Congressional Legislation on Big Tech is Forthcoming

The U.S. House Antitrust Subcommittee Chairman Cicilline (D-RI) issued a statement shortly after the Committee marked up and approved the Committee’s report which after a 16 month investigation examined the state of competition within the digital economy.

The Congressman’s statement stated: 

“Amazon, Apple, Google, and Facebook each hold monopoly power over significant sectors of our economy. This monopoly moment must end. I’m grateful to my colleagues on both sides of the aisle who worked with me over the past two years to compile this Report, which makes clear that Congress and the antitrust enforcement agencies must step up to restore a competitive marketplace, enhance innovation, and protect our democracy. Now that the Judiciary Committee has formally adopted our findings, I look forward to crafting legislation that addresses the significant concerns we have raised.”

The report is expected to become an official committee report shortly. Lanton Law has been closely monitoring legislation from Senator Klobuchar (D-MN) and Congressman Cicilline (D-RI) and we strongly believe that this year we will see legislation based off of this Committee report to strengthen antitrust laws aimed at tech companies. 

Lanton Law is a national boutique law and lobbying 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.

Illinois Biometric Information Privacy Act (BIPA) Lawsuit Causes Facebook to Pay Settlement

On February 26, 2021 in the United States District Court Northern District of California, the Court found that Facebook was ordered to pay $650 million. This issue derived from the underlying lawsuit alleging whether the collection of an individual's biometric data in violation of the Illinois Biometric Information Privacy Act is sufficient to establish Article III standing. As a result of this dispute, the company’s automatic facial recognition tagging features are now an opt-in feature instead of being an opt-out choice. 

The Illinois Biometric Information Privacy Act enacted in 2008 was an important first step in developing policy on biometrics. According to the law, a private entity possessing biometric information accessible to the public must have a retention schedule and policy for permanently destroying biometric information. Additionally, there are restrictions on how a private entity may collect, capture, purchase, receive through trade, or otherwise obtain a person's or a customer's biometric identifier or biometric information. Most importantly, this law requires obtaining written consent prior to collecting biometric information as the law provides a private right of action for anyone injured under the Act. 

Lanton Law’s technology practice which includes biometrics and privacy issues, has been monitoring the Illinois Biometric Information Privacy Act for some time. We have posted several blogs addressing this issue as companies continue to evolve biometrics into the business models. As 2021 unfolds we confidently believe that legislative and regulatory oversight will increase leading to more litigation that fine tunes points left unanswered about this emerging field. 

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.   

Technology Industry Groups File Lawsuit Targeting Maryland Digital Ad Tax

A coalition of technology stakeholder associations that include the Computer & Communications Industry Association (CCIA), along with the U.S. Chamber of Commerce and the Internet Association, are suing Maryland Comptroller Peter Franchot (D), over the state’s recent enactment of the state’s online advertising tax; a first in the nation law. We previously wrote a blog post on this tax.

 According to the lawsuit, the plaintiffs “seek a declaration and injunction against enforcement of Maryland House Bill 732 (the Act) insofar as it imposes a “Digital Advertising Gross Revenues Tax” on sellers of digital advertising services. The Act is a punitive assault on digital, but not print, advertising. It is illegal in myriad ways and should be declared unlawful and enjoined.

 Additionally plaintiffs argue “The premise of the law is deeply flawed. Taxing digital advertising revenue will have the opposite of the Act’s intended effect, reducing resources to support the creation and availability of high-quality ad-supported content, leaving the online field overrun by low-quality “junk” content. Meanwhile, the Act will raise costs for consumers and make it more difficult for businesses to connect with potential customers. Simply put, the Act will harm Marylanders and small businesses and reduce the overall quality of internet content—all while doing nothing to stave off the dissemination of misinformation and hate speech.”

We’ll continue to monitor these events as it is almost a certainty that other states will attempt to pass similar legislation. Technology stakeholders including those in digital commerce will continue to be at risk. 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.

Big Tech Company Executives Pressed On Capitol Hill On Their Market Influence

On July 29th four of the biggest tech companies CEOs testified in front of Congress. Jeff Bezos of Amazon, Tim Cook of Apple, Mark Zuckerberg of Facebook, and Sundar Pichai of Google all took questions from the U.S House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law. The hearing which can be viewed here was titled “Online Platforms and Market power, Part 6: Examining the Dominance of Amazon, Apple, Facebook, and Google.”  

