Emerging Technologies Washington Update May 2019 #4

McGuireWoods Consulting

This Week: Senate Judiciary Committee Scrutinizes Privacy and Competition in Digital Advertising, Senator Hawley Introduces Data Privacy Legislation, FAA Announces New Drone Advisory Committee Members.

Week in Review

With lawmakers scheduled to leave Washington tomorrow for a week-long Memorial Day recess, congressional leaders are still negotiating a disaster aid package in hopes of sending it to the President for his signature tomorrow. Outside of those negotiations, Senate Majority Leader McConnell (R-KY) continued to process pending nominations this week as the President sent a dozen more judicial nominees to the Senate. Earlier today, the Senate passed the TRACED Act in a 97-1 vote. The bill, introduced by Senators Thune (R-SD) and Markey (D-MA), aims to curb abusive robocalls.

This week, Senators Burr (R-NC) and Manchin (D-WV) cosponsored the Social Media Privacy Protection and Consumer Rights Act, legislation Senators Klobuchar (D-MN) and Kennedy (R-LA) introduced earlier this year aimed at improving transparency and giving consumers more recourse in cases of data breaches. Rep. DelBene (D-OR) also continues to build support among her Democratic colleagues for her Information Transparency & Personal Data Control Act, with Reps. Spanberger (D-VA) and Larsen (D-WA) signing on this week.

The House Appropriations Committee continued to make progress on its FY20 spending bills this week, including its nearly $74 billion Commerce-Science-Justice (CJS) bill, which funds the Department of Commerce, NASA, and the National Science Foundation, among other agencies. 

During the first of two House Oversight and Reform Committee hearings Wednesday on facial recognition technology, Chairman Cummings (D-MD) indicated his panel will hold its second hearing in June and that he plans to introduce legislation to impose a moratorium on government use of the technology until there are mechanisms in place to address privacy and other concerns. Meanwhile, the Senate Commerce Committee postponed a hearing this week on “Optimizing for Engagement: Understanding the Use of Persuasive Technology on Internet Platforms” due to a Senate-wide briefing on Iran. A new date has yet to be announced.

The New Democrat Coalition Technology Task Force released its mission statement for the 116th Congress this week, underscoring a commitment to “ensure that every American has the opportunity to benefit from the economic opportunities and advancement of our technology without sacrificing basic consumer protections and privacy.” Reps. Soto (D-FL), Davids (D-KS), Horn (D-OK), and Rouda (D-CA) co-chair the Task Force, which plans to develop near- and long-term policy proposals informed by stakeholder input.

Looking Ahead

The President will arrive in Tokyo this weekend, where he will meet the country’s new emperor and hold trade talks with Prime Minister Shinzo Abe. Congress will be in recess next week and will return to Washington the first week of June. Looking ahead, the Senate Commerce, Science, and Transportation and House Energy and Commerce Committees are both planning hearings on the media marketplace in early June as they look to reauthorize STELA before it expires at the end of the year.

In addition to prioritizing nominations, Senate Majority Leader McConnell (R-KY) will also move to bring the FY20 National Defense Authorization Act (NDAA) to the floor in the coming weeks after the Senate Armed Services Committee approved its bill authorizing $750 billion this morning on a 25-2 vote. The House Armed Services Committee will begin marking up its bill the first week of June. 

Senate Judiciary Committee Scrutinizes Privacy and Competition in Digital Advertising

The Senate Judiciary Committee convened a hearing this week on “Understanding the Digital Advertising Ecosystem and the Impact of Data Privacy and Competition Policy.” Discussion spanned a variety of topics, ranging from concerns with consolidation in the digital advertising market and alleged discriminatory content filtering to consumer privacy and the development of a federal privacy framework. While there was disagreement amongst panelists as to the threat posed by the growing dominance of online platforms like Facebook and Google, all agreed on the importance of a federal consumer privacy framework that prevents a patchwork of inconsistent state laws.

In addition to discussion of a federal consumer privacy framework, several Committee members questioned panelists on behavioral advertising and potential government oversight of related business practices. Specifically, Chairman Graham (R-SC) asked whether policymakers should regulate contextual and behavioral advertising differently. Yale School of Management’s Professor Fiona Scott Morton argued that policymakers should focus instead on antitrust concerns more broadly and work to safeguard market competition. Meanwhile, Senator Hawley (R-MO) expressed doubts as to the societal benefits of behavioral advertising, arguing that companies are spending money on high-priced ads rather than investing in improvements to their underlying product. Professor Scott Morton agreed, arguing that increased spending on advertising has resulted in lower quality digital content.

