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Welcome! Follow the cyber team, Olivia Beavers (@olivia_beavers) and Jacqueline Thomsen (@jacq_thomsen), and the tech team, Harper Neidig (@hneidig) and Emily Birnbaum (@birnbaum_e).
RACKING UP A BILL: The European Union (EU) hit Google with a third major antitrust penalty in as many years, this time fining the internet search giant $1.7 billion over practices regulators say shut out competing online ad services.
The European Commission, the EU’s enforcement arm, said Google had been using exclusivity agreements with third-party websites to ensure that its ads reserve the most profitable placements within their sites.
{mosads}”Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anti-competitive contractual restrictions on third-party websites,” Margrethe Vestager, the EU’s competition commissioner, said in a statement.
“This is illegal under EU antitrust rules. The misconduct lasted over 10 years and denied other companies the possibility to compete on the merits and to innovate — and consumers the benefits of competition.”
According to the EU, Google stopped the practices in 2016 after a directive from regulators. The decision on Wednesday orders the company not to engage in it again in the future. It also allows competitors and other affected parties to file lawsuits against Google.
Google’s response: Google, which has fought the last two penalties with appeals, didn’t say whether it would challenge Wednesday’s fine but vowed to make further changes to address regulators’ concerns.
“We’ve always agreed that healthy, thriving markets are in everyone’s interest,” Kent Walker, the company’s chief legal officer, said in a statement. “We’ve already made a wide range of changes to our products to address the Commission’s concerns. Over the next few months, we’ll be making further updates to give more visibility to rivals in Europe.”
The big picture: The fine is the latest sign of how European regulators have surpassed U.S. authorities as Silicon Valley’s top watchdog.
GOP STEPS UP ATTACKS ON TECH’S LEGAL SHIELD: Republicans are coming after Silicon Valley’s legal protections.
A lawsuit from Rep. Devin Nunes (R-Calif.) and fresh attacks from President Trump are giving momentum to a conservative push to gut the law that gives companies immunity for content posted by their users.
Conservatives see the changes as essential to combating what they say is anti-conservative bias and censorship by the tech industry.
Republicans brought new attention to the controversy this week when Nunes sued Twitter and several of its users for defamation. The lawmaker alleged Twitter users were allowed to insult him online because the company has a left-wing bias.
And Trump on Tuesday promised to look into an aide’s allegation that he was censored by Facebook, accusing social media companies of being “on the side of the Radical Left Democrats.”
Social media platforms have repeatedly denied that they are censoring conservatives and there is little evidence to back up Republicans’ claims of being “shadow banned,” or having their posts hidden from other users.
But the fight over bias is putting a spotlight on a part of the 1996 Communications Decency Act, Section 230, which largely gives internet platforms legal immunity over content posted on their sites by third parties.
More here on how Republicans have their sights on the law.
JUSTICES PUNT ON GOOGLE PRIVACY CASE: The Supreme Court on Wednesday punted questions over a Google privacy case settlement to a lower court.
The justices said in their unsigned opinion that they could not determine whether the $8.5 million settlement was doled out fairly.
Google in 2010 settled a class-action lawsuit with individuals who said the company was violating users’ privacy rights. Because the case was brought on behalf of 129 million Google users, and Google had agreed to pay $8.5 million, the parties agreed to a “cy-près” settlement, meaning the money went to the plaintiffs’ lawyers and six hand-selected outside groups.
The 9th Circuit Court of Appeals in 2017 affirmed the district court’s approval of the settlement, but now the Supreme Court is asking the appeals court to reconsider the issue.
At issue is the legality of settlements that only include “cy-près” funds, which reward outside groups and lawyers but not the plaintiffs.
The plaintiffs in 2010 argued that Google was violating internet privacy rules by sharing information on what terms users searched for with third parties.
DEMS ASK FTC FOR BUDGET WISHLIST: Democratic House leaders are asking the Federal Trade Commission (FTC) if it needs more resources to adequately protect people’s privacy and data amid growing concerns about the government’s ability to police Silicon Valley.
In a letter, Rep. Frank Pallone Jr. (D-N.J.), the chairman of the House Energy and Commerce Committee, and Rep. Jan Schakowsky (D-Ill.), who leads the committee’s consumer protection subpanel, asked FTC Chairman Joseph Simons how his agency would be more proactive with dramatic increases to its budget.
Citing a string of privacy incidents at major tech companies in the past year, the Democrats said they “believe that legislation is needed to protect the privacy of our constituents and that the FTC must have additional resources and authority to meet these 21st century challenges.”
The FTC did not immediately respond when asked for comment. Last week, the agency submitted a budget request to Congress of $312 million — an increase of just $6 million.
Pallone and Schakowsky posed three budget scenarios — an additional $50 million, $75 million or $100 million — and asked Simons what the agency would do with each potential increase.
The FTC is charged with policing Silicon Valley’s handling of user data, and many observers believe that the small agency has neither the resources nor the legal authority to adequately enforce the law on the nation’s biggest corporate behemoths.
AN OP-ED TO CHEW ON: Are we underestimating Iran’s cyber capabilities?
A LIGHTER CLICK: A response to Speaker Pelosi.
NOTABLE LINKS FROM AROUND THE WEB:
Amazon and union at odds over firing of Staten Island warehouse worker. (The New York Times)
Kidfluencers’ rampant YouTube marketing creates minefield for Google. (Bloomberg)
Despite 2016 hack, some Democratic candidates haven’t taken this basic step to secure emails. (CNN)