The Big Story: Trump tees up NDAA veto fight over Section 230. President Donald Trump is still threatening to veto the must-pass annual defense authorization bill over his demand to repeal Section 230. Trump and some Republican lawmakers have spent months falsely claiming that the bedrock Internet law allows technology companies to “censor” conservative voices online, despite the fact that changes to the law would likely have an outsized impact on startups and others that rely on Section 230’s liability limitations to host and moderate user content.
The roughly $740 billion National Defense Authorization Act (NDAA) passed both chambers of Congress last week with veto-proof majorities, despite Trump’s threat to veto the legislation. Since the votes, Trump has expressed a variety of different reasons for opposing the legislation, including objecting to the fact that it would, in part, establish a commission to look into renaming military bases named for Confederate generals. The president, however, has spent months trying to weaken Section 230, and the White House reportedly told House Democrats last month that Trump would support efforts to rename U.S. military bases named for Confederate generals if lawmakers agreed to repeal of Section 230. Republican lawmakers continue to echo the president’s attacks on Section 230, even as Trump’s term in office draws to a close. This week, Sen. Lindsey Graham (R-S.C.) introduced legislation that would repeal Section 230 on January 1, 2023, if Congress does not “find an acceptable alternative” to the bedrock Internet law by then.
President Trump and Republican lawmakers opposed to Section 230 largely ignore the ways in which companies of all sizes across the Internet—from website comment sections to e-commerce sites—rely on the law to attract investment, launch, and grow without having to worry about being sued out of existence. Even with Section 230, It can still cost an Internet company tens of thousands of dollars to combat even a frivolous lawsuit; changing the law could raise these costs to hundreds of thousands of dollars. Policymakers need to look beyond any partisan concerns they might have about the practices of the largest Internet companies and understand just how harmful repealing Section 230 would be to the startup community.
Policy Roundup:
EU threatens fines, breakups if tech companies don’t abide by proposed rules. The European Union unveiled sweeping new proposals this week that would impose strict penalties on U.S. technology companies. One proposal—the Digital Markets Act—would brand large Internet companies as so-called gatekeepers and prevent them from favoring their own products or services, while the other—the Digital Services Act—would hold tech companies accountable for user-generated content that violates EU laws around illicit materials. The restrictive rules could force U.S. tech companies to face steep fines and penalties.
States file antitrust lawsuits against Google. This week saw two new antitrust lawsuits from state attorneys general against Google over alleged manipulation of its search results and alleged monopolistic behavior in the online ad market. In a blog post responding to yesterday’s lawsuit, Google said that the suit seeks to redesign its search engine in “ways that would deprive Americans of helpful information and hurt businesses’ ability to connect directly with customers.”
FTC orders tech companies to explain data collection practices. The Federal Trade Commission announced this week that it is ordering nine Internet companies to turn over information about their use of consumer data as part of a study examining how technology companies employ users’ information to display advertisements and content online. Amazon, ByteDance, Discord, Facebook, Reddit, Snap, Twitter, WhatsApp, and YouTube received the FTC’s orders.
COVID relief package should provide long-term support for startups. Senate Majority Leader Mitch McConnell (R-Ky.) said yesterday that a bipartisan agreement on a roughly $900 billion COVID relief package—which reportedly includes approximately $330 billion for small business loans—"appears to be close at hand." As policymakers continue to finalize the legislation, however, they must work to ensure that it provides startups with the long-term support they need to keep their businesses afloat during this difficult time. As Engine Policy Analyst Jennifer Weinhart explained in a Morning Consult op-ed this week, startups are critical drivers of the nation’s economy and need targeted relief to grow, create jobs, and keep the U.S. at the forefront of global innovation.
Startup Roundup:
#StartupsEverywhere: Durham, North Carolina. Fintech startup LoanWell is seeing years of hustle pay off—and finding ways to help get financial relief to small businesses across North Carolina—during the pandemic. We spoke with Bernard Worthy, LoanWell’s CEO and Co-Founder, to learn more about his startup, the company’s unique efforts to support economic relief, and his thoughts about how communities and governments can and do support underrepresented founders.
#EngineStartupSpotlight. Engine is spotlighting different startups on social media to highlight some of the policy issues affecting their businesses. Reach out to us here to be featured.