Additionally, Committee members referenced the European Union’s €2.42 billion fine levied in June 2017 against Google after an investigation concluded that the company promoted its own comparison shopping service in search engine results to the detriment of competitors. Senator Blackburn (R-TN) asked Professor Scott Morton to comment on search result manipulation practices and their impact on competition and market access for startup companies. Professor Scott Morton stated that these practices have an adverse impact on companies like TripAdvisor and Yelp, adding that consumers will often not search beyond the top results when using an online search engine.

Hawley Introduces Data Privacy Legislation

On Monday, Senator Hawley (R-MO) introduced the Do Not Track Act to allow consumers to prevent online platforms from collecting data beyond what’s needed to fulfill company services. The legislation is similar to the national Do Not Call list and would also prohibit companies from profiling or discriminating against users who choose to activate the Do Not Track program. In a press release, Senator Hawley stated that “big tech companies collect incredible amounts of deeply personal, private data from people without giving them the option to meaningfully consent. They have gotten incredibly rich by employing creepy surveillance tactics on their users, but too often the extent of this data extraction is only known after a tech company irresponsibly handles the data and leaks it all over the internet. The American people didn't sign up for this, so I'm introducing this legislation to finally give them control over their personal information online.” The bill gives consumers several options for enrollment, including settings for internet browsers and mobile applications. Senate Judiciary Committee Ranking Member Feinstein (D-CA) signed on as a cosponsor yesterday.

FAA Announces New Drone Advisory Committee Members, Next Meeting

This week, the Federal Aviation Administration (FAA) announced that PrecisionHawk CEO Michael Chasen will chair the Drone Advisory Committee (DAC), a federal advisory committee tasked with advising the FAA on its unmanned aircraft systems (UAS) integration efforts. Secretary of Transportation Elaine Chao also appointed 12 new members to the Committee selected from over 200 applicants that responded to a December solicitation for nominations. DAC members represent both the manned and unmanned aviation communities, as well as academia, local government, labor, and other stakeholders. The DAC will next meet on June 6 in Arlington, Virginia immediately following the FAA’s fourth annual UAS Symposium June 3-5 in Baltimore.

In the meantime, OMB published its Spring Unified Agenda this week, which again delays the expected date by which the FAA plans to publish a notice of proposed rulemaking (NPRM) for remotely identifying drones from July to September. For more on this rule and others related to drones, click here.

Senate Artificial Intelligence Caucus Leaders Propose National AI Strategy and $2.2 Billion R&D Investment

This week, Senate AI Caucus co-chairs Senators Heinrich (D-NM) and Portman (R-OH), together with Senate Commerce Communications, Technology, Innovation, and the Internet Subcommittee Ranking Member Schatz (D-HI), introduced the bipartisan Artificial Intelligence Initiative Act (AI-IA). The legislation directs the development of a national strategy for artificial intelligence investment and deployment through a new National AI Coordination Office, an AI Interagency Committee, and an AI Advisory Committee comprised of non-governmental subject matter experts. The AI-IA would also establish dedicated AI initiatives within the National Institute of Standards and Technologies (NIST), National Science Foundation (NSF), and the Department of Energy (DOE). Further, the legislation would allocate $2.2 billion in federal funding over five years to support AI research and development, as well as to build an AI-ready workforce.

In introducing the legislation, both Senators Heinrich and Portman underscored the importance of addressing growing threats from other nations seeking to eclipse U.S. leadership in AI technology. “Right now, China is engaging in a full court press to unseat the United States’ dominance in AI. By coordinating and synchronizing our country’s research and development efforts, this bill ensures not just that the United States remains an AI leader, but that it does so by developing AI technology that prioritizes American values,” Portman stated. “...the gap is closing quickly, and the United States will only continue its leadership position if it acts with a sense of urgency and purpose,” Heinrich added.

The bill comes days before a May 30 NIST workshop coordinated to advance development of a plan for federal engagement in artificial intelligence standards. The workshop coincides with a NIST request for information (RFI) announced May 1 soliciting feedback to inform the development of technical standards and related tools to advance “reliable, robust, and trustworthy systems that use AI technologies.”

FCC to Consider New Rules to Support Aviation Safety and Innovation

In recognition of a need to update its aviation spectrum technical and service rules to accommodate new innovations, the Federal Communications Commission will vote on a Notice of Proposed Rulemaking (NPRM) at its June 6 Open Meeting. The draft NPRM seeks comment on a number of issues including allocation of spectrum for new technologies such as Enhanced Flight Vision System radar, authorization to use a specific spectrum band for operational control communications to allow for the data communications component of the Next Generation Aviation System, service rules for Aeronautical Mobile Airport Communications System (AeroMACS), and clarifications to existing rules to accommodate aeronautical advisory stations, which provide greater information flows (flying conditions, weather, availability of ground services, and other information) to promote the safe and expeditious operation of general aviation aircraft. Following the Commission’s vote on the NPRM, there will be a 30-day public comment period during which stakeholders can comment on the various proposals in the NPRM.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Updated: May 25, 2018:

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