The Big Story: EU releases blueprint for "tech sovereignty." The European Commission outlined a digital policy proposal this week to restore “technological sovereignty” to the bloc by imposing stricter regulations on large tech platforms and creating new rules for artificial intelligence and data use.
The blueprint is designed to strengthen the European Union’s technological capabilities in order to allow European companies to more directly compete with global competitors, particularly those in the U.S. and China. The Commission’s data proposal would promote data reuse and establish “practical, fair and clear rules on data access,” while the AI white paper calls for implementing rules for “high risk” AI systems and requiring the use of unbiased data to train AI systems.
Further EU proposals regarding platform regulations will not be released until later this year, so it remains to be seen what kinds of direct steps the Commission plans to take against U.S. tech platforms. It is important to note, however, that the proposals released this week make no mention of how the bloc plans to work with the U.S. moving forward. According to Politico, the lack of U.S. involvement in the proposal's design is likely “to reinforce a tech policy disconnect between the U.S. and the EU, leaving the bloc further at the mercy of China’s innovations and investments.” While it makes sense that Europe would want to build up and support its own tech companies, a lack of communication between allies could put new U.S. startup ventures at risk by creating de facto global standards that unfairly target American companies.
Policy Roundup:
Spain approves digital services tax. Spain’s government approved a digital services tax that would impose a three percent levy on Internet companies with at least 750 million euros in global revenue and digital sales of at least three million euros in the country. The tax will reportedly not be implemented until December, in order to allow the Organisation for Economic Co-operation and Development (OECD) time to reach an agreement on a global tech tax. As we’ve previously noted, startups oppose digital service taxes—like the one approved by France last year—because larger U.S. firms will likely pass on the financial burden of the taxes to newer ventures that depend on their services to grow and thrive.
Washington state moves forward with privacy bill. The Washington state Senate last Friday passed the Washington Privacy Act, state-level privacy regulations that would apply to companies that conduct business in the state and process data from at least 100,000 people each year, or receive at least half of their revenue from selling and processing data from at least 25,000 consumers. The state’s House of Representatives is expected to take up the legislation later today.
Attorney General questions merits of Section 230. During a Department of Justice public workshop on Section 230 of the Communications Decency Act, Attorney General William Barr questioned whether the critical intermediary liability protections were still necessary by claiming that “no longer are technology companies the underdog upstarts.” But as we pointed out earlier this week, the protections are especially critical for new companies that lack the financial or legal resources to moderate all user-generated content shared on their platforms.
FCC seeks comments on net neutrality repeal following court remand. The Federal Communications Commission is seeking public comment to “refresh the record” on three issues related to the agency’s 2017 repeal of the net neutrality rules. The D.C. Circuit Court last year upheld the FCC’s decision, but said that the agency needed to address the repeal’s impact on public policy, regulating pole attachments, and the Lifeline program. The repealed net neutrality rules helped keep the Internet a level playing field for companies of all sizes, and allowed the startup ecosystem to thrive.
IRS planning cryptocurrency summit. The Internal Revenue Service is reportedly inviting cryptocurrency startups to attend a March 3rd summit to discuss ways in which the agency can “balance taxpayer service with regulatory enforcement.” Advocates of digital currencies, including Kristin Smith—executive director of the Blockchain Association—said they hope the IRS will use the event as an opportunity to develop better regulatory frameworks for cryptocurrencies.
Startup Roundup:
#StartupsEverywhere: Salt Lake City, Utah. Blerp, a Salt Lake City-based search platform, was started by three college friends as a side project while attending the University of Utah. Today, the audio sharing service is integrated with a number of large-scale social media and streaming platforms—including iOS, Android, Twitch, and Discord—and provides users with the opportunity to create and share audio clips with their friends and other online users.
