Hillicon Valley: News industry cheers scrutiny on Big Tech | Border Patrol says traveler photos stolen in data breach | Democratic FCC commish pushes industry on blocking robocalls | Justices to hear Comcast discrimination case

Hillicon Valley: News industry cheers scrutiny on Big Tech | Border Patrol says traveler photos stolen in data breach | Democratic FCC commish pushes industry on blocking robocalls | Justices to hear Comcast discrimination case
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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).

 

A DIFFERENT KIND OF MEDIA PILE-ON: The struggling news industry is joining calls to increase oversight of tech giants like Facebook and Google, urging policymakers to also take into account how Silicon Valley has upended the business of journalism.

The House Judiciary Committee's antitrust investigation into tech giants will hold a hearing on Tuesday to hear from industry leaders and advocates who believe that Silicon Valley is responsible for the decline in local newspapers and has threatened the business models relied on by many outlets.

Lawmakers in both parties have steadily turned against the tech giants, fueling a growing movement to scrutinize their market power and their collection of user data.

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"I think the media industry itself is one of the sectors that's being most harmed by the way that the major tech platforms that have been operating," said Jason Kint, the CEO of Digital Content Next, a trade group representing online media outlets. "News is the category of media that's been of most concern, particularly local news."

Tuesday's hearing: The focus at Tuesday's hearing will likely be on a bipartisan bill introduced in both the House and Senate that would give news publishers an exemption from antitrust law so they can band together and negotiate collectively with Facebook and Google for more advertising revenue.

Among those testifying at the hearing will be representatives from the News Media Alliance and Rupert Murdoch's News Corp, as well as Kevin Riley, the editor-in-chief of the Atlanta Journal-Constitution.

According to the Pew Research Center, newspaper advertising revenue has plummeted since the mid-2000s when U.S. papers brought in more than $49 billion from advertising. Pew estimated that number was down to $16.5 billion in 2017.

Over the same period, revenue from newspaper circulation rose slightly from $10.5 billion to $11.2 billion.

The collapse in advertising revenue for publishers has coincided with readers shifting their attention online, giving internet companies like Google and Facebook troves of user data that's used to target advertisements to tailored audiences.

Google declined to comment for this article. A spokeswoman for Facebook did not respond when asked for comment.

The digital ad landscape: According to eMarketer, Google and Facebook combined for nearly 66 percent of all revenue from internet ads in the U.S. in 2018, with news outlets left to fight for the shrinking remainder left by other tech giants like Amazon, Twitter, Yelp and Snapchat.

Kint says that the mass amounts of personal data collected by large tech platforms makes news outlets less attractive for advertisers.

"The ability for the tech companies to target audiences using data that's collected across publishers' websites is the core issue here," he said. "Their audience targeting has become more valuable than context, what the consumers actually expect and want, copyright and even facts themselves."

Even with the increased attention on data collection and antitrust, some tech critics believe that the effect on journalism is getting left out of the spotlight.

Journalists weigh in: "We're definitely at a bit of a disadvantage in the sense that not a lot of people have thought about it," said John Stanton, who spent more than 20 years as a journalist in Washington before being laid off from his position as BuzzFeed's bureau chief in the capital earlier this year.

Stanton and Laura Bassett, a journalist who was similarly laid off from HuffPost after working there for nine years, are trying to change that.

Last week, the two of them teamed up to launch the Save Journalism Project to highlight what they see as the threat to their industry from Facebook and Google's hold on the advertising market.

According to the project's website, 2,400 journalists have lost their jobs so far this year and 32,000 newsroom employees have been laid off in the past decade. Pew found that since its peak in 2006, the number of newsroom employees has declined from 74,000 to 39,000.

Read more on the news industry's dilemma here.

 

CBP PHOTO DATABASE BREACHED: Customs and Border Protection (CBP) on Monday confirmed that photos of U.S. travelers and license plate images were recently stolen from a photo database maintained by the border agency.

In a statement to The Hill, a CBP spokesperson confirmed that it learned on May 21 that a "subcontractor ... had transferred copies of license plate images and traveler images collected by CBP to the subcontractor's company network."

"The subcontractor's network was subsequently compromised by a malicious cyber-attack," the spokesperson said.

The spokesperson noted that the subcontractor had transferred the photos to its own network "in violation of CBP policies and without CBP's authorization or knowledge." The federal law enforcement agency maintains an expansive database that includes photos of people traveling into and out of the country. CBP, which is a part of the Department of Homeland Security (DHS), has not named the subcontractor involved in the data breach.

"As of today, none of the image data has been identified on the Dark Web or internet," the border agency said in a statement. "CBP has alerted Members of Congress and is working closely with other law enforcement agencies and cybersecurity entities, and its own Office of Professional Responsibility to actively investigate the incident."

It is unclear what photos were taken, and if they are related to the database of visa and passport photos the CBP maintains in order to assist with its facial recognition technology program expanding to airports across the U.S.

Read more here.

 

FREE OF CHARGE: A Democrat on the Federal Communications Commission (FCC) is pushing phone companies to provide robocall blocking at no extra cost to their customers following the agency's decision to make it legal for the industry to filter out suspicious calls by default.

FCC Commissioner Geoffrey Starks wrote to every major phone carrier on Monday, including AT&T, asking for details on how they intend to implement call filtering technology.

"Carriers made clear to the Commission: they want to offer call blocking services to consumers by default," Starks said in a statement. "My colleagues and I made clear to carriers: they should not charge consumers for these services. The Commission has acted. Now it is industry's turn to put these new tools to work for consumers. I'm looking forward to learning the details of their plans to do so."

The FCC voted last week to clarify its regulations and allow phone companies to block suspicious calls in an effort to crack down on illegal robocalls and scammers.

The proposal passed unanimously but some criticized the agency for not going further by requiring the industry to offer such services for free.

"I think robocall solutions should be free to consumers. Full stop," Democratic Commissioner Jessica Rosenworcel said last week. "I do not think that this agency should pat itself on the back for its efforts to reduce robocalls and then tell consumers to pay up."

FCC Chairman Ajit Pai, a Republican, has said that the proposal would save money for companies like Verizon and AT&T and that those savings could be passed on to consumers.

In his letters sent Monday, Starks asked for details on whether each company's call blocking service would be free, when they plan to roll them out and how they will notify customers of changes. Starks gave the industry until July 10 to respond.

Read more here.

 

HAPPY ANNIVERSARY, MITCH: A coalition of more than 100 activist groups is urging Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellGOP nervous that border wall fight could prompt year-end shutdown GOP nervous that border wall fight could prompt year-end shutdown Jon Stewart slams McConnell over 9/11 victim fund MORE to take up a bill to restore net neutrality in the upper chamber after the House voted overwhelmingly for the legislation earlier this year.

The 103 public interest groups in a letter are urging McConnell to immediately bring the Save the Internet Act, which would reinstate Obama-era net neutrality rules, to a vote in the Senate.

But a McConnell spokesperson in response directed The Hill to remarks from the majority leader earlier this year, in which he called the Save the Internet Act "dead on arrival in the Senate."

The groups are planning to deliver the letter to McConnell on Tuesday morning, on the one-year anniversary of the Federal Communications Commissions (FCC)'s repeal of net neutrality rules.

"Senator McConnell, we call on you to enact the will of hundreds of millions of people who support open internet protections and broadband competition, and the millions who have taken action demanding them, by allowing Senators to vote on the Save the Internet Act," the groups wrote.

Various net neutrality advocates are also planning to deliver a collection of over 3 million pro-net neutrality public comments and petition signatures to McConnell's office on Tuesday. They will hold a day-long campaign urging supporters to email and call their senators about the issue.

In the letter, the groups pointed to recent polling reported by The Hill that shows 4 in 5 Americans say they support net neutrality.

Read more here.

 

SUPREME COURT TAKES UP COMCAST CASE: The Supreme Court on Monday said it would hear a case alleging that Comcast discriminated against an African American owned media company in declining to take up its channels.

The justices said in an unsigned order that the court will consider whether the network needs to prove that Comcast intended to act in a discriminatory way in the case.

Byron Allen, the owner of the Entertainment Studios Networks (ESN), alleged that Comcast violated the Civil Rights Act of 1866 in rejecting to carry his channels.

His network initially lost its case in district court, but that ruling was overturned by the 9th Circuit Court of Appeals. The judges wrote in that decision that "[e]ven if racial animus was not the but-for cause of a defendant's refusal to contract, a plaintiff can still prevail if he demonstrates that discriminatory intent was a factor in that decision."

Comcast had asked the Supreme Court to take up the case, alleging that ESN's claims are "based on an outlandish racist conspiracy between Comcast, the NAACP, and other civil-rights groups and leaders to disadvantage wholly African American-owned networks."

