California Gov. Gavin Newsom (D) signed legislation into law that makes social media companies liable for “knowingly facilitating, aiding, or abetting commercial sexual exploitation,” his office announced Sunday. Introduced by Assemblymember Buffy Wicks (D), AB 1394 allows courts to award damages between $1 million and $4 million for each infraction in which a company facilitates, aids or abets exploitation. The law, which takes effect in January 2025, requires platforms to provide a way for users to report child sexual abuse material. Platforms must respond to a report within 36 hours. The new law “sends a resounding message to other states and tech platforms that using the internet to exploit children will no longer go unchecked,” Wicks said in a statement.

Consumers have reported losing $2.7 billion to social media-originating scams since 2021, the FTC said Friday. That compares with $2 billion in reported losses on non-social media websites and apps, $1.9 billion via phone, $900 million via email and $600 million via text. Statistics from the first half of 2023 show 44% of consumer reports in the social media category involved online shopping fraud. Most of the reports were filed by people “who never received the items they ordered after responding to an ad on Facebook or Instagram,” the agency said. Investment schemes were 20% of social media loss reports, and romance scams were 6%, the FTC said.

The FTC should investigate whether the dating app Grindr illegally retained and shared user data, the Electronic Privacy Information Center wrote in a complaint filed with the agency Wednesday. Citing court filings in a wrongful termination lawsuit from Grindr’s former chief privacy officer, EPIC alleged the company retained and shared the data of users after they deleted the app. This included messages, photos and sensitive health data like HIV status, said EPIC. The agency should explore whether Grindr violated the FTC Act and health care privacy laws, said EPIC. The company and agency didn't comment.

Global spending on compute and storage infrastructure products for cloud deployments increased 7.9% year over year in Q2 to $24.6 billion, IDC reported Monday. Non-cloud spending declined 8.3% Q2 to $14.4 billion, IDC said. "Cloud infrastructure spending is shifting towards robust configurations geared towards more complex workloads and new AI initiatives," said Juan Pablo Seminara, research director with IDC's Worldwide Enterprise Infrastructure Tracker: "Despite the steep decline in system unit demand for the first half of the year, the spending outlook for 2023 remains positive with growth centered on the expectation that higher [average selling prices] will remain for the rest of the year."

Large traffic generators must be legally required to pay network costs, 20 European telcos said Monday. European Telecommunications Network Operators Association and GSM Association CEOs jointly urged policymakers to enact "fair share" legislation, revise spectrum policy and accept "the need for scale to avoid market fragmentation" to ensure the EU meets its 2030 Digital Decade targets. "The key to this debate is investment," the companies said. The EU estimated at least $184 billion of new investment is needed by 2030 to achieve connectivity targets, but the telecom sector "is currently not strong enough to meet that demand." At the same time, they wrote, data traffic has mushroomed at an average rate of 20%-30% per year, driven primarily by "just a handful of large tech companies." That growth is expected to continue, but under current conditions it won't result in a corresponding return on investment, they said. Retail prices for telecom services have fallen over the past 10 years, costs increased and new technologies will create even more demand on underlying network infrastructure, they wrote. Operators want legislation that follows "a well-defined and targeted scope addressing only the very largest traffic generators, while excluding smaller content and application providers." Signers included executives from BT Group, Deutsche Telekom, Orange, Vodafone and Telefonica. Their letter was criticized by the Computer & Communications Industry Association, whose members include large content providers such as Meta and Google. "Big telcos are not asking for a 'fair contribution,'" emailed CCIA Europe Head of Office Daniel Friedlaender. Instead, the incumbents have "grown thanks to exciting content and services developed by creative and tech firms, which telcos often bundle to drive consumer interest in fibre or 5G subscriptions." Friedlander accused operators of trying to "fool Europe into providing them with extra cash" by having their networks fully subsidized by the companies that have helped them grow and thrive.

