Hillicon Valley: Senate sets hearing on Facebook’s cryptocurrency plans | FTC reportedly investigating YouTube over children’s privacy | GOP senator riles tech with bill targeting liability shield | FAA pushed to approve drone deliveries

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Welcome! Follow the cyber team, Olivia Beavers (@olivia_beavers) and Maggie Miller (@magmill95), and the tech team, Harper Neidig (@hneidig) and Emily Birnbaum (@birnbaum_e).

 

HERE WE GO: The Senate Banking Committee on Wednesday scheduled a hearing on Facebook’s plans to create a new cryptocurrency.

The hearing on “Libra” will take place on July 16, with witnesses yet to be announced.

Facebook announced plans to launch the cryptocurrency on Tuesday.{mosads}

The plans for the alternative financial system were laid out in a website and white paper promoting Libra as a way to make transferring money as easy as sending a text message. 

“Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people,” the white paper reads.

The hearing comes after Sen. Sherrod Brown (D-Ohio), the top Democrat on the banking committee, questioned the company’s plans.

“We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight,” he said. “I’m calling on our financial watchdogs to scrutinize this closely to ensure users are protected.”

In a letter last month, Brown and Senate Banking Committee Chairman Mike Crapo (R-Idaho) pressed Facebook over its plans to launch a cryptocurrency, posing questions about how the company plans to protect consumers’ financial data.

“We look forward to responding to lawmakers’ questions as this process moves forward,” a Facebook spokesperson told The Hill.

Read more here.

 

THINK OF THE CHILDREN: The Federal Trade Commission (FTC) is wrapping up an investigation into YouTube’s handling of children’s videos that could result in large fines for the company, The Washington Post reported.

The investigation reportedly comes after consumer groups filed complaints with the FTC alleging that YouTube was violating children’s privacy laws by collecting data on kids without obtaining parental consent.

The Post reported that the probe is in its late stages, meaning that the two sides could be nearing a settlement, but the exact status of the investigation and its scope are unclear.

It’s also unclear how large a fine is being considered.

“Google has been violating federal child privacy laws for years,” Jeffrey Chester, the head of the Center for Digital Democracy, which has filed complaints against YouTube with FTC, told the Post.

The news comes hours after The Wall Street Journal reported that Google, YouTube’s parent company, is exploring major changes to its platform to better protect children. One of the proposals reportedly under discussion among executives would involve moving all children’s videos to a standalone YouTube Kids app.

Both the FTC and YouTube declined to comment.

Sen. Ed Markey (D-Mass.), a member of the Energy and Commerce Subcommittee on Communications and Technology, praised the news and promised to introduce a bill aimed at curtailing internet companies’ efforts to exploit children.

Read more here.

 

A DIFFERENT KIND OF NET NEUTRALITY: Sen. Josh Hawley (R-Mo.), who has sought to make a name for himself as one of the Republican Party’s sharpest tech critics, is introducing legislation that would chip away at the legal shield preventing online companies from being held liable for content posted by their users.

Hawley on Wednesday introduced a bill requiring companies to prove they are politically “neutral” before they receive protections under Section 230 of the Communications Decency Act (CDA), which largely gives internet platforms legal immunity over content posted on their sites by third parties.  

The Missouri Republican’s legislation comes as GOP lawmakers for more than a year have threatened to gut Section 230 over allegations that the top social media companies in the world are biased against conservatives, a claim that the tech companies have categorically denied and say has not been substantiated by any evidence.

The Ending Support for Internet Censorship Act would require “big tech companies” to submit to external audits conducted by the Federal Trade Commission to prove their algorithms and content moderation practices are not biased against either U.S. political party. It would require the companies to undergo audits every two years.

Big tech companies in the bill are defined as those with more than 30 million active monthly users in the U.S., more than 300 million active monthly users worldwide, or companies with more than $500 million in global annual revenue.

“With Section 230, tech companies get a sweetheart deal that no other industry enjoys: complete exemption from traditional publisher liability in exchange for providing a forum free of political censorship,” Hawley said in a statement. “Unfortunately, and unsurprisingly, big tech has failed to hold up its end of the bargain.”

Read more here.

 

ADVANCING THE CYBER CAUSE: A Senate committee on Wednesday advanced legislation aimed at securing government-purchased devices against cyber threats, a move that comes just weeks after a companion bill moved forward in the House.

The Senate Homeland Security and Governmental Affairs Committee approved by voice vote the Internet of Things (IoT) Cybersecurity Improvement Act, a measure designed to establish cybersecurity standards for federal devices that are connected to the internet.

Under the legislation, the Commerce Department’s National Institute of Standards and Technology (NIST) would be charged with creating the guidelines and the Office of Management and Budget would inform agencies of the security standards to make sure that IoT devices purchased are consistent with the NIST standards.

IoT devices include those with internet connections and those that are able to send and receive data, such as laptops and mobile phones.

The bill’s lead sponsors are Sens. Mark Warner (D-Va.) and Cory Gardner (R-Colo.), the co-chairs of the Senate Cybersecurity Caucus.

Read more here.

 

SECTION 702 LIVES TO SEE ANOTHER DAY: The House on Tuesday rejected an amendment that would have limited the government’s ability to collect Americans’ personal communications without a warrant.

The House voted 175-253 against the amendment introduced by Reps. Justin Amash (R-Mich.) and Zoe Lofgren (D-Calif.) amid opposition from national security hawks.

The amendment: Amash and Lofgren tried to pass the measure as part of an appropriations bill that funds several federal departments, including the Labor Department, Department of Health and Human Services and the Department of Defense.

The amendment would have curtailed a controversial law that allows the U.S. government to collect communications from foreigners located outside of the United States without a warrant.

