The Big Story: Potential privacy bill back on the table
Policymakers across the aisle and in both chambers are restarting conversations about creating a long-awaited, comprehensive privacy bill. Conversations about a federal privacy bill aren’t new for this Congress, and the issue has remained a top priority for the startup ecosystem for years. As we’ve long stated, both consumers and startups can stand to benefit from a federal privacy law that creates protections for consumers while ensuring certainty for startups. And although there has been a rise of bipartisan support to create a federal privacy framework, Congress has yet to pass, or even advance, a bipartisan consumer privacy bill.
In lieu of a federal framework, states have taken the lead since 2018 in passing consumer privacy laws aimed at creating data protections. Since California passed the California Consumer Privacy Act in 2018, other states including Virginia and Utah have followed suit, and several more have considered and started to advance their own bills. While state laws share many of the same overarching goals, they aren’t necessarily identical, which creates a patchwork of laws that can make it difficult for startups to operate across state lines.
It’s critical that policymakers revisit the issue of a federal privacy framework and work through the remaining sticking points, which have been whether users should be allowed to sue companies under the law and whether a federal law should preempt the emerging patchwork of state laws. As more states consider and pass their own rules, startups need a clear and consistent privacy framework to succeed.
Policy Roundup:
Startups voice concerns about copyright reform bill. This week, 25 startups, online service providers, entrepreneurs, and innovation support organizations sent a letter, to the Senate Judiciary Committee emphasizing the benefits of the current Digital Millennium Copyright Act (DMCA) framework and explaining how a new proposal would create difficulties for the broad and diverse ecosystem of startups and mid-sized companies that host user content.
USTR talks digital trade in hill hearings this week. U.S. Trade Representative Katherine Tai testified before the House Ways and Means and Senate Finance Committees this week about the President’s 2022 Trade Policy Agenda. Finance Committee Chairman Ron Wyden (D-Ore.) highlighted USTR’s “role in fighting for a free and open internet through smart digital trade policy,” and defended the importance of Section 230-like intermediary liability frameworks in trade policy—especially for startups. The wide-ranging hearings additionally touched on several issues of importance for startups, including the importance of balance in intellectual property policy, a bipartisan appeal for new free trade agreements, and details of the administration’s planned Indo-Pacific Economic Framework that will include digital trade issues.
DOJ endorses antitrust bills. The Department of Justice sent a letter to lawmakers this week endorsing a pair of antitrust bills that advanced out of the Senate Judiciary Committee earlier this year. While the bills are ostensibly aimed at large technology companies and app stores, critics and a bipartisan group of lawmakers have cautioned that they risk threatening consumer privacy measures and online content moderation efforts. The critics warn that the DOJ’s support for the bills is premature given their likely negative consequences and their sponsors’ commitments to make improvements.
UK Online Safety Bill remains problematic for startups, online communities. Earlier this month, officials in the United Kingdom put forward their latest version of the Online Safety Bill, the latest in a long legislative effort ostensibly aimed at creating a “safer online environment.” As the Wikimedia Foundation detailed in a recent blog, the bill “introduces accountability mechanisms that only suit large for-profit platforms,” and is not adequately tailored to other services like those that are community-governed, like Wikimedia, or have few resources, like startups. The bill would require services to collect sensitive personal data about its users and would also give regulators the authority to require proactive monitoring technology—forcing companies to use or develop filtering technology, which is prohibitively expensive and inherently imperfect. Penalties for non-compliance include massive fines and jail time for executives. As Wikimedia, Engine, and others have noted, the bill worryingly shares many similarities with intermediary laws imposed in autocratic nations, and it would create a strong disincentive for startups to expand to the U.K.
FCC details the year’s success in oversight hearing. At an oversight hearing earlier this week, FCC Chairwoman Jessica Rosenworcel highlighted recent accomplishments in expanding broadband access, including signing up more than 10 million households in the Affordable Connectivity Program (ACP) and decreasing the homework gap through the $17.1B Emergency Connectivity Fund. As we’ve long argued, access to affordable and reliable broadband is vital for startups in communities across the country to innovate and compete in the marketplace.
EU Parliament votes on crypto transactions. This week, the European Parliament voted in favor of creating new obligations to collect, verify, and report information for crypto transactions. One provision mandates that crypto exchanges collect the personal data of wallet users who are not customers, while also requiring the data to be verified before a transfer can occur. Engine has stated before that regulation should protect users' privacy while also not over-regulating entities as brokers, which could stifle the growth of the cryptocurrency industry in the U.S.
Startup Roundup:
Recognizing the contributions of women entrepreneurs. This week marks the end of Women’s History Month, an opportunity to celebrate women entrepreneurs and innovators while considering the challenges and disparities women face in the startup ecosystem.
Throughout the month, we highlighted women founders in our startup network who are innovating to create new products and services. We celebrate entrepreneurs like Carolyn Pitt, Founder and CEO of Productions.com—a startup that connects underrepresented producers and film and video professionals with job opportunities—who explained that women founders, as well as Black founders and rural founders, face an uneven playing field as they enter the startup ecosystem. “Accessing capital is one of the hardest things that founders have to do. And research has shown that it’s much harder for women founders to access capital, and even harder yet for founders of color,” Pitt noted. We also celebrate entrepreneurs like Dr. Grin Lord, Co-founder and CEO of Empathy Rocks—a tech company teaching its users to be more empathetic. Lord had to learn to navigate the challenges related to child care. “When entering the startup world, I was most affected by access to child care. It’s cost prohibitive, and remote schooling plus lack of consistent child care almost stopped my startup journey,” she detailed, citing that the annual child tax credit only covers some of the cost where she lives, works, and innovates. Samantha Smith, Founder and CEO of Vishion—an app for interior designers—explained how a lack of women in the startup ecosystem can discourage would-be founders. “Women want to see other women in the room, because they assume if other women are there that it’s a safe environment where they have the ability to act like themselves and don’t have to prove that they deserve to be there,” she said.
Women still make up a disproportionately small percentage of startup founders and investors. But there are steps policymakers and ecosystem members can take to make the startup ecosystem more accessible for women and other underrepresented founders, including incentivizing investment in underrepresented founders, making childcare more accessible, and increasing the availability of STEM education opportunities as well as networking and mentoring opportunities. A more equitable startup ecosystem benefits everyone, and policymakers should prioritize supporting women and other underrepresented entrepreneurs.
#StartupsEverywhere: Omaha, Nebraska. Job Share Connect is a digital platform that provides a way for employees and employers to explore the world of job sharing. Their software enables interested candidates to look for job share opportunities and to match with potential job share partners. Co-Founder and Co-CEO Jessica Charlsen told us about what led her to Job Share Connect, the benefits of job sharing, and how policymakers can better support entrepreneurs through public policies that support accessing capital outside traditional technology hubs.
