The Big Story: DOJ proposes changes to bedrock Internet law. The Department of Justice this week released a set of proposals for reforming a bedrock Internet law, a move that would make it more difficult and costly for Internet companies to host users’ content. The announcement comes as some lawmakers and federal officials have called for legislation to scale back Section 230 of the Communications Decency Act, which provides Internet companies of all sizes with the ability to moderate user content without being held liable for what they do or do not take down from their sites.
Among other things, the DOJ’s proposed measures would hold online sites liable if they are “willfully blind to criminal content on their own services,” despite the inherent difficulties involved with reviewing and moderating vast amounts of user-generated content. The proposals—which would need to be enacted through legislation in Congress—would also make it easier for online users to sue a platform for removing content that the platform finds to be objectionable. These lawsuits would cost hundreds of thousands of dollars, making it prohibitively expensive for startups to host user-generated content.
The DOJ’s announcement follows President Donald Trump’s executive order from last month targeting supposed “censorship” by Internet platforms. The order—which calls for the Federal Communications Commission and other federal agencies to reexamine the scope of Section 230—came after Twitter added fact-checking labels to several of the president’s tweets about mail-in ballots.
Also this week, Sen. Josh Hawley (R-Mo.) introduced legislation that would allow users to sue Internet firms for “selectively enforcing” their terms of service. As Engine noted in a statement following the bill’s introduction, these types of measures targeting Section 230 are legally dubious and would allow online users “to extort settlements from websites that exercise their discretion to block objectionable content from their platforms.”
Policy Roundup:
Supreme Court blocks White House effort to end DACA. The U.S. Supreme Court rejected the Trump administration’s attempt to end the Deferred Action for Childhood Arrivals program, an Obama-era policy that granted legal protections and work permits to immigrants who were brought to America as children. Engine praised the decision in a statement, highlighting the important contributions that Dreamers have made to the U.S. startup ecosystem.
Trump administration withdraws from global discussions on digital taxes. U.S. Trade Representative Robert Lighthizer confirmed to Congress this week that the Trump administration has pulled out of international talks to craft a digital services tax that would primarily target U.S. tech firms. Lighthizer told the House Ways and Means Committee that Treasury Secretary Steven Mnuchin made the decision because the U.S. was “not making headway” in the talks to reach a global agreement. The European Union threatened to move forward with its own digital services tax on tech firms—with or without a global agreement—after Lighthizer publicly announced the United States’ withdrawal from the international discussions organized by the Organisation for Economic Cooperation and Development.
Engine leads letter to Judiciary committees over patent quality concerns. Engine and 14 other organizations wrote to the House and Senate Judiciary committees this week asking policymakers to investigate the Patent Trial and Appeal Board’s increasing use of discretionary denials. The PTAB has taken recent steps which weaken inter partes review, an important tool for improving patent quality. The letter expressed concerns about the problematic consequences of this recent trend, including an increase in abusive litigation and forum shopping in suits against startups.
Social media platforms disrupting foreign influence campaigns. The House Intelligence Committee held a virtual hearing this week with officials from Facebook, Twitter, and Google to discuss how social media platforms are working to combat online foreign influence operations. The officials cited the firms’ successes in cracking down on coordinated influence campaigns originating overseas, but cautioned that current moderation efforts are forcing foreign actors to change their online tactics.
Pelosi wants digital advertisers to pressure online firms over content. Speaker of the House Nancy Pelosi (D-Calif.) called for digital advertisers to push Internet companies to more aggressively address “dangerous and even life threatening disinformation” on their platforms. The speaker also suggested that social media companies’ business models were contributing to the spread of offensive and misleading content by amplifying dangerous content designed to hook users.
U.S. companies can now work with Huawei to develop 5G standards. The Commerce Department confirmed this week that it will amend its ban on U.S. companies doing business with Chinese telecoms firm Huawei in order to streamline the production and development of 5G technologies. The rule change allows U.S. firms to work with Huawei—a leading provider of 5G technologies—in order to set standards for the development of the next-generation wireless network.
San Francisco ballot measures would tax local tech firms. Several members of the San Francisco board of supervisors have proposed ballot measures for later this year that would tax “overpaid” executives at companies that grant stocks to their employees. One measure would tax publicly traded firms an additional 1.12 percent on the value of their workers’ stock compensations, while another would impose an additional tax on companies whose top executives earn at least 100 times the median salary of their San Francisco-based workers.
Startup Roundup:
#StartupsEverywhere: Austin, Texas. Austin-based nonprofit organization DivInc is working to drive systemic change across the U.S. startup community by fostering the growth and development of underrepresented entrepreneurs. The organization is focused on connecting entrepreneurs of color and women founders with the mentors, connections, opportunities, and resources needed to create more authentically inclusive startup communities.
Startups, VC firms celebrating Juneteenth. Startups and venture capital firms across the country are recognizing Juneteenth—today’s celebration of the end of slavery in the United States—as a company holiday, a first time for many. Tech firms of all sizes, from early-stage startups to large companies like Twitter, have announced that they will be commemorating the date alongside their efforts to address systemic inequalities within the industry.
