Hillicon Valley: Facebook tries to ease concerns over cryptocurrency | Democrats ask company to halt plans | Instagram photos hit by glitch | Court rules Amazon liable for third-party sales | UK to study internet giants' market power

Hillicon Valley: Facebook tries to ease concerns over cryptocurrency | Democrats ask company to halt plans | Instagram photos hit by glitch | Court rules Amazon liable for third-party sales | UK to study internet giants' market power
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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).

 

THAT SHOULD PUT EVERYONE AT EASE: David Marcus, the head of Facebook's cryptocurrency project Libra, in a blog post on Wednesday vowed to work closely with regulators, lawmakers and banks as the company seeks to unveil its controversial digital currency.

Marcus, who is set to testify before the Senate Banking and House Financial Services committees over the next few weeks, wrote that he hopes to "provide answers and add clarity" amid a storm of sharp criticism and raised eyebrows from lawmakers on Capitol Hill.

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"We believe in and are committed to a collaborative process with regulators, central banks, and lawmakers to ensure that Libra helps with the kinds of issues that the existing financial system has been fighting, notably around money laundering, terrorism financing, and more," Marcus wrote.

His blog post, which addresses some of the top questions Marcus has fielded since Facebook unveiled Libra two weeks ago, comes the day after top Democrats on the House Financial Services Committee called for a temporary pause on the project.

Lawmakers have raised concerns over Facebook, an embattled company with more than 2.3 billion users worldwide, launching its own currency. House Financial Services Committee Chairwoman Maxine WatersMaxine Moore WatersBipartisan housing finance reform on the road less taken Manufacturing group leads coalition to urge Congress to reauthorize Ex-Im Bank Democrats' impeachment message leads to plenty of head-scratching MORE (D-Calif.) in a statement slammed Facebook's repeated privacy breaches, alleged violation of consumer protection laws and a string of other controversies involving user data.

Sen. Sherrod BrownSherrