The Big Story: Tech waits to see if SCOTUS will let Texas social media law stand
The Internet ecosystem is waiting to see whether the Supreme Court will issue an emergency stay of a lower court ruling from last week that would limit Internet companies’ ability to remove harmful content. The emergency stay could come as early as today. This week, Engine joined the Chamber of Progress and over 20 Internet advocacy groups and civil society organizations in a brief to the court urging them to reverse the Fifth Circuit decision, which overruled a lower court ruling that kept a 2021 Texas social media law from going into effect.
The Texas law, among other things, prohibits Internet companies with more than 50 million users from moderating content based on the user’s “viewpoint.” Trade associations representing large Internet companies challenged the law in court last year, arguing that it infringes on the Internet companies First Amendment rights to host and not host speech without government intervention. As Engine and others argued in the brief, the law would also make it impossible for Internet companies to engage in the necessary content moderation efforts to keep their platforms safe and relevant spaces for users. As we’ve long argued, platforms of every size and type need to be able to host and moderate content in ways that make the most sense for their own communities. While the Texas law is aimed at large Internet companies, startups often use platforms created by those companies and benefit from a healthy Internet ecosystem where companies are empowered to remove harmful content.
The serious and negative impacts of content moderation restrictions like those found in Texas’s law are already evident following last weekend’s mass-shooting in Buffalo, New York, where the 18-year old white gunman drove hours to a grocery store in a predominantly Black neighborhood before killing 10 people. The shooter attempted to livestream the racist attack—which Twitch removed in less than two minutes—but the video, as well as the shooter’s manifesto, have circulated online, despite tech companies’ efforts to remove them, pointing to just how difficult content moderation is, even for large, well-resourced Internet platforms. In addition to being technically challenging, the Texas law’s prohibition on “viewpoint” discrimination may make it legally difficult for companies to remove content like the gunman’s racist and antisemitic manifesto.
Platforms need to be able to moderate content in ways that work best for their communities of users, including their startup users. Policymakers at all levels of government should reconsider proposals that effectively force Internet companies to host all legal speech, and the Supreme Court should act quickly to keep the Texas law from going into effect.
Policy Roundup:
Engine filed comments to FCC, importance of broadband. Engine filed comments this week to the Federal Communications Commission (FCC) in response to their call on how to prevent and eliminate digital discrimination for equal adoption of quality broadband. In our comments, we reiterated the harms caused by digital redlining, the importance of reliable Internet access, especially throughout the startup ecosystem, and how the FCC can ensure that traditional barriers to broadband adoption—affordability and availability—are eradicated.
DOJ announces that good-faith computer security research should not be charged under CFAA. This week, the Department of Justice (DOJ) announced that they are revising a policy which had previously allowed federal prosecutors to charge “white hat” hackers who sought out security flaws in systems that needed better security. Under the new (admittedly limited) policy, “good-faith security” researchers should no longer face criminal charges under the Computer Fraud and Abuse Act (CFAA). The policy recognizes the value of such research and refocuses DOJ resources. The pronouncement also comes a year after the Supreme Court limited the scope of the CFAA, signaling another positive step to improve understanding and treatment of the CFAA—a 1986 law that can now feel outdated and has shown problematic and anti-competitive consequences in practice.
FTC adopts policy statement on privacy enforcement for children. During their open meeting on Thursday, the Federal Trade Commission (FTC) voted unanimously to issue a policy statement reiterating the limitations on data collection, use, and retention and the data security obligations set out by the Children’s Online Privacy Protection Act. The policy statement was issued with a particular focus upon education technology platforms used in schools and other educational settings that have become increasingly relied upon during the pandemic.
New competition bill targets digital advertising. On Thursday, a bipartisan group of senators introduced legislation that would prohibit companies that process more than $20 billion in advertising transactions from owning more than one side of the ad marketplace. The Competition and Transparency in Digital Advertising Act would force the largest Internet companies to divest significant portions of their ad businesses, which the bill's sponsors say will increase competition in the sector. Critics of the bill say it will dismantle critical parts of the advertising ecosystem and lead to increased costs for digital advertisements. Many startups rely upon targeted digital advertisements as an effective, low-cost method of reaching new customers, in addition to leveraging ad-supported business models to offer their services for free or low-cost built with tools from larger companies.
34 states, territories, jump on Biden’s broadband efforts. On Thursday, the National Telecommunications and Information Association (NTIA) announced that 34 states and territories have signed on to take part in the Biden administration’s Internet for All Initiative that, as designated from the Infrastructure Bill, would steer $45 million towards narrowing the digital divide and providing reliable and accessible broadband access to communities in need across the country.
Tech research efforts, EU privacy in tension after Spanish ruling. Spain’s data protection authority announced this week that it is fining Google, saying the company violated the European Union’s General Data Protection Regulation (GDPR) when it shared information with academic researchers studying data deletion requests. The regulator said that by sharing information about the requests with the researchers the company was frustrating European’s right to be forgotten and not allowing individuals their right to request the erasure of personal data.
Second trade transatlantic partnership meeting held this week. This week marked the second meeting of the U.S.-EU Trade and Technology Council (TTC), a transatlantic forum launched in 2021 to foster cooperation between U.S. and EU trade policy officials. The officials highlighted cybersecurity resources available to Small and Medium Enterprises (SMEs), underscored transatlantic cooperation in response to Russia’s invasion of Ukraine, focused on resolving global supply chain challenges, and looked forward to future concrete actions for the next TTC meeting to take place in December. Those actions are likely to include developments important to startups, including discussion of platform regulation, coordination on governance of artificial intelligence, and the conclusion of a study on digital tools available to SMEs.
Startup Roundup:
#StartupsEverywhere: Los Angeles, California. Camino Financial supports entrepreneurs and small business owners from disadvantaged communities through its AI-powered direct lending platform. We sat down with Co-Founder and COO, Kenneth Salas, to learn more about the work his company is doing. He also spoke with us about the use of artificial intelligence, the importance of support for local startup ecosystems, and the benefits of a policy landscape that incentivizes investment in new, innovative companies
