Overnight Tech: Justices wrestle with case on overseas data | Dems unveil bills to save net neutrality | House passes controversial online sex trafficking bill

JUSTICES HEAR MICROSOFT CASE ON OVERSEAS DATA: The Supreme Court wrestled Tuesday with whether the government can search and seize the contents of emails that technology companies store overseas in a potentially landmark battle over information stored in the cloud.

The case stems from Microsoft Corp.’s refusal to comply with a federal warrant for the emails of a customer that the government accuses of drug trafficking.

Although the warrant was served on Microsoft’s headquarters in Redmond, Wash., the company said the warrant was invalid because the emails are stored in Dublin, Ireland, not the U.S.

Justice Sonia Sotomayor asked why the justices shouldn’t just wait for Congress to resolve the issue, given the bipartisan bill that Sen. Orrin Hatch (R-Utah) has offered to make it easier for U.S. officials to create bilateral data sharing agreements and gain access to data stored overseas.

She said the court is encroaching on the very thing its jurisprudence seeks to avoid, which is create an international problem.

The case could hinge on the court’s interpretation of the Stored Communications Act (SCA), which Congress passed in 1986 to protect the privacy of digital communications. Lawmakers carved out an exception to allow law enforcement to obtain a warrant for the content of stored communications.

Microsoft argues that lawmakers deliberately used the term warrant in the law, which has territorial limits. Congress never intended to give law enforcement the power to search and seize communications stored overseas, the company says.

The government rejects that argument, saying the law is focused on who is disclosing the information, not where it is being stored.

“And we think the court should leave things as they are with the instrument that Congress authorized, operating on a person, and requiring that person to produce information regardless of whether it’s stored overseas,” Deputy Solicitor General Michael Dreeben said.

Read more here.

 

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DEMS OFFER NET NEUTRALITY BILLS: Democratic lawmakers on Tuesday introduced legislation in both chambers of Congress to reverse the Federal Communications Commission’s (FCC) repeal of net neutrality rules.

The Senate legislation has the support of 50 lawmakers, including one Republican, Sen. Susan Collins (Maine), meaning it is just one vote shy of the necessary number to pass in the upper chamber under rules that prevent a filibuster.

But even if Democrats get support from one more GOP senator, a resolution to preserve the Obama-era net neutrality rules faces a steep uphill battle in the House.

Rep. Mike Doyle (Pa.), the top Democrat on the House Energy and Commerce Subcommittee on Communications and Technology, said his net neutrality legislation has the backing of 150 lawmakers in the House. Still, if Democrats won over a majority in the House, President Trump is not expected to sign such a bill.

The clock is also ticking on the timeline for a net neutrality resolution. Democrats have a 60-day window to use the Congressional Review Act (CRA) to scrap with a simple majority the FCC’s order to end net neutrality rules, which started last week after the order was officially published in the Federal Register.

Even if they can’t save the rules, Dems want to put Republicans on the record with a vote.

Read more here.

 

HOUSE PASSES ONLINE SEX TRAFFICKING BILL: The House on Tuesday passed an online sex trafficking bill in a broad, bipartisan vote that many in the tech industry worry could undermine legal protections afforded to internet platforms.

The Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA), introduced by Rep. Ann Wagner (R-Mo.), was approved in a 388-25 vote, earning majorities in both parties. It will make it easier for websites to be targeted with legal action for enabling sex trafficking.

But the legislation has also worried internet companies and advocacy groups over what it might mean for free speech online. The bill would cut into the legal immunity that internet platforms enjoy under Section 230 of the Communications Decency Act, which shields websites from legal liability for content posted by third-parties.

If it becomes law, the sex trafficking legislation would be the first major policy blow in the growing movement among lawmakers to challenge tech giants.

Read more here.

 

PAYPAL, FTC REACH SETTLEMENT OVER VENMO DECEPTION CHARGES: PayPal reached a settlement with the Federal Trade Commission (FTC) on Tuesday over charges that its subsidiary Venmo had deceived customers about access to funds, privacy settings and data security.

The FTC had alleged that Venmo was misleading consumers by telling them that their balances on the service were available for transfer to external bank accounts but neglecting to inform them that the transfers could be delayed or negated after being reviewed by the company.

“Consumers suffered real harm when Venmo did not live up to the promises it made to users about the availability of their money,” Maureen Ohlhausen, acting chairman of the FTC, said in a statement. “The payment service also misled consumers about how to keep their transaction information private. This case sends a strong message that financial institutions like Venmo need to focus on privacy and security from day one.”

Read more here.

 

WHITE HOUSE ISSUES GUIDANCE ON IT MODERNIZATION: The White House on Tuesday issued formal guidance to federal agencies on implementing part of its push to modernize information technology across the federal government.

The guidance released by the Office of Management and Budget (OMB) walks agency and department heads through the implementation of the Modernizing Government Technology (MGT) Act, which authorizes two different funding streams to help agencies replace legacy IT systems with newer, more efficient and more secure technology.

“The MGT Act will allow agencies to invest in modern technology solutions to improve service delivery to the public, secure sensitive systems and data, and save taxpayer dollars,” OMB Director Mick Mulvaney wrote in a memo to leaders of executive branch agencies and departments on Tuesday.

Read more here.

 

CONSERVATIVE GROUPS URGE CONGRESS TO OPPOSE ONLINE SALES TAX: A group of right-leaning organizations are urging members of Congress to reject bipartisan legislation that would require out-of-state online retailers to collect sales taxes.

The groups — including the National Taxpayers Union, Americans for Tax Reform and Heritage Action for America — are speaking out against a House bill called the Remote Transactions Parity Act, as well as similar measures.

“Congress should oppose this unwise legislation and instead work to preserve federalism, strengthen geographical limits to tax authority, and encourage tax competition,” the groups wrote.

Read more here.

 

COMCAST MAKES $31 BILLION BID FOR SKY: Comcast is offering a $31 billion bid to purchase the European broadcaster Sky, hoping to beat out Disney and 21st Century Fox.

The cable company on Tuesday announced the offer, which is a 16 percent increase from Fox’s bid to obtain majority control of Sky.

“We think Sky is an outstanding company,” Comcast CEO Brian Roberts said in a statement. “It has 23 million customers and leading positions in the U.K., Italy, and Germany. Sky has been a consistent innovator in its use of technology to deliver a fantastic viewing experience and has a proud record of investment in news and programming.”

Read more here.

 

ON TAP:

The Senate Commerce Committee will hold a hearing to vote on FTC nominees at 10:00 a.m.

The FCC Incentive Auction Task Force and Media Bureau will hold a webinar on the Channel Study at 1:00 p.m. It’s intended to “assist low-power television, TV translator stations, and analog-to-digital replacement translators identify potential new

channels in … repacked television bands.”

 

IN CASE YOU MISSED IT:

The Guardian: ‘Right to be forgotten’ claimant wants to rewrite history, says Google

The Wall Street Journal: The next big threat to consumer brands (Yes, Amazon’s behind it)

Geekwire: Amazon to acquire Ring video doorbell maker, cracking open the door in home security market

Recode: Pinterest has hired former Google and Square executive Francoise Brougher as its first COO

Stratechery: The Dropbox Comp

Op-ed: FCC must act to avoid a grave threat to GPS