Hillicon Valley: Regulators press Congress on privacy bill | Americans mimic Russian disinformation tactics ahead of 2020 | Ocasio-Cortez, Sanders back Uber strike | GOP senator targets ‘manipulative’ video games

by Harper Neidig, Olivia Beavers, Maggie Miller and Emily Birnbaum - 05/08/19 6:00 PM ET

Welcome to Hillicon Valley, The Hill’s newsletter detailing all you need to know about the tech and cyber news from Capitol Hill to Silicon Valley. If you don’t already, be sure to sign up for our newsletter with this LINK.

Welcome! Follow the cyber team, Olivia Beavers (@olivia_beavers) and Maggie Miller (@magmill95), and the tech team, Harper Neidig (@hneidig) and Emily Birnbaum (@birnbaum_e).

MORE MONEY PLZ: The Federal Trade Commission (FTC) urged Congress on Wednesday to pass data privacy legislation and beef up the agency’s authority to police large tech companies.

At a hearing before the House Energy and Commerce subcommittee on consumer protection, the five commissioners stressed that gaps in the FTC’s oversight and a lack of resources puts the agency at a disadvantage when going after privacy violations in Silicon Valley.

“These limitations have a critical effect on our ability to protect consumers,” said FTC Chairman Joseph Simons.{mosads}

What they want: The FTC commissioners asked Congress to update the agency’s statutory authority to give it the power to make rules and to assess fines against companies that break the law. In most cases, the agency currently only has the power to fine repeat offenders, and even then can only level those fines if the company agrees to a settlement or if the FTC wins in court.

House getting to work: There have been growing bipartisan calls over the past year for Congress to pass the nation’s first comprehensive consumer privacy law. A bipartisan Senate working group has been trying to hammer out a draft compromise bill since last summer, but so far lawmakers have produced little in public.

On Wednesday, members of the House subcommittee said that they would work on their own legislation.

“Energy and Commerce Democrats feel like we have an obligation to provide a solid piece of legislation that protects consumer privacy,” said Rep. Jan Schakowsky (D-Ill.), who chairs the subcommittee.

“We’ve begun conversations now with the Republicans as well,” she continued. “I am very hopeful that the legislation would be bipartisan and I am looking forward to working with all of you on the Federal Trade Commission in designing this legislation.”

“I believe it is important that we work together toward a bipartisan federal privacy bill,” added Rep. Greg Walden (Ore.), the top Republican on the full Energy and Commerce Committee. “And we are ready and willing to tackle crafting such a bill.”

WANNA BE LIKE YOU: Individuals and groups in the U.S. are taking a page out of Russia’s 2016 playbook, as both right-wing and liberal trolls engage in disinformation campaigns designed to undermine 2020 presidential candidates.

The increased efforts to spread conspiracy theories and misleading content, as well as sowing discord over topics that already divide voters, are raising alarm among analysts and lawmakers, who are considering how best to address the issue.

But taking congressional action of any kind would require a delicate balancing act, as lawmakers worry about running afoul of the First Amendment.

Experts say they have noticed a spike in disinformation as each Democratic hopeful has entered the 2020 race, with significant increases after former Vice President Joe Biden, Sen. Elizabeth Warren (D-Mass.) and Sen. Bernie Sanders (I-Vt.) announced their candidacies.

“I think it’s almost certain that as we get closer to the 2020 election, you’ll see an intensification of this kind of activity,” Paul Barrett, deputy director of New York University’s Center for Business and Human Rights, told The Hill.

The similarities: The escalating disinformation campaigns bear striking resemblances to Russian campaigns, according to analysts. Though much of the activity in the U.S. appears to be coming from individuals rather than coordinated groups, the barrage of inflammatory posts, memes and misleading articles from fringe sites shared across social media is targeting the most sensitive issues at play in 2020, much like they did in 2016.

Who they’re targeting: Fringe right-wing sites and trolls have spread false information about Warren’s Native American heritage and amplified misinformation about allegations of inappropriate touching by Biden, according to Padraic Ryan, head of news intelligence at Storyful, a firm that tracks social media disinformation.

