With help from Doug Palmer, Mark Scott, Cristiano Lima, Leah Nylen and John Hendel
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— Digital tax green light: The Brits confirmed they’ll introduce a digital services tax of 2 percent in April that would affect U.S. social media giants, search engines and online marketplaces.
— 2020 chatter: Former Vice President Joe Biden has broadly run on Barack Obama’s legacy, but unlike most rivals including Bernie Sanders, his campaign is making no promises on reinstating Obama-era net neutrality rules.
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U.K. DIGITAL SERVICE TAX A GO IN APRIL — The British government on Wednesday confirmed plans to begin implementing a new digital services tax on April 1, drawing fire from Senate Finance Chairman Chuck Grassley and tech industry groups, but silence from the Office of the U.S. Trade Representative.
— “I’m disappointed, just like I’m disappointed that France did it and the only way to solve this is through negotiations at the OECD,” Grassley told reporters. He said he thought the Trump administration had an understanding with British Prime Minister Boris Johnson that implementation of the tax would be delayed. But London said it would not postpone the tax until after a global deal on digital taxes was hammered out — something that Paris and others had promised to do.
— Both the Internet Association and the Computer and Communications Industry Association criticized the U.K.’s proposed tax, which they see as an unfair trade barrier aimed primarily at U.S. tech companies like Google, Facebook, Amazon and Apple.
— But while the new tax starts accruing on April 1, companies will not have to begin making payments until sometime in 2021, a British Embassy spokesperson confirmed. That gives negotiators at the Organization for Economic Cooperation and Development until the end of the year to try to reach a deal. USTR had threatened tariffs on France after it approved a digital services tax last year, but the Trump administration put those on hold after France agreed to delay collection of the revenue until the end of 2020.
BIDEN VS. BERNIE ON NET NEUTRALITY — “Democrats once touted net neutrality as political dynamite, but now hardly any seem to realize their party’s presidential frontrunner has said nothing about it… a key difference between Joe Biden and Bernie Sanders as they vie to secure the Democratic presidential nomination,” John reports in a new dispatch. He notes that, unlike Sanders and virtually everyone else in this year’s once-crowded Democratic field, Biden has not championed the Obama-era net neutrality regulations that Trump’s FCC repealed — and “few Democrats — even his strongest supporters — seem aware or remotely concerned.”
— Does that mean Biden can skate on net neutrality forever? Maybe not. “I think if he does diverge from it, there’ll be a price to pay,” said Gigi Sohn, a top adviser at the Obama-era FCC that crafted the regulation.
MORAN DEBUTS STANDALONE PRIVACY, SECURITY BILL — Moran (R-Kan.) is unveiling a solo data privacy and security bill today that would override state laws, ban companies from collecting user data unless they obtain consent and require firms to take added steps proportionate to their size to safeguard users’ personal information. The Consumer Data Privacy and Security Act is the latest privacy proposal vying for support on Capitol Hill, where bipartisan talks have come to a screeching halt amid partisan policy disagreements.
— “It is clear that Congress needs to act to provide consumers and companies with a clear federal standard that lays out robust protections for consumers’ personal data,” Moran, chairman of the Commerce Subcommittee on Consumer Protection, said in a statement. The bill would additionally grant the FTC targeted rulemaking authority and the ability to issue fines against first-time offenders.
— Who is not on the bill: The measure notably lacks the backing of Sen. Richard Blumenthal (D-Conn.), who for months sought to strike a deal on data privacy legislation with Moran. Both were members of the original Senate Commerce working group on privacy, which informally disbanded mid-last year. It’s yet another sign that officials in Washington remain unable to find compromise on the few key issues that have bedevilled lawmakers for over a year.
AND ABOUT THAT TIKTOK BAN — Republican Sens. Josh Hawley (Mo.) and Rick Scott (Fla.) unveiled legislation today that would ban federal employees from using the Chinese-owned video app TikTok on government-issued work phones, building on similar bans by the State Department, Department of Homeland Security, Department of Defense, and TSA.
— TikTok “is required by law to share user data with Beijing,” Hawley, an outspoken tech critic and China hawk, said in a statement. “As many of our federal agencies have already recognized, TikTok is a major security risk to the United States, and it has no place on government devices.” The company has expressly denied ties to the Chinese government.
FIERY ‘EARN IT’ DEBATE JUST GETTING STARTED — A Senate Judiciary Committee hearing on an anti-child-abuse bill that targets the internet industry’s legal liability protections caused sparks to fly Wednesday, and it’s only the beginning. Lawmakers said they anticipate more hearings to follow, and more officials to join them in their push.
— Support bubbling up in Congress: Blumenthal said Wednesday he expects a bipartisan companion bill to emerge in the House. “I know a number of House members want to do it,” he told reporters, declining to provide specifics. And the lead sponsors are bullish about the prospects in the Senate. “I’ve got 10 co-sponsors,” Chairman Lindsey Graham (R-S.C.) said at the hearing. “I think if we voted, we’d get a lot of votes.” Sen. John Neely Kennedy (R-La.) indicated Wednesday he plans to co-sponsor the bill, bringing that number up to 11.
