Zuckerberg does damage control for Libra

Politico Politics 0 month ago

With help from Cristiano Lima and Laura Kayali

Editor’s Note: This edition of Morning Tech is published weekdays at 10 a.m. POLITICO Pro Technology subscribers hold exclusive early access to the newsletter each morning at 6 a.m. Learn more about POLITICO Pro’s comprehensive policy intelligence coverage, policy tools and services, at politicopro.com.

Quick Fix

Zuckerberg testifies: Amid backlash to the proposed Facebook-led digital currency Libra, and rising critiques of the social network itself, Mark Zuckerberg will address a range of House lawmakers’ concerns.

— “STELAR” debate: The Senate Commerce Committee will hear this morning from tech and telecom groups with a stake in whether a 2014 satellite TV law set to expire at the end of this year should be reauthorized.

Stalkers get a taste of their own medicine: After taking a close, close look at several apps seemingly made to help stalkers track unknowing victims, the FTC has taken its first-ever action against such technology.

GREETINGS, TECHLINGS; IT’S WEDNESDAY. WELCOME TO MORNING TECH! I’m your host, Alexandra Levine. Did you know: More than half of Uber riders never tip their driver.

Got a news tip? Write Alex at alevine@politico.com or @Ali_Lev. An event for our calendar? Send details to techcalendar@politicopro.com. Anything else? Full team info below. And don’t forget: add @MorningTech and @PoliticoPro on Twitter.

Tech of the Town

ZUCK TESTIFIES ON LIBRA — Facebook CEO Mark Zuckerberg is the sole witness at today’s much-anticipated House Financial Services Committee hearing, where he’ll testify on Libra, the proposed digital currency his company is trying to get off the ground. The project has faced strong backlash from regulators around the world since being unveiled in June, prompting some of Libra’s biggest backers, including PayPal, Visa, Mastercard, eBay and Stripe, to jump ship in recent weeks. The session marks Zuck’s latest bid at containing political blowback, coming as he’s suddenly become a familiar Washington face amid criticism of Facebook’s handling of private data, misinformation and hate speech, as well as its overall market power.

— He plans to tell House lawmakers that he’s willing to delay the launch of Libra — originally slated for a 2020 rollout — to address regulators and policymakers’ concerns, POLITICO’s Zachary Warmbrodt reports, per an early look at his testimony. And he’ll draw on some of the same themes about Facebook’s dedication to making the world a more open, connected place that he focused on in his speech last week at Georgetown. There, he stressed Facebook’s role in giving people a voice; here, he’ll highlight Facebook’s role in giving people access to a bank account and, in turn, a shot at taking part in the global economy.

— "There are more than a billion people around the world who don’t have access to a bank account, but could through mobile phones if the right system existed,” Zuck plans to say. “Being shut out of the financial system has real consequences for people’s lives—and it’s often the most disadvantaged people who pay the highest price. … The current system is failing them. … I believe this problem can be solved, and Libra can help.” And amid ongoing antitrust probes by lawmakers, federal regulators and 47 attorneys general, Facebook’s industry dominance — including how the proposed cryptocurrency will be affected by Facebook’s market power — is likely to come up at the Libra grilling.

— But Zuckerberg’s willingness to delay Libra’s launch until regulatory concerns are addressed is already falling flat with some critics. “I have a hard time believing that concerns from regulators will be addressed anytime soon,” Democratic Sen. Brian Schatz, who huddled with Zuckerberg to discuss Facebook’s cryptocurrency plans in Schatz’s home state of Hawaii during the August recess, said Tuesday on the Hill. Schatz told POLITICO that his concerns go beyond the “mechanics” of how Libra would work. “I just don’t see any reason for a company of this size that has no expertise in payment systems to get into the currency business,” he said.

STELAR: TO EXPIRE, OR NOT TO EXPIRE? — The Senate Commerce Committee is delving this morning into the debate over whether STELAR, the 2014 satellite TV law set to expire at year’s end, should be reauthorized. The panel will hear testimony from AT&T, the National Association of Broadcasters, Consumer Reports, The Black News Channel and Golden West Telecommunications. Like much of the fight around STELAR reauthorization, the session is poised to focus less on the legislation itself — which lets satellite companies import broadcast signals from other markets, something broadcasters say is obsolete — and more on broader media measures that some lawmakers and TV industry interests hope to peg to reauthorization if it happens.

— Case in point: A recent Consumer Reports deep dive found that hidden fees in cable bills, undisclosed until subscribers are locked into a contract, cost Americans roughly $450 per year on average, amounting to some $28 billion for cable providers annually. The group will call on Congress today to mandate fair and transparent pricing. “In the past decade, cable companies have imposed new fees for features and services previously included in the base advertised rate,” Jon Schwantes, Consumer Reports’ senior policy counsel who is testifying today, said ahead of the hearing. “These sneaky fees enable cable companies to camouflage price increases, confounding consumer efforts to comparison shop and stay within household budgets. … The good news is that Congress, beginning with the Commerce Committee, can act to solve this problem.”