“Elizabeth Warren has been the target of a great many of smears and hoaxes and so on, many relating to her claim of Native American ancestry,” Ryan told The Hill, noting that trolls seeking to inflame tensions have also targeted Sanders.

What’s next: The next phase of disinformation for the 2020 campaign, experts say, will likely focus on voting registration and efforts to turn citizens away from the polls.

“That kind of deliberate effort to manipulate voters, send them in the wrong direction and so forth, is what could be most disturbing,” Barrett said.

Read more here.

BULLSEYE ON ZUCKERBERG: Pressure is growing for federal regulators to hold Facebook CEO Mark Zuckerberg personally accountable for his company’s string of privacy scandals.

The Federal Trade Commission (FTC) is wrapping up a long-running investigation into Facebook over its data practices and is expected to levy a multibillion-dollar fine. But a report from The New York Times said that a rift has opened at the agency over whether to also hold executives like Zuckerberg liable in any enforcement action.

Last month, Facebook told investors that it’s expecting to pay a fine as high as $5 billion to settle the FTC’s investigation into its privacy practices. That sort of sum would be the largest fine ever leveled against a tech company in the U.S. — more than 200 times the record $22.5 million penalty Google received in 2012 for allegedly deceiving users about its privacy practices.

Still, the fine itself would be minuscule for a behemoth like Facebook, which last year made $55 billion in revenue. Investors largely shrugged off the expected fine, sending Facebook’s stock up 10 percent the day after the announcement.

Facebook’s critics say that the fine would amount to a slap on the wrist and that in order to hold the company accountable after a string of privacy incidents, the FTC needs to impose restrictions on its handling of user data and make executives individually liable.

That approach also has supporters in both parties.

“As important as remedies on Facebook as a company are, the FTC should impose tough accountability measures and penalties for individual executives and management responsible for violations of the consent order and for privacy failures,” Sens. Richard Blumenthal (D-Conn.) and Josh Hawley (R-Mo.) wrote in a letter to the FTC on Monday.

Carl Szabo, the vice president of the trade group NetChoice, which represents Facebook, said that such a move would be extreme and that “anti-tech activists” will not be satisfied no matter how far the FTC goes.

“I think the multibillion-dollar fine that we’ve been hearing about for some time is more than appropriate,” Szabo told The Hill. “Holding business leadership liable risks undermining innovation and leaves America open to foreign technological dominance.”

More on Zuckerberg in the bull’s-eye here.

REGULATING FORTNITE?: Sen. Josh Hawley (R-Mo.) on Wednesday announced that he will introduce legislation banning “manipulative” online game features he says can push children to become addicted to technology.

Hawley’s Protecting Children from Abusive Games Act would prohibit games geared toward children from implementing features that prompt users to pay real-world money to advance in the game, called “pay-to-win,” or receive rewards at random for a fee, called “loot boxes.”

The Federal Trade Commission (FTC) would be tasked with enforcing the ban, and state attorneys general would also be empowered to file lawsuits against companies who violated the rules.

“Social media and video games prey on user addiction, siphoning our kids’ attention from the real world and extracting profits from fostering compulsive habits,” Hawley, a former GOP attorney general and one of the most outspoken tech critics in his party, said in a statement.

“No matter this business model’s advantages to the tech industry, one thing is clear: there is no excuse for exploiting children through such practices,” he added.

The bill would specifically target games geared towards children, as determined by their “subject matter, visual content, and other indicators.”

The senator is expected to introduce the bill sometime in the next few days.

Industry pushes back: The Entertainment Software Association on Wednesday put out a statement rejecting Hawley’s proposal. The acting president and CEO of the video game industry trade group, Stanley Pierre-Louis, pointed out that “numerous countries, including Ireland, Germany, Sweden, Denmark, Australia, New Zealand, and the United Kingdom, determined that loot boxes do not constitute gambling.”

Read more here.

LAWMAKERS SUPPORT UBER STRIKE: Lawmakers, including multiple 2020 candidates, on Wednesday threw their weight behind the Wednesday strike from Uber and Lyft Drivers.

Rep. Alexandria Ocasio-Cortez (D-N.Y.): The New York progressive tweeted support for the strike to her more than 4 million followers, writing, “Your Direct Action for today: Don’t take an Uber or Lyft just for the day. (Just today! Cabs are fine! You can do it!)”

