Karl Herchenroeder

Microsoft accepts “every finding” in the Department of Homeland Security’s report about a 2023 Chinese cyberattack against the company, President Brad Smith told the House Homeland Security Committee on Thursday.

Four tech industry groups on Tuesday joined in opposing a kids’ social media legislative proposal advancing in Pennsylvania, despite support from their member Google (see 2406060062). The Computer and Communications Industry Association, NetChoice, TechNet and Chamber of Progress oppose the Online Safety Protection Act (HB-1879). Pennsylvania’s House Children and Youth Committee voted 15-9 to pass the bill Tuesday, with one Republican in favor. The legislation would require online platforms consider the “best interests of children” when developing products and features “children are likely to access.” Violators would face potential civil penalties enforced by the attorney general. CCIA and NetChoice have argued similar measures passed in California, Maryland and Vermont are unconstitutional, given the free speech implications for children. Committee staff on Tuesday listed Google as a supporter and the four associations as opponents. Google previously declined comment on why it supports the measure, and the company didn’t comment Tuesday. Chair Donna Bullock (D), who wrote the bill, successfully passed an amendment Tuesday with new language meant to address critics’ concerns about “vague” wording outlining what keeping children’s “best interests” in mind means. However, Rep. Charity Grimm Krupa (R) said the amendment fails to address concerns from Attorney General Michelle Henry (D) about enforceability. Krupa said she agrees with ranking member Barry Jozwiak (R), who previously said the bill is unenforceable due to its “overly broad” terms and definitions. The measure's intent is “good,” but sponsors haven’t addressed issues raised by Jozwiak, Henry and the industry groups, she said. Henry’s office didn’t comment Tuesday. Bullock said parents have an obligation to show children how to use social media platforms safely, but they can’t “do it alone.” Parents don’t understand every aspect of the technology and what’s “happening behind the scenes,” she said. Platforms should make these services “age-appropriate” and prioritize the safety of children over profits, she added.

New York will soon require social media platforms to obtain parental consent when using algorithms to sort feeds for minors.

Google is unwilling to publicly support a kids’ social media proposal in Pennsylvania, despite the House Children and Youth Committee announcing the company’s backing Wednesday (see 2406050055).

The FTC wants to make “clear” that sharing certain types of sensitive data is “off-limits,” and the agency is paying close attention to AI-driven business models, Consumer Protection Director Samuel Levine said Wednesday. Speaking at the Future of Privacy Forum’s D.C. Privacy Forum, Levine highlighted instances where the FTC has reached settlements with data privacy violators that include prohibitions on sharing certain types of data. He noted five cases where the FTC banned sharing of health information in advertising, another case banning sharing of browsing data for advertising and at least two other cases in litigation in which the agency wants to ban sharing sensitive geolocation data. “We have made clear in our words, in our cases, complaints that certain uses of sensitive data can be off-limits.” FTC Chair Lina Khan has made similar remarks in the past (see 2401090081 and 2208290052). Levine said banning those practices will depend on the agency’s three-part FTC Act test for unfairness. Data sharing practices violate the FTC Act if they cause or are likely to cause substantial consumer injury, can’t be reasonably avoided by consumers and the potential harm isn’t outweighed by “countervailing” benefits to consumers or competition. So much of how “people experience” social media platforms and how data is handled is driven by behavioral advertising business models, said Levine. Some companies are clear about the business model incentives for AI, while other companies are “not being as clear,” he said. “It’s not illegal to want to make money. We want that in this country, but we do want to think about how these business models shape development of the technology and contribute to some of the harms we’ve seen.” It makes sense the director has a “strong view” there’s a “wide range” of statutory authority for the FTC when it comes to AI-driven data practices, said FPF CEO Jules Polonetsky. The FTC already has a “substantial ability” to enforce against AI-related abuse under its consumer protection regulations, Polonetsky told us. However, hard societal questions surround the technology that only Congress can answer, and that starts with a federal data privacy law, he said.

It’s a “good thing” business leaders are thinking harder about antitrust risk when pursuing potential deals, even if the Biden administration’s policies have been “disorienting,” FTC Chair Lina Khan said Tuesday. Khan and DOJ Antitrust Division Chief Jonathan Kanter defended their antitrust approach during CNBC's CEO Council Summit.

The Copyright Office (CO) last week gathered feedback from broadcasters, streamers and songwriters on the potential redesignation of the entity that administers digital streaming royalties under the Music Modernization Act (MMA) (see 2208150042). President Donald Trump signed the MMA into law in October 2018, establishing the mechanical licensing collective (MLC). The MMA -- a years-long negotiation and legislative compromise among music industry, broadcast and streaming entities -- modernized the royalty payment system for the digital era. The MMA requires the CO to review the MLC’s designation every five years. The first review began in January, and reply comments are due June 28. The MIC Coalition, which includes NAB, CTA, the Computer & Communications Industry Association and the Digital Media Association, didn’t take a position on the MLC’s redesignation. But the coalition recommended the CO require the MLC to incorporate performance rights organization data into the musical works database to help members more efficiently handle payments. The MLC’s current database lacks comprehensive information for all four performing rights organizations, they said. The National Music Publishers’ Association and Nashville Songwriters Association International (NSAI), organizations that hold MLC board seats, recommended renewal. NMPA said it opposes proposals that "erode the proper functioning or funding of the MLC as explicitly laid out in the statutory text.” The MLC has “succeeded in fulfilling all of its obligations with the lowest operating budget of any known license administration collective in the music publishing industry,” said NMPA. The MLC’s operating costs, as a percentage of royalties it processes, was 3% in 2023, it said. Collective management and performing rights organizations typically take a 10%-20% commission, NMPA said. NSAI acknowledged there are areas for improvement but said the MLC has “exceeded everyone’s expectations in its first four years of operation. It is efficiently and effectively licensing, collecting and distributing royalties in a way our industry has not seen before.” Songwriters of North America said the existing MLC should be renewed, but the organization needs to address issues with the transfer and accuracy of the database.

California is considering some “awful” regulations for AI, tech entrepreneur Andrew Ng said Thursday. His comments came a day after California Gov. Gavin Newsom (D) warned state lawmakers against overregulating AI.

The House Innovation Subcommittee on Thursday passed a federal privacy bill and a kids’ privacy bill despite objections to the latter from House Commerce Committee ranking member Frank Pallone, D-N.J.

Policy discussions are hopefully “boiling to the point” where Congress can repeal Communications Decency Act Section 230, House Commerce Committee ranking member Frank Pallone, D-N.J., told us Wednesday. He and Chair Cathy McMorris Rodgers, R-Wash., said the parallel efforts of Senate Judiciary Committee Chairman Dick Durbin, D-Ill., and ranking member Lindsey Graham, R-S.C., are encouraging.