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Congress is gearing up for a fight with Big Tech over privacys

A working group in the Senate wants new limits and a more powerful FTC to enforce them.

by Matt Laslo
Mar 11 2019, 4:16pm

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WASHINGTON — Last week Facebook CEO Mark Zuckerberg announced that the future of Facebook is not harvesting user data on a massive scale, a model that has made it one of the most valuable companies in the world. Rather, he said, the company would focus on building tools to keep communication — and data — private.

”I believe a privacy-focused communications platform will become even more important than today's open platforms,” he wrote.

But there’s another reason for Facebook to focus on privacy: Congress and state legislators are moving forward with privacy legislation that will largely end the laissez-faire regime that currently governs the American internet, and has enabled the company to become a $40 billion advertising juggernaut.

A bipartisan group of four senators are now ramping up their work behind the scenes, capitalizing on simmering congressional rage over multiple data breaches, the Cambridge Analytica scandal, and Zuckerberg’s own performance in front of Congress last spring when he said users have “complete control” over their data. Some have even accused him of lying to Congress.

“They either misled, or the people that run the company [don’t] know — it’s so complicated they don’t know everything that’s going on. And I don’t know which it is,” Sen. Chuck Grassley (R-Iowa), former chairman of the Judiciary Committee, told VICE News.

Breaking up Big Tech

But that’s not the worst thing that could happen to Facebook: California implemented its own privacy law last summer, and newly elected Gov. Gavin Newsom has proposed a “data dividend” that users would be paid by the platforms for accessing their data.

If the federal government doesn’t come up with a national law soon, Facebook and the rest of Silicon Valley could face a patchwork of state laws.

A national privacy law would be one of the least-bad legislative outcomes for Silicon Valley. Declared 2020 candidate Sen. Elizabeth Warren (D-Mass.) just last week proposed a detailed plan to break up Big Tech, as well as a requirement that platforms with revenue over $25 billion be classified as “utilities” with additional responsibilities around data sharing.

“There is more and more bipartisan feeling that something has to be done,” said Sen. Richard Blumenthal, a Democrat of Connecticut who’s also member of the working group, along with Sen. Jerry Moran, Republican of Kansas, Sen. Brian Schatz, Democrat of Hawaii, and Mississippi Republican Sen. Roger Wicker.

While Democrats came away more aggrieved from the Cambridge Analytica breach, which exposed the data of 87 million Facebook users and helped get Trump elected, more Republicans are keen to lay some ground rules for Silicon Valley.

“I think their views are evolving as we see more about the overreaching and excesses by Big Tech”

“I think their views are evolving as we see more about the overreaching and excesses by Big Tech,” Blumenthal said.

GOP senators also want to head off any more-progressive legislation coming out of the Democrat-controlled House. Many Democrats in the House want to link privacy with the antitrust issue and produce legislation that looks like the European Union’s General Data Protection Regulation (GDPR), which forces tech companies to ask users for permission to sell their personal data to third parties.

“The Senate is not interested in changing fundamentally how Google and Facebook do business,” said Jeff Chester, executive director of the Center for Digital Democracy. “It’s unclear how far the House will go.”

Opting out

But the two parties are still worlds apart in how they view today’s internet. Republicans view the issue through the lens of America’s “free market,” while Democrats say it’s past time for the government to step in and protect citizens' personal data.

Grassley’s open to giving users say over how private corporations are able to use their information, including stopping them from selling it to third parties. But he’s also worried about legislation going too far.

“I come from the standpoint that it’s been successful because it’s free, and I’m not sure I want to do something that’s going to add a lot of cost for the consumer,” Grassley said.

Democrats, meanwhile, are looking to give Americans much more control. Some want to let users opt out of allowing tech firms to collect their data, like when they log in to a site, or make it easier for consumers to sue companies who breach their data trust.

Axios reported that Sen. Mark Warner, Democrat of Virginia, is working on legislation that would require platforms like Google and Facebook to let users know the value of the data they hold and how it was gathered, as well as report those numbers to the Securities and Exchange Commission.

