The Big Story: The startup policy priorities for 2022
This week, Engine released its 2022 Startup Agenda, highlighting the policy priorities of the U.S. startup ecosystem and featuring startups across the country explaining the ways policy can support them.
As we explain in the agenda, there are startups in every state and every congressional district. There are startups that have all kinds of business models and rely on all types of funding. There are startups that operate in every sector of U.S. industry. And all of them will be impacted by policymakers' decisions across a range of issues.
But in policy conversations, the focus tends to fall on the industry's largest companies. Writing rules in response to concerns about the behaviors of the largest players—without fully considering the consequences for their smaller, newer counterparts that lack longstanding relationships and immense resources—risks creating burdens that fall disproportionately on startups. If policymakers are interested in creating opportunities for innovation and boosting competition, they must ensure an open, level, and consistent playing field across the wide range of policy issues that impact the startup ecosystem.
Policy Roundup:
Senate Judiciary to consider bill to change Section 230, discourage encryption. Next week, the Senate Judiciary Committee will consider the Eliminating Abusive and Rampant Neglect of Interactive Technologies (EARN IT) Act, a bill that would undermine Section 230’s protections for startups that host user-generated content and effectively discourage companies from using encryption to protect their users. The bill—which is similar to the version that passed the committee in 2020 after the committee added amendments to modify the original bill—has drawn criticism from public interest and civil liberties advocates as well as technology advocacy groups and members of the technology industry.
Senate discusses new rules for sharing news online. This Wednesday, a Senate committee held a hearing on the Journalism Competition and Preservation Act (JCPA), a bill that aims to address challenges facing local media organizations by exempting covered news publishers from certain antitrust laws. The bill, while controversial, is currently written to target media negotiations with a few large tech platforms. However, it implicates issues of whether and how Internet companies and users can link to and quote news content online. As we noted in recent comments to the Copyright Office as it studies similar proposals, it’s important that policymakers take a holistic view of local media markets and digital innovation ecosystems to avoid creating substantial unintended consequences for startups, innovation, online discourse, and free speech.
Data Protection ruling threatens to burden startups operating in the EU. On Wednesday, the Belgian Data Protection Authority held that the IAB Europe-developed Transparency and Consent Framework—an open-source framework utilized by entities throughout the digital advertising ecosystem, from websites to advertisers, to comply with the GDPR—actually ran afoul of the data protection law. The ruling upends the widely-used standard, meaning websites running targeted advertisements risk violating GDPR, and by curtailing targeted advertisements, burdens the cost-effective marketing tool startups and small businesses use to grow.
Engine files comments to NIST study on supporting emerging tech. This week, Engine filed comments to the National Institute of Standards and Technology (NIST) in response to their study on how to advance emerging tech, including artificial intelligence, Internet of things, and advanced manufacturing. In our comments, we reiterated the need for government to focus on issue areas that are especially crucial to startup growth—such as access to capital, talent, and diversity—and emphasized the need for balanced intellectual property and consistent privacy and security frameworks to promote startup success in emerging technology and beyond.
Senate Committee advances app store bill. On Thursday, the Senate Judiciary Committee passed the Open App Markets Act—a bill aimed at requiring companies like Apple and Google to host apps outside of their respective app stores. In response to security concerns voiced by critics, sponsors introduced an amendment to clarify liability around potentially malicious apps. Critics of the bill say the amendment fails to resolve the fundamental security risks inherent to forced sideloading. At the markup, a handful of Senators expressed similar concerns, and additional concerns about the ability of the companies to moderate their app platforms, with Sen. Padilla (D-Calif.) warning the bill “may be unintentionally providing an avenue for propagators of hate speech.”
Senate Trade panel expresses misgivings about EU digital policy. Senate Finance Committee Chair Sen. Ron Wyden (D-Ore.) and ranking member Sen. Mike Crapo (R-Idaho), sent a letter to the Biden Administration this week voicing concern about discriminatory digital trade policies. The Senators urged the administration to work with the EU around its digital policies like the Digital Services Act and Digital Markets Act, which target American companies and could additionally increase costs for American startups operating in the EU.
California’s net neutrality law, upheld. Last Friday, a federal appeals court upheld a lower court decision that California’s 2018 net neutrality law can remain in place. California passed its law after the FCC in 2017 repealed its strong net neutrality rules from 2015, which prevented ISPs from blocking or slowing access to certain websites and services.
Startup Roundup:
#StartupsEverywhere: Overland Park, Kansas.Bryght Labs is a connected gaming startup dedicated to making STEM-based games more accessible. Based in Overland Park, Kansas, Founder and CEO Jeff Wigh walked us through the company’s beginnings, the success they’ve seen with their launch product ChessUp, and how Wigh’s extensive experience with patents has informed his views of the US patent system.