Sadly, there was a lot of political posturing on both sides of the political aisle and not a lot of policy. The main takeaway is that there is still no clear bipartisan antitrust agenda. 

Democrats presented evidence regarding antitrust concerns. It seemed they had pointed questions regarding certain deals such as Amazon's purchase of Ring to control that sector of the market and Facebook's alleged threats against Instagram before its purchase of the company.  

Republicans focused on perceived anti-conservative bias in tech instead of addressing company size and market power. Their questions focused on whether the tech companies will participate in "electioneering" for Joe Biden and grilled Facebook about Twitter's shutdown of Trump Jr.'s account. 

This has been a year-long investigation by this Subcommittee with this testimony capping the investigation. Subcommittee members are still in the process of sending follow-up questions to the CEOs and finalizing their conclusions over the next few weeks. Once they are done the Subcommittee will file a report of its findings. 

This process has been highly politicized, and many tech stakeholders are wondering whether any significant policymaking will get done by the end of the year. While there is reason to be skeptical, there is a highly charged election about to take place, meaning it wouldn’t surprise us if a small step towards technology regulation was accomplished. The bigger question is what happens to tech policy at the start of 2021? 

We continue to see an increase in federal and state policymaking when it comes to technology companies. The threat of looming technology legislation will undoubtedly lead to increased regulation. It’s better to be prepared now by knowing the landscape and preparing your strategic options in order to navigate the increased scrutiny. 

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. 

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.   

Apple and Google Announce Digital Contact Tracing Partnership Amid Privacy Concerns

Apple and Google have announced their partnership to enable Bluetooth technology to help interested stakeholders such as healthcare agencies and governments to fight COVID-19. The announcement describes the tech companies’ intent of “releasing draft documentation for an Exposure Notification system in service of privacy-preserving contact tracing.” The most important thing to note is that the companies will not be building contact tracing apps but will be providing tools around a unified programming interface that will allow these aforementioned stakeholders to create their own contact tracing applications. And while this partnership and others like it are a much needed resource during our fight against COVID-19, privacy concerns with how these companies are using our information loom in the background. 

So what is contact tracing? It can come in two forms. The first form is human to human tracing, which is described in the Centers for Disease Control and Prevention’s (CDC) list of core principles. 

• Contact tracing is part of the process of supporting patients with suspected or confirmed infection.

• In contact tracing, public health staff work with a patient to help them recall everyone with whom they have had close contact during the timeframe while they may have been infectious.

• Public health staff then warn these exposed individuals (contacts) of their potential exposure as rapidly and sensitively as possible.

• To protect patient privacy, contacts are only informed that they may have been exposed to a patient with the infection. They are not told the identity of the patient who may have exposed them.

• Contacts are provided with education, information, and support to understand their risk, what they should do to separate themselves from others who are not exposed, monitor themselves for illness, and the possibility that they could spread the infection to others even if they themselves do not feel ill.

• Contacts are encouraged to stay home and maintain social distance from others (at least 6 feet) until 14 days after their last exposure, in case they also become ill. 

As you can see this is a very specialized skill that needs to be timely executed to prevent further spread of disease. 

According to the CDC digital tracing on the other hand is another set of tools that can be used to “expand the reach and efficacy of contact tracers.” This is what we are seeing from the Apple-Google partnership, as well as other applications (apps) that we see flooding the market in an effort to provide additional tools to combat COVID-19. 

Digital contact tracing can theoretically be more efficient because it doesn’t rely on memory, but requires user cooperation where people would have to download the relevant apps on their phones. In order for something like this to have an almost “real time” effect, a large number of people would have to adapt to this technology. Are we as a society ready for this? While emergencies like this would seem like the answer would be a common sense “yes” there are a lot of other issues at play such as are positive alerts to a user accurate and will a user’s information be protected? A great example of user worry could come in the form of potential genetic discrimination of which we wrote a prior blog post.  

To date the skepticism of technology companies being able to use healthcare data has been rampant. For example, several industry stakeholders were surprised by the Wall Street Journal’s (WSJ) article  that Google has been working since 2018 on a "secret" project involving patient data with Ascension, the St. Louis-based nationwide health system. 