Silicon Valley tech companies have testified that if they have to ask permission to use data — a so-called opt-in — it would decimate the ad-supported free services that internet users now take for granted. Last year, Google's chief privacy officer, Keith Enright, testified at the Capitol that his multibillion-dollar company opposes an opt-in requirement, and CEO Sundar Pichai later told Congress that their privacy rules are just fine.

Democrats are hoping the new Congress will hold hearings with experts on privacy law, rather than dragging in Zuckerberg and other tech execs.

“It just becomes a spectacle where their fame and notoriety becomes the question. Their personal performance at the dais becomes the news of the day,” Sen. Schatz said. “It’s theater; that’s the best way to say it. And this is a serious policy matter.”

In addition to national privacy legislation, Schatz is pushing his own Data Care Act that would lay basic ground rules for tech firms to use “care, loyalty, and confidentiality” when handling users' personal data. Schatz says adopting the European model would protect citizens from intrusive actions by the tech companies most of us rely on daily.

“We have to develop that — we don’t have a statutory right to privacy”

“We have to develop that — we don’t have a statutory right to privacy,” said Schatz, who likens his legislation to the way doctors deal with patients or how lawyers interact with clients. “There are different obligations, but the concept is the same: They have to be loyal to you. And it’s not up to you to figure out what you’re going to agree to and not agree to, because you’re not equipped to make those kind of decisions.”

A stronger FTC

That’s why Schatz wants the Federal Trade Commission, which is reportedly negotiating a multibillion-dollar fine with Facebook over privacy breaches, to play a big role in helping Congress implement privacy rules. He also warns against legislation that allows for loopholes.

“If we make a statute that’s too precise, the first thing that will happen is every tech company will get their lawyer and their engineering team to write code around it,” Schatz said.

Republican Sen. Marco Rubio of Florida is skeptical that Congress has the technical knowledge to legislate on privacy, which is why he’s championing a proposal that would require the FTC to draft guidelines and give Congress a window of time to enact them. And then the FTC would implement.

“The question really becomes whether Congress has the expertise to sort of, not just to write the rules, but to adjust them in a rapidly developing industry,” Rubio told VICE News.

Rubio says a part of the problem is that Congress was designed to move slowly, and that’s an institutional hurdle in the fast-paced internet era.

“This is not an industry that moves slowly, and by the time we’re done writing the bill, we’ll have a new set of challenges that didn’t exist when we started,” Rubio said

But whether to give the FTC expansive rule-making authority is a raging debate: It would preempt the patchwork of privacy laws, and lawmakers from states like California with tough privacy regulations fear it could actually loosen their standards.

Tech giants have been pushing back on efforts to give the FTC broad rule-making authority over people’s personal online information, but they definitely don’t want to contend with 50 different privacy laws.

“We support strong and effective privacy legislation in the U.S. that gives people the right to control their information and holds companies to high standards in explaining what data they have and how they use it,” Andy Stone, a Facebook spokesperson, emailed VICE News.

Other Republicans aren’t as eager as Rubio to set up strong, uniquely American privacy rules. Like Republican Sen. Roger Wicker of Mississippi, who now chairs the Senate Committee on Commerce, Science, and Transportation and is a member of the bipartisan working group trying to hammer out a compromise.

While Wicker worries Zuckerberg may have lied to Congress, that’s not why he’s at the negotiating table now.

“To me, that’s troubling, but that’s not the main concern,” Wicker said. “The main concern is having a good, workable law that protects people and doesn’t stymie innovation and doesn’t leave us with a patchwork across the country.”

Last week at a hearing on the FTC’s role in this new world of Big Data, Wicker said it was “clear” new privacy legislation is necessary and should “enhance the FTC’s authority and resources in a reasonable way to police privacy violations.”

Cover image: Mark Zuckerberg, chief executive officer and founder of Facebook Inc., listens during a House Energy and Commerce Committee hearing in Washington, D.C., on Wednesday, April 11, 2018. (Photo: Andrew Harrer/Bloomberg via Getty Images)