Sen. Bernie Sanders (I-Vt.): “I stand with striking Uber and Lyft drivers today. The greed has got to end,” Sanders tweeted, noting that Uber paid its top five executives a total of $143 million in compensation, including $45 million to its CEO last year.”

Sen. Kamala Harris (D-Calif.): “All workers deserve a living wage, protections, benefits, and the right to join a union. Standing with the thousands of Uber and Lyft drivers across the country striking today.”

Drivers from big ride-hailing firms such as Lyft and Uber, as well as smaller companies like Juno, are striking on Wednesday over what they say are unfair working conditions and a lack of transparency from their employers over how much they’re paid.

The drivers are calling for better wages, more benefits and clarity about how apps calculate their wages.

Drivers in 10 cities across the country are participating in the strike by turning off the app and encouraging riders to use public transportation instead.

Those participating in the strike on Wednesday are appealing directly to legislators across the country, including at the federal level, asking them to extend fair labor protections to gig economy workers.

Read more here.

NEW PUSH ON AD TRANSPARENCY: A bipartisan group of three senators reintroduced legislation on Wednesday aimed at increasing the transparency of election advertisements on social media platforms, with the goal of preventing foreign actors from influencing U.S. elections.

Sens. Amy Klobuchar (D-Minn.), Mark Warner (D-Va.), and Lindsey Graham (R-S.C.) introduced the Honest Ads Act, which would require online platforms to make “all reasonable efforts” to ensure that foreign entities are not buying political ads.

It would also require all digital platforms with at least 50 million monthly viewers to maintain a public file of all election-related communication purchased by an entity or group that spends over $500 on their platform.

The public file would need to include the contact information of the purchaser, a description of the targeted audience, the rates charged and the dates and times the ads were published.

The bill would also expand the Bipartisan Campaign Reform Act’s definition of “electioneering communication” to include paid internet and digital advertisements.

Read more here.

FBI WEIGHS IN ON EXTREMIST CONTENT: A top FBI counterterrorism official said Wednesday that he has seen a major change in social media companies’ willingness to address extremist content on their platforms.

“We are seeing a tide change in social media companies being more proactive policing their own,” Michael McGarrity, the FBI’s assistant director for counterterrorism, said at a House Homeland Security Committee hearing.

“And when they see something that is noteworthy and alarming beyond First Amendment, they will give us leads,” McGarrity added.

The FBI official asserted that social media companies were not “self-identifying content” to the same degree a few years ago, and they are currently facing a “learning curve” in how best to handle it.

His remarks came as the House panel, which has been led by Democrats since January, held its first hearing on domestic terrorism in years. The hearing focused heavily on the role of social media companies in dealing with incendiary and hateful content, with lawmakers signaling a desire to hold the companies “accountable” when they do not address domestic terrorists on their platforms.

McGarrity testified alongside Brian Murphy, the Department of Homeland Security’s (DHS) principal deputy undersecretary for intelligence and analysis, and Brad Wiegmann, the deputy assistant attorney general of the Department of Justice’s (DOJ) national security division.

Each of the witnesses emphasized that government’s limited power to address content from Americans, even when it is extreme or hateful. They said that tech companies have more room to deal with the issue because social media giants like Facebook and Twitter are not held to the First Amendment and police their platforms according to community guidelines.

“When you’re talking about extremist content online, the First Amendment does impose some significant constraints,” Wiegmann from the DOJ told the committee.

“We are prohibited from reviewing, looking at First Amendment activity,” McGarrity added.

But the government can partner with social media companies such as Facebook, Twitter and Google in a limited capacity, the witnesses told lawmakers.

A LIGHTER CLICK: Aye aye, Captain!

NOTABLE LINKS FROM AROUND THE WEB:

Google’s Sundar Pichai: Privacy should not be a luxury good. (The New York Times)

Google’s new privacy features put the responsibility on users. (Wired)

Sen. Ron Wyden demands answers from DHS and private intel firm over spying on anti-trump immigration protests. (The Intercept)

UK says 5G roll out could be delayed by security concerns. (Reuters)