Five regulatory fights facing tech in 2018

Technology firms are facing tough regulatory fights in the coming year after a turbulent 2017.

Emerging technologies, such as self-driving cars and digital currencies, are at a crossroads with new scrutiny and growing calls for tougher rules.

The fight over net neutrality is now headed to the courts after the Federal Communications Commission voted to repeal the Obama-era internet rules. In another high-profile fight, the federal government is fighting to block the megamerger between AT&T and Time Warner.

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With the midterms looming, lawmakers are also looking at ways to prevent a repeat of Russia’s 2016 election interference.

Here are five fights the tech world will be watching closely in the coming year.

 

Net neutrality

The fight over net neutrality is entering a new stage in 2018.

The Republican majority on the Federal Communications Commission (FCC) voted in December to scrap the Obama-era rules, which prevented broadband providers from blocking or slowing down websites or creating internet “fast lanes” for those able to pay.

The fight is now headed to the courts. New York Attorney General Eric Schneiderman (D) is leading a coalition of state attorneys general who will file suit to preserve the rules.

While the legal fight plays out, pro-ne-t-neutrality groups, including Fight For The Future, say they intend to ramp up their pressure on lawmakers to use the Congressional Review Act (CRA) to block the FCC’s repeal. The CRA gives Congress the ability to repeal agency rules with only a majority in each chamber. 

Senate Minority Leader Charles Schumer (D-N.Y.) has already said he intends to force a vote in the upper chamber.

Tech trade associations, including the Information Technology Industry Council (ITI) and The Internet Association (IA), also are pushing for a legislative fix on net neutrality.

But those efforts face long odds, with Republicans controlling both chambers and only a handful of GOP lawmakers opposing the FCC’s move.

Despite public pressure in 2017, net neutrality backers were unable to prevent the FCC from rolling back the rules. Many are skeptical they will be successful this time.

Andrew Halataei, senior vice president of government affairs at ITI, also expressed concerns about competing efforts.

“Lawsuits and CRAs may dampen support for a legislative solution as pro-neutrality members look for an outright win on net neutrality instead of a legislative compromise,” he said.

 

Election transparency

Expect more scrutiny on election transparency issues in the coming year.

Tech giants found themselves on the defensive after revelations about how Russians manipulated social media platforms to interfere in the 2016 presidential election. Facebook, Twitter and Google’s top lawyers received a grilling from lawmakers in November. The companies have promised to do better to prevent such interference in the future, but lawmakers are not satisfied.

Sens. Amy Klobuchar (D-Minn.) and Mark Warner (D-Va.) introduced legislation that would impose new regulations on tech companies over political advertisements. The bill would treat online political ads similarly to those on radio and television, requiring disclosures about who is paying for the ads.

“As much as I dislike Citizens United, at least someone can look at the TV ads being run for or against somebody,” Warner said in September. “Why don’t those rules apply to social media companies?”

Some Republicans — most notably Sen. John McCain (R-Ariz.) — have backed the bill. but it’s still unclear if there will be enough support to pass Klobuchar and Warner’s “Honest Ads Act.”

Other Republicans, such as Rep. Will Hurd (R-Texas), back legislation but want changes to the Senate bill.

Tech firms have sought to convince lawmakers that they can police their platforms effectively, but that may not be enough to stop new rules.

 

AT&T-Time Warner merger

The Justice Department in December rejected AT&T’s proposed bid to merge with Time Warner, citing antitrust concerns, and filed a lawsuit to block the deal.

The deal would combine a telecom giant with a blockbuster media company, whose assets include CNN and HBO.

AT&T and Time Warner will now face the Justice Department in the U.S. District Court for the District of Columbia. Judge Richard Leon, a George W. Bush appointee, has set the trial date for Mar. 19.

In a court filing, AT&T defended the $85 billion merger with Time Warner, calling it “a pro-competitive, pro-consumer response to an intensely competitive and rapidly changing video marketplace.”

The telecommunication firm believes that companies like Hulu, Netflix and YouTube have changed the landscape of TV distribution and that a combined AT&T-Time Warner would not threaten market competition.

The Justice Department’s antitrust chief, Makan Delrahim, sees things differently and believes that the firms are too large to merge in their current forms.

The telecom and tech industries will be watching the trial closely, as will other industries where companies are eyeing mergers and new deals.

 

Cryptocurrency

Digital currencies have caught the attention of regulators and policy makers across the globe as bitcoin and ethereum have exploded in value over the past year.

That booming market has raised public interest in the currencies as well as concerns about the risk posed by scams and hacks.

Regulators across the globe are already taking initial steps toward rules on digital currency in 2018.

Financial regulators in India, the U.K. and other countries have all said they are examining how to regulate the digital currency. Russia and China have taken tougher stances, cracking down on the currencies.

So far, U.S. regulators have been hesitant to intervene, but have been issuing guidance and warnings about the potential dangers of investing in cryptocurrency.

Coin Center, a Washington, D.C- based organization that does research on digital currencies and represents cryptocurrency interests, is bracing for more scrutiny.

“Policymakers will continue to take notice of cryptocurrency’s growing investment and use. As a result we believe we will see an increase in policymakers seeking to close the gaps where technology has outpaced our laws,” said senior policy counsel Robin Weisman.

The industry is taking an active role in getting ahead of potential regulation.

Peter Van Valkenburgh, head of research at Coin Center told The Hill in December that his organization has been briefing lawmakers on Capitol Hill about cryptocurrencies and that the talks have been “fruitful.”

 

Sex-trafficking

In 2017, major internet companies finally backed a compromise on legislation to crack down on online sex-trafficking.

Tech companies had long fought legislation that would amend Section 230 of the Communications Decency Act to make companies more liable for content that facilitated sex trafficking on their platforms. Companies worried that they would be responsible for all content posted by users, which they say would be impossible to police.

Key companies, though, are open to working on the Stop Enabling Sex Traffickers Act (SESTA), introduced by Sens. Rob Portman (R-Ohio) and Richard Blumenthal (D-Conn.).

The Internet Association (IA), which lobbies on behalf of major internet companies like Google and Facebook in Washington, D.C., has said that it wants to find a compromise on the legislation.

“The Internet Association and our members are committed to combating sexual exploitation and sex trafficking online. We will continue to work with any lawmakers interested in addressing this important problem,” said Noah Theran, a spokesman for IA.

But Theran said that language in the bill limiting liability for tech companies would be crucial.

“It is essential to remember that intermediary liability protections are foundational to America’s internet sector. Internet Association remains as committed as ever to bedrock laws like CDA 230,” he continued. 

Even though IA is supporting the legislation, other tech groups are not happy with the bill, complicating the fight.

Tech advocacy group the Electronic Frontier Foundation has criticized IA’s stance, saying the organization is endorsing internet censorship.

Engine, a startup advocacy group, also remains opposed to SESTA.