— Another hearing in the works: Graham teased plans for a follow-up session featuring law enforcement officials. “I’m going to get with DOJ and some people out in the field and see what they think of this,” he told reporters.
— The threat of more severe action: Backers of the bill had a stern message for tech on Wednesday — get behind this or face potentially more drastic measures. Graham told reporters he would seek a broader carve-out of tech’s liability shield related to child abuse if the EARN IT Act falters. “I don’t want to take it away because I don’t want to hurt innovation, but if the choice is to continue the status quo, we’ll have a carve-out for Section 230,” he said.
MORE WORK NEEDED ON VERTICAL GUIDELINES — The United States’ two antitrust agencies heard from lawyers, academics and industry representatives Wednesday on an update to its guidelines on vertical deals — and most said the DOJ and FTC have more work to do. The most debated part of the guidelines: a 20 percent market-share threshold or screen for when vertical mergers raise issues. “I hear these concerns loud and clear,” FTC Commissioner Christine Wilson said in remarks opening the workshop. But Wilson said a screen would help the agency determine where to focus its attention. “We need to draw the line for case selection somewhere.”
— Some commenters praised the threshold but said it should be higher. (The EU’s guidelines on vertical deals, for example, use a 30 percent threshold.) But most speakers broke the other way. Jonathan Sallet, who served in the Obama administration at both at the FCC and DOJ’s antitrust division, questioned the threshold given the limited knowledge about vertical deals. “There’s no obvious basis for use of the 20 percent number,” said Sallet, a fellow at the Benton Institute for Broadband & Society and antitrust adviser to Colorado’s attorney general. “The right thing to do is treat this as a question that still needs to be answered.”
— Tech-specific guidance: Public Knowledge’s Charlotte Slaiman and Avery Gardiner of the Center for Democracy and Technology also pushed for more clarity on when deals are problematic, particularly in tech sectors. Because tech markets tend to create one dominant player, vertical deals might entrench power more than in other industries, Slaiman said.
PAI: TRUMP DOESN’T UNDERMINE FCC’S INDEPENDENCE — FCC Chairman Ajit Pai maintains that the Trump administration hasn’t sought to exert its will over the decision-making of the commission, an independent agency not subject to executive command. “Not the case,” Pai told House appropriators during a hearing Wednesday. That’s apparently despite President Donald Trump occasionally reaching out to the agency chief, as he did last year on a coming C-band airwaves auction.
— Senate Commerce, meanwhile, heard from Chase Johnson, the administration’s nominee for FCC inspector general, during another Wednesday hearing. Johnson told lawmakers he expects that the hardest part of the job will be “prioritization [of] investigations” and to “intelligently pick where you use your resources.” Sen. Jon Tester (D-Mont.) warned “it could potentially get tense with Chairman Pai,” and Johnson said the key will be doing “work that is unimpeachable.” Johnson will require a Senate vote before assuming the IG post.
— And top Senate Democrats including Minority Leader Chuck Schumer (D-N.Y.) joined with Republican Colorado Sen. Cory Gardner to write to Pai this week warning about how he’s setting up his Rural Digital Opportunity Fund, a $20 billion pot of broadband subsidies. They warn that he’s “penalizing states that have taken the initiative to create broadband programs” by limiting their participation. Pai has argued he simply doesn’t want a company to be subsidized twice for doing the same thing.
Monique Meche joins Twitter to oversee its public policy, government and philanthropy efforts worldwide; Jessica Herrera-Flanigan is also joining the social media company as vice president of the Americas, supporting Twitter’s public policy team in D.C. and across two continents.
Pandemic meets plagiarism: Some of Amazon’s top books on coronavirus were plagiarized from stories by news outlets including NBC and The Guardian, NBC News reports; the books’ authors have, in many cases, been found to be fake identities.
OSTP on COVID-19: The White House Office of Science and Technology Policy convened a meeting with leading tech companies to discuss tech’s coronavirus efforts, Steven reports for POLITICO.
West Coast on COVID-19: “In the heart of America’s technology industry and the epicenter of coronavirus’ rapid spread in California,” local leaders have taken the fight into their own hands absent federal direction, POLITICO reports.
First in MT: As part of its online Coronavirus Response Toolkit, the National Association of Broadcasters is distributing PSAs to radio and TV stations to educate Americans on how to prevent the spread of COVID-19.
ICYMI: “Republicans have spent more than a decade honing Texas into a magnet for new jobs and industries, and if they’re not careful they’ll engineer themselves out of power,” Renuka Rayasam reports for Pros. … “Just a few years after the state began attracting firms like Apple, Uber Technologies and Facebook, Democrats began notching political wins and posing a serious threat to Republicans.”
T-Mobile-Sprint latest: The telecom megamerger is nearing the finish line, Leah reports for Pros.
Clearview, cont’d: Reporting by Medium’s tech and science publication, OneZero, reveals how Clearview AI was advertising to police departments across the country: “Clearview is like Google Search for faces.”
Throwing away the throwaway society: A new European Commission plan for combating waste and encouraging recycling has implications for tech, including making products easier to repair and demanding a common charger, POLITICO Europe reports.
And a fun one: Protocol looks at how tech couples confront the awkward close quarters of working from home.
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