Project Nightingale would involve having Google be provided with millions of health records of U.S. citizens, which has prompted a recent follow up letter by three U.S. Senators to gain additional insight into the project’s specifics. Facebook has a new tool called Preventive Health that seeks to “connect people to health resources and checkup recommendations from leading health organizations.” And while Microsoft launched Microsoft Cloud for Healthcare; whose program applies “flexible capabilities to power individualized experiences, improve team collaboration, and unify data to unlock real-time insights,” demonstrates that while technology and healthcare are merging, the need for addressing privacy concerns remains at the forefront. 

We need all the tools we can get our hands on during this difficult struggle against COVID-19, especially when it comes to digital contact tracing. There is no doubt that we need the efficiencies that technology has to offer. The potential is there, but there has to be buy in from a majority of people in order for this to work. Not only do we have to continue to work to ensure that everyone has access to smartphone technology, but we have to put some additional “safety checks” in place to ensure that ‘anonymized’ aggregated data isn’t sold, that sensitive protected health information (PHI) is guarded and the proper laws/regulations are put in place so that we can learn from the painful lessons that COVID-19 has taught thus far. 

Litigation Involving the Illinois Biometric Information Privacy Act May Hold the Key to Future Biometric Policy

The Illinois Biometric Information Privacy Act enacted in 2008 was an important first step in developing policy on biometrics. According to the law, a private entity possessing biometric information accessible to the public must have a retention schedule and policy for permanently destroying biometric information. Additionally, there are restrictions on how a private entity may collect, capture, purchase, receive through trade, or otherwise obtain a person's or a customer's biometric identifier or biometric information. Most importantly, this law requires obtaining written consent prior to collecting biometric information as the law provides a private right of action for anyone injured under the Act. 

Interestingly, the case of Patel v. Facebook is an illustration of how this law applies to our growing dependence on technology. The question in Patel, is whether the collection of an individual's biometric data in violation of the Illinois Biometric Information Privacy Act is sufficient to establish Article III standing. According to the complaint, plaintiffs’ allege that Facebook subjected them to facial-recognition technology without complying with an Illinois statute intended to safeguard their privacy. Since the plaintiff did not allege substantive harm, the defendant moved to dismiss the case on Article III standing grounds. However; the Ninth Circuit stated that “Because a violation of the Illinois statute injures an individual’s concrete right to privacy, we reject Facebook’s claim that the plaintiff have failed to allege a concrete injury-in-fact for purposes of Article III standing.”

This case is in contrast to Santana v. Take-Two Interactive Software, Inc. who in 2017 interesting had the same Illinois law at issue. In this case plaintiff purchased NBA 2K15 and used the MyPlayer feature that allowed the creation of MyPlayer avatars. However; the Illinois Biometric Information Privacy Act’s private right of action allowed for plaintiff to allege that defendant “(1) collected their biometric data without their informed consent; (2) disseminated their biometric data to others during game play without their informed consent; (3) failed to inform them in writing of the specific purpose and length of term for which their biometric data would be stored; (4) failed to make publicly available a retention schedule and guidelines for permanently destroying plaintiffs’ biometric data; and (5) failed to store, transmit, or protect from disclosure plaintiffs’ biometric data by using a reasonable standard of care or in a manner that is at least as protective as the manner in which it stores, transmits, and protects other confidential and sensitive information.”

The Second Circuit in contrast to Patel, found that the plaintiff lacked standing for this claim because they did not allege that this deficient notice created any material risk that would have “resulted in plaintiffs’ biometric data being used or disclosed without their consent.”

So what happens now? First Santana is a summary order which means that this is not binding precedent on the Second Circuit. The Patel court attempted to distinguish itself from Santana by saying that in Patel unlike Santana, the plaintiff did not know that their biometric information was being collected. It seems like the U.S. Supreme Court may be the appropriate forum to settle this split decision by the Court of Appeals. This is especially true as Congress has not yet passed a federal biometric law that could put all questions to rest. Needless to say that as technology companies look for innovative ways to deliver advanced customer experiences, these stakeholders may want to forecast how their new products may be impacted by enacted laws like biometrics. Contact Lanton Law for additional information.