cyber_security
Mar 7, 2019

Emerging Technologies Washington Update

This Week: Privacy remains at forefront of federal and state policy debates, Senate Judiciary Antitrust Subcommittee examines competition and concentration, Democrats unveil net neutrality legislation

Week in Review

The House and Senate were both in session this week with the House focused on H.R. 1, Democrats’ election reform bill. The Senate spent the week processing several judicial nominations.

The Administration made several key personnel announcement this week, including that the President will nominate Dale Cabaniss to be Director of the Office of Personnel Management. On Tuesday, Food and Drug Administration Commissioner Scott Gottlieb unexpectedly announced his intention to leave his post at the end of the month.

The President attended the American Workforce Policy Advisory Board meeting on Wednesday at the White House alongside CEOs from major US companies. Senior EU officials, including European Commission Secretary-General Martin Selmayr, were in Washington this week for meetings with National Economic Council Director Larry Kudlow, US Trade Representative Robert Lighthizer, and others.

Looking Ahead

The Senate is soon expected to vote on and pass a resolution to block the President’s emergency declaration to direct additional funding to build a border wall. The House passed a resolution last week and the President is expected to veto it.

In the coming weeks, the Senate is also likely to take up a $13.6 billion disaster aid package and to vote on the Green New Deal resolution. In response, Senate Minority Leader Schumer (D-NY) introduced a resolution this week to establish a Select Committee on the Climate Crisis.

Privacy Remains at Forefront of Federal and State Policy Debates

Earlier this week, National Institute of Standards and Technology (NIST) Senior Privacy Policy Advisor Naomi Lefkovitz and Applied Cybersecurity Division Chief Kevin Stine discussed the current state of the agency’s Data Privacy Framework - an initiative first announced in October 2018 - during a panel at the RSA Conference 2019. Lefkovitz and Stine explained that the agency’s framework is being developed to be risk-based/outcome-based and non-prescriptive in order to ensure more widespread adoption.

The NIST officials went on to argue that data privacy is one element of a comprehensive overall enterprise risk management plan. “Privacy is just another dimension of risk, and should be a part of that broader enterprise risk management activity in an organization… [Companies] need to consider what is the likelihood of a problematic data action occurring, and what the impact would be in terms of customer loyalty, compliance and cost,” Lefkovitz said. NIST is continuing to solicit public feedback on a comprehensive privacy framework and will host a webinar to outline the agency’s proposal on March 14.

Meanwhile, Senate Judiciary Committee Chairman Graham (R-SC) scheduled a hearing next Tuesday on “GDPR & CCPA: Opt-ins, Consumer Control, and the Impact on Competition and Innovation.” The Senate Commerce Committee held its first of several privacy hearings last week and Chairman Wicker (R-MS) made clear this week that his Committee believes it has jurisdiction over the issue.

While Congress debates whether or not to preempt state laws in a federal privacy framework, California continues to move ahead with implementing the California Consumer Privacy Act (CCPA). The California Senate Judiciary Committee held a hearing this week to hear proposals from industry and privacy advocates alike to expand or otherwise amend CCPA while the Office of the Attorney General continues to develop implementing regulations. The OAG also convened the seventh and final public forum to inform its work at Stanford Law School. The comment deadline is tomorrow. A second series of public forums will take place later this year after the Attorney General publishes the proposed rule, expected this fall.

The Washington state Senate voted 46-1 this week to pass SB 5376, which would enact a similar statewide consumer privacy framework. The bill also places restrictions on certain uses of facial recognition technology.

Senate Judiciary Antitrust Subcommittee Examines Competition and Concentration

On Tuesday, the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights held a hearing entitled “Does America Have a Monopoly Problem?: Examining Concentration and Competition in the US Economy.” Lawmakers heard from a panel of professors and former federal officials, who offered varying analyses regarding the presence of market monopolization in the United States, as well as potential remedies to these issues. Subcommittee members discussed the effects of market concentration on consumers and the economy. During the sparsely attended hearing, members of both parties acknowledged the negative consequences of market concentration, but did not agree on potential remedies to abate these concerns.

In general, the hearing focused on the consequences of market concentration in various industry sectors. Lawmakers focused on issues related to the technology and health care industries frequently when discussing the growing rate of market concentration. Republican committee members expressed concern that dominant technology firms engage in practices that detract from consumer welfare and civil society. Members of both parties expressed an interest in examining the size and power of technology platforms. However, Democrats took a tougher approach to potential remedies, including increased regulatory authority and antitrust enforcement.

Subcommittee Chairman Lee (R-UT) suggested that recent discussions of market concentration stem from public concerns over the business practices of dominant technology platforms. Lee added that he shares concerns with consumers and policymakers that these companies possess considerable economic power to wield over political officials and consumers alike. Nevertheless, he expressed doubts that antitrust law should be used to address these concerns and noted that current commentary on market concentration fails to include economic analyses. He suggested lawmakers look to other policy tools to address competition concerns, such as stricter merger reviews and policies that encourage job creation.

In response, Ranking Member Klobuchar (D-MN) insisted that market concentration extends beyond the technology industry. She noted that increased market concentration is visible across industry sectors, especially in the health care industry. She criticized regulators for lax antitrust enforcement policies and underscored the need for increased industry oversight.

Amongst the panel, Former Labor Secretary Reich and former Republican Federal Trade Commissioner Wright provided competing points of view regarding U.S. market concentration. Reich noted that dominant digital platforms continue to grow because consumers and businesses have no other choice but to interact on these platforms. He also suggested data creates a considerable barrier to market entry and poses risks to consumer privacy. Reich emphasized throughout the hearing that policymakers can either use antitrust law for its intended purpose to oversee industries or create new regulations.

In contrast, Wright suggested there is no persuasive evidence that market power is systematically increasing in ways that raise antitrust concerns. He noted that there could be some room for improvement in antitrust enforcement but cautioned against proposals that regulators apply antitrust law more broadly.

Democrats Unveil Net Neutrality Legislation

On March 6, Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) joined Democrats from both chambers, including House Energy and Commerce Chairman Frank Pallone (D-NJ) and Senator Ed Markey (D-MA) to unveil legislation in both chambers of Congress to restore the Federal Communication Commission’s (FCC) net neutrality rules. The Save the Internet Act would restore the reclassification of broadband as a Title II (common carrier) service. It would also restore any other rules that the FCC eliminated as part of the 2015 Order that rescinded the rules. In addition, it would bar the FCC from reissuing a rescission order that is substantially the same as the 2017 order, unless authorized by Congress.

Based on last year’s vote on the Congressional Review Act (CRA) effort to restore the net neutrality rules, the Senate would appear to have 52 votes in favor of the legislation (46 of the 47 Democratic members of the Senate are co-sponsors). Having taken over the majority in the House with 235 members, Democrats have a sufficient majority to pass the bill in that chamber.

Energy and Commerce Communications and Technology Subcommittee Chairman Doyle (D-PA) will begin hearings on the legislation next Tuesday and plans to markup the bill by mid-March. He expects a floor vote by the end of April. Timing for action in the Senate is less clear and would require 60 votes for cloture in order to advance. Senate Commerce Chairman Roger Wicker (R-MS) has not scheduled any net neutrality hearings. 


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