ESN has pushed back against that argument, claiming that its channels were repeatedly passed over in favor of white-owned networks despite Comcast saying the channels were "good enough" and on the "short list" to be picked up.

Read more here.

 

OMB OMG: President TrumpDonald John TrumpTrump cites tax cuts over judges as having biggest impact of his presidency Trump cites tax cuts over judges as having biggest impact of his presidency Ocasio-Cortez claps back at Trump after he cites her in tweet rejecting impeachment MORE's acting budget chief is calling for a two-year delay of a ban that restricts the U.S. government from doing business with Chinese tech firm Huawei.

Acting director of the Office of Management and Budget Russ Vought sent a letter to Vice President Pence and nine members of Congress, urging them to hold off on implementing portions of a law that would effectively ban the tech giant from doing business with U.S. government agencies. He said the delay would give American companies more time to comply with the ban "without compromising desired security objectives."

The letter, dated June 4, was first reported by The Wall Street Journal on Sunday. Vought is asking for a delay in implementing portions of the National Defense Authorization Act, which Trump signed last year. The legislation targets Huawei and other Chinese tech companies over national security concerns.

"While the Administration recognizes the importance of these prohibitions to national security, a number of agencies have heard significant concerns from a wide range of potentially impacted stakeholders who would be affected" by the rules as written, Vought wrote.

A spokesman for the Office of Management and Budget (OMB) told The Hill that the letter does not represent a change in U.S. policy.

"There is not a change to administration policy with regard to Huawei and would not delay the ban taking effect this year on the federal government doing business with them," OMB spokesman Jacob Wood said.

"It also would not stop or delay the restrictions Commerce announced on the sale of U.S. technology to Huawei," Wood added. "This is about ensuring that companies who do business with the U.S. government or receive federal grants and loans have time to extricate themselves from doing business with Huawei and other Chinese tech companies listed in the NDAA."

The Hill has reached out to Huawei for comment. A company spokesman told the Journal that the company is "aware of the discussions and carefully watching the situation."

Read more on the proposed delay here.

 

TRUMP ON ANTITRUST: President Trump on Monday accused technology companies like Facebook and Google of discriminating against him, adding that there's "something going on in terms of monopoly."

The president phoned into CNBC's "Squawk Box" when he was asked about large tech companies and whether they could be subjected to antitrust laws.

The president cited the European Union's multibillion-dollar fines against U.S. tech companies and suggested the continental bloc is using the tactic to make financial gains, but that the U.S. should be taking a more vigorous stance on antitrust enforcement when it comes to Silicon Valley.

"They're our companies, so they're actually attacking our companies," Trump said. "But we should be doing what they're doing."

Trump stopped short of committing to what his administration would consider doing to crack down on a monopoly.

"I can tell you they discriminate against me," Trump said when asked about companies like Google, Facebook and Amazon. "People talk about collusion. The real collusion is between the Democrats and these companies because they were so against me during my election run."

Trump has frequently alleged that he and other conservatives are the victims of bias on tech and social media platforms like Twitter, Facebook and Google. The companies have been adamant that political leanings play no role in the enforcement of their policies.

CNBC co-host Joe Kernen asked Trump whether, setting his personal grievances aside, he believes there should be an update to monopoly laws to address tech companies. The president acknowledged there's "something going on," and pointed to the European Union's use of litigation against those corporations.

"Every week you see them going after Facebook, and Apple, and all of these companies that are, you know, great companies," Trump said. "But I will say that the European Union is suing them all the time."

"They think there's a monopoly but I'm not sure that they think that, they just figure this is easy money," Trump added. "We'll sue Apple for $7 billion and we'll make a settlement or win the case. So I think it is a bad situation but obviously there is something going on in terms of monopoly."

The president was noncommittal about whether the U.S. would take a similar approach, telling CNBC "we're going to look at it differently."

Read more on the interview here.

 

AN OP-ED TO CHEW ON: Four ways to reduce the threat of small drones.

 

A LIGHTER CLICK: The only celebrity news that matters today.

 

NOTABLE LINKS FROM AROUND THE WEB:

Anger at big tech unites noodle pullers and code writers. Washington is all ears. (The New York Times)

Don't smile for surveillance: Why airport face scans are a privacy trap. (The Washington Post)

Exclusive interview: Google CEO defends YouTube practices. (Axios)

Raytheon, United Technologies merger will create a new aerospace giant. (NPR)