Pro-privacy lawmakers like Amash and Lofgren have long argued that one of the law’s provisions — Section 702 of the Foreign Intelligence Surveillance Act (FISA) — allows the government to collect data on Americans who are communicating with non-U.S. citizens outside of the country without a warrant. Their one-page amendment would have barred the government from collecting communications under FISA on Americans without a warrant.

Support from civil liberties groups: Digital rights group Fight for the Future in a statement after the vote pointed out that more Democrats had voted against the amendment than Republicans.

“It’s good to know that House Democrats like Adam Schiff are ‘resisting’ Trump by voting to ensure that he has limitless authority to conduct mass warrantless surveillance,” Evan Greer, deputy director of Fight for the Future, said in a statement. “The Democrats who voted against this common sense amendment just threw immigrants, LGBTQ folks, activists, journalists, and political dissidents under the bus by voting to rubberstamp the Trump administration’s Orwellian domestic spying capabilities.”

Lofgren and Amash’s amendment attracted enormous support from civil liberties activists.

Forty-two civil society groups signed onto an impromptu letter in support of the Amash-Lofgren amendment, writing it would “significantly advance the privacy rights of people within the United States.”

“We represent a cross-partisan coalition of civil liberties, transparency and government oversight organizations committed to reining in the warrantless surveillance of people in the United States,” wrote the groups, including the American Civil Liberties Union, the Arab American Institute and digital civil rights group Color of Change.

The debate: Amash on the House floor earlier on Tuesday said resistance to reforming Section 702 exemplifies “what’s wrong with Washington.”

“The government can search and sweep in billions of communications, including communications of Americans, and then query that data,” Amash said. “The Amash-Lofgren amendment puts in basic safeguards to allow the government to continue using Section 702 for its stated purpose of gathering foreign intelligence, while limiting the government’s warrantless collection of Americans’ communications under FISA.”

Rep. Pete Visclosky (D-Ind.) in a rebuttal on the floor said the amendment would have made “it more difficult for the NSA to target foreign nationals if the intended target is in communication with someone in the United States.”

“I would point out … that this is an appropriations bill, this is not an authorization bill,” Visclosky said. “The amendment is a serious change in policy and deserves more than 10 minutes of debate in this chamber.”

 

SURPRISE, SURPRISE: Google’s parent company on Wednesday rejected a call from its own shareholders to break up the internet search giant over concerns that it has grown too large and unmanageable.

The proposal was one of 13 shareholder proposals aimed at making Google more accountable to its investors that were ultimately defeated at its parent company Alphabet’s annual shareholder meeting in Sunnyvale, Calif.

An activist with Students for a Free Tibet named Sonamtso argued that Google has been too slow to respond to concerns about its handling of hate speech, privacy and human rights under authoritarian governments like China’s.

“We believe that Alphabet has grown to a size and complexity that is unmanageable as evidenced by numerous failures of oversight and management,” Sonamtso said at the meeting. “It is to the advantage of shareholders to be proactive in determining the company’s next steps rather than waiting for antitrust regulators to set a path.”

The proposal was put forth by the consumer group SumOfUs, which helped organize protests outside the meeting.

“We believe that shareholders could receive greater value from a voluntary strategic reduction in the size of the company than from asset sales compelled by regulators,” the group said in its proposal.

Read more here.

 

CHINESE DRONE FEARS: Members of the Senate Commerce security subcommittee examined the impact of banning Chinese-made drones, or components for drones, during a hearing on Tuesday.

The senators compared the debate on drones to the recent decision by the Department of Commerce to blacklist Chinese telecommunications giant Huawei in May, a move that barred U.S. firms from working with the company.

Implementation of the ban was delayed by 90 days to give tech companies more time to prepare for the change. Huawei has denied it poses a risk to the United States.

Drones have also been seen as potential national security risks in recent weeks following an industry advisory issued by the Department of Homeland Security in May that warned companies that Chinese-made drones could breach organizations’ networks.

Read more here.

 

DRONE DELIVERY INCOMING: Tech industry executives for years have promised that drones — aircraft vehicles that operate without a pilot on board — are the future of delivery. The small, buzzy aircraft have increasingly emerged in the skies above U.S. cities, dropping products including food and medical supplies at or near peoples’ doorsteps.

But mainstream implementation of drone delivery services is likely still years off, as industry leaders say the federal agency in charge of civil airspace is taking its time crafting regulations that will make it legal to fly drones for commercial purposes, including delivery.

“The technology has moved quickly forward, and the policies and regulations have lagged behind,” Lisa Ellman, the co-executive director of the Commercial Drone Alliance in Washington, D.C., told The Hill in a phone interview this week.

The Federal Aviation Administration (FAA) has, over the past year, allowed top companies to test drone delivery programs in urban and rural areas across the U.S.

The agency is collecting information on how those programs play out in order to inform the rules for commercial drone use, which experts say could make drone delivery legal within the next two to five years.

But stakeholders in drone delivery complain that the FAA’s approach has largely been overly cautious. And privacy activists, labor unions and consumer groups for years have pushed to implement safeguards before widespread deployment, arguing the sensitive technology poses high-stakes safety, surveillance and employment concerns.

Read more on the future of drone delivery here.

 

AN OP-ED TO CHEW ON: 2020 campaign will inaugurate the next big thing: Streaming TV news.

 

A LIGHTER CLICK: The new front in cyberwarfare.

 

NOTABLE LINKS FROM AROUND THE WEB:

The cybersecurity skills gap isn’t going to be solved in a classroom. (Forbes)

Facebook moderators break their NDAs to expose desperate working conditions. (The Verge)

Slack wants to replace email. Is that what we want? (The New York Times)

House panel to grill Facebook, Twitter, Google on terror content. (Bloomberg Law)