresholds and therefore do not need to be reported to the antitrust agencies.”

What specifically is the FTC looking for?

“The Special Orders require each recipient to identify acquisitions that were not reported to the FTC and the U.S. Department of Justice under the HSR Act, and to provide information similar to that requested on the HSR notification and report form. The orders also require companies to provide information and documents on their corporate acquisition strategies, voting and board appointment agreements, agreements to hire key personnel from other companies, and post-employment covenants not to compete. Last, the orders ask for information related to post-acquisition product development and pricing, including whether and how acquired assets were integrated and how acquired data has been treated.”

What are the options for the FTC under this action?

With this review being operated by the agency’s Office of Policy Planning under Section 6(b) of the FTC Act the review could trigger an enforcement action but that this inquiry would not be able to share information with the Department of Justice unless there is an enforcement action.

So what does this mean?

The FTC has significant power to scrutinize mergers and stop them. In this case, the FTC’s aim is to examine how big tech became big tech? The answer is simple, not only did they innovate to create go to products, but these large companies like Amazon, Facebook, Alphabet, Microsoft and Apple grew through acquisitions. Determining whether to incorporate competition or “kill” acquired companies has heavily contributed to their success. While the FTC does have power to make problems for these companies, the fact that the agency’s scrutiny could go on for years poses the question of whether the FTC has enough resources to make any meaningful differences. Additionally, will these same scrutinized big tech companies provide a marketplace solution themselves by divesting certain businesses before policymakers require them to do so. 

This may be different for tech companies that aren’t large cap tech. Knowing what the competitive playing field is along with how regulators are overseeing this market is crucial to your success. Contact Lanton Law to learn about your options to put together a solid strategy to reach your goals.

For more information contact

Ron Lanton III, Esq. 

Principal 

Lanton Law 

rlanton@lantonlaw.com

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