Congress should prohibit the intelligence community from accessing Americans’ communications gathered through Foreign Intelligence Surveillance Act Section 702 without authorization from the FISA court, the Privacy and Civil Liberties Oversight Board said in a report released Thursday. Congress is considering reauthorizing FISA Section 702 (see 2307190049), which expires in December. Section 702 allows warrantless surveillance of non-American citizens outside the U.S. and has resulted in the incidental collection of American citizens’ data. PCLOB recommended Congress require Foreign Intelligence Surveillance Court review and approval for the government to access results of queries using “U.S.-person” terms. “Court approval for U.S. person queries is the only way to both protect security and guard against surveillance abuse,” said Jake Laperruque, Center for Democracy & Technology's deputy director-Security & Surveillance Project.

DOJ and the FTC will host workshops Oct. 5 and Nov. 3 on their effort to update the merger guidelines, the agencies said Wednesday. Enforcers are reviewing public comments on their initial draft document (see 2309180059).

The FTC will gather public comment on the U.S. Chamber of Commerce’s petition to change the agency’s recusal rules, the FTC said in a Federal Register notice scheduled for Tuesday publication. The commission voted 4-1 in 2021 to change its rulemaking petition procedures (see 2109150061). The changes require the agency to publish all petitions for rulemaking and solicit public comment. The U.S. Chamber filed the petition Sept. 13, raising concerns about Chair Lina Khan’s decision not to recuse herself from proceedings on Meta’s buy of Within Unlimited, despite an FTC ethics official’s recommendation that she do so (see 2309200070). The public has until Oct. 26 to comment on the petition, based on the scheduled publication. The petition seeks new rules requiring commissioners to request and receive written legal guidance from agency ethics officials and share in writing any decisions not to follow their guidance. Senate Commerce Committee ranking member Ted Cruz, R-Texas, and House Commerce Committee Chair Cathy McMorris Rodgers, R-Wash., repeatedly criticized Khan’s handling of the Meta recusal and decision not to publish details from the ethics official. The rules would require commissioners to recognize that impartiality concerns extend beyond financial conflicts of interest.

Intense talks are ongoing between "gatekeepers" designated under the EU Digital Markets Act (DMA) and the European Commission as the compliance date of March 7, 2024, approaches, an EC official said Monday at a hybrid Politico panel. The six large tech giants -- Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft -- were named as gatekeepers earlier this month (see 2309060002). They were so identified because they have a certain annual revenue in the European Economic Area and provide platform services in at least three EU countries; offer core platform services to more than 45 million monthly active end users in the EU and over 10,000 yearly active businesses established in the EU; and if they met the second criterion over the past three years. The companies and EC are talking extensively about compliance plans because no one wants to be surprised March 7, said Thomas Kramler, EC Competition Directorate head of unit, digital platforms III. The EC is also, however, seeking input from third parties on compliance proposals, and wants concrete, technical feedback to "reality-check" platforms' information, he said. New gatekeepers may be designated after January 1 if businesses find they meet the required criteria, said Member of the European Parliament Andreas Schwab, of the European People's Party and Germany, rapporteur for the DMA. Unlike with competition law, the DMA puts the burden on gatekeepers to prove compliance rather than on the EC to show anticompetitive behavior, Kramler said. The DMA is about size, said Schwab: in cases where companies don't meet the criteria for classification as gatekeepers, competition law continues to apply. Asked how they will measure the law's success, Spotify Director-Global Policy Avery Gardiner said she'll consider how many innovators decide to make Europe their home, and what impact the DMA has on pricing and user experience. The DMA is about creating opportunities, so the first yardstick of success will be if businesses take advantage of those opportunities, Kramler said. Gatekeepers have the right to challenge their designations in court, he noted. Politically, the platforms have big interest in embracing the new rules to protect themselves against national antitrust authorities, Schwab added.

The FTC will host an Oct. 4 virtual roundtable on generative AI’s impacts on “creative fields,” the agency announced Friday. Chair Lina Khan will give opening remarks, followed by panel discussions with to-be-determined speakers. The discussions “will explore the ways that these emerging tools are reshaping each of the participants’ respective industries and how they are responding to these changes,” the agency said.