A FIRST FOR THE FTC: ADIEU, CREEPY STALKING APPS — The FTC on Tuesday announced its first-ever action against apps that appeared designed specifically to aid in stalking. The agency barred the developer of three apps made to monitor the whereabouts and activities of employees and children from selling those tools unless there’s a demonstrable, legitimate purpose for such software. “Although there may be legitimate reasons to track a phone, these apps were designed to run surreptitiously in the background and are uniquely suited to illegal and dangerous uses,” said the director of the FTC’s Bureau of Consumer Protection, Andrew Smith. “Under these circumstances, we will seek to hold app developers accountable for designing and marketing a dangerous product.”

Here’s the complaint; here’s the proposed settlement. Among other things, the FTC alleges that Retina-X, the software company that developed these apps, and its owner James N. Johns Jr., violated the children’s federal privacy law known as COPPA.

— A related footnote: The FTC is gathering public input on whether it needs to update its rules protecting kids’ digital privacy under COPPA. The comment deadline was originally today, but the agency last week bumped it to Dec. 9. (Children’s advocates, consumer groups and senators from both sides of the aisle have worried that the FTC could end up weakening federal privacy safeguards for kids.)

SNEAK PEEK: PRIVACY SHIELD REVIEW, CONTINUEDThe European Commission will today both welcome progress and ask for improvements to the EU-U.S. Privacy Shield pact governing the flow of data across the Atlantic, according to the deal's third annual report seen by POLITICO Europe’s Morning Tech. Justice Commissioner Vera Jourová, who is presenting the review, is expected to frame Privacy Shield as both a tool of digital diplomacy and an example of effective transatlantic cooperation. The EU executive body is especially satisfied with the nomination of a permanent ombudsperson and the full slate of the Privacy and Civil Liberties Oversight Board in the U.S. — which the European Commission requested after the last annual review — and also with enforcement action from the FTC against companies that violated the agreement.

— Main areas of improvement: Two priorities are highlighted in the report: The FTC should share with the Commission and European data protection authorities information on ongoing investigations, and the U.S. Department of Commerce should develop tools for detecting false claims of participation in the Privacy Shield from companies that have never applied for certification. The Commission also expects the Commerce Department to shorten the different time periods granted to companies for completing the Privacy Shield recertification process.


Miles Taylor, “a former top staffer at the Department of Homeland Security who had defended a version of the Donald Trump administration's travel ban recently began working at Google” as a government affairs and public policy manager, BuzzFeed News reports. … President Donald Trump on Tuesday named his first members of the President’s Council of Advisors on Science and Technology after leaving the body unfilled for the past two and a half years; here is Trump’s roster. … Former Virginia governor Terry McAuliffe joins Hunton Andrews Kurth as global strategy adviser at the Centre for Information Policy Leadership, the firm’s privacy and cybersecurity think tank, advising members including Facebook, Twitter, Amazon and Google. … Paul Zeineddin, an intellectual property litigator who founded the firm Zeineddin PLLC in 2012, joins Axinn as partner in the firm’s D.C. office.

Plus: “Cryptocurrency startup Ripple is opening a Washington office and adding a former Trump Treasury Department official to its board, bolstering the firm's ability to respond to new scrutiny of the industry sparked by Facebook's foray into digital payments,” POLITICO’s Zachary Warmbrodt reports for Pros. “Ripple's newly expanded team includes global head of government relations Michelle Bond, formerly of the SEC and Senate Banking Committee, plus onetime House aide Ron Hammond and former Treasury official Susan Friedman. Craig Phillips, the Trump Treasury's point man on financial regulation until his departure in June, is joining Ripple's board of directors.”

Silicon Valley Must Reads

If I had a billion dollars: Facebook “will put $1 billion toward affordable housing in California, making it the latest influential tech company hoping to bring some relief to a housing crunch it helped create,” POLITICO reports.

Across the pond, a familiar tune: “The UK parliament has demanded to know why Facebook has decided to exempt political statements from its fact-checking programme — removing all bars on political candidates lying in paid adverts,” The Guardian reports.

Bezos’ bet on outer space: “Jeff Bezos’ space company Blue Origin has teamed up with aerospace giants Lockheed Martin and Northrop Grumman to compete for NASA’s project to return humans to the moon by 2024,” POLITICO reports.

Quick Downloads

In CASE you missed it: The House on Tuesday passed the controversial CASE (Copyright Alternative in Small-Claims Enforcement) Act, H.R. 2426 (116), which would “create a small claims board in the U.S. Copyright Office where creators can have their copyright disputes adjudicated.” Some tech-focused groups (the Electronic Frontier Foundation, for example) oppose the bill.

Census threats: A bipartisan group of former Census Bureau directors wrote a letter urging Congress “to allocate a full-year appropriation for the 2020 Census as soon as legislatively possible, to avoid disruptions in the launch and steady implementation of robust census operations.”

Opinion: “What anti-tech crusaders on social media get wrong,” via Jason Oxman, president and CEO of the Information Technology Industry Council, in Fox Business.

Tips, comments, suggestions? Send them along via email to our team: Kyle Daly (kdaly@politico.com, @dalykyle), Nancy Scola (nscola@politico.com, @nancyscola), Steven Overly (soverly@politico.com, @stevenoverly), John Hendel (jhendel@politico.com, @JohnHendel), Cristiano Lima (clima@politico.com, @viaCristiano) and Alexandra S. Levine (alevine@politico.com, @Ali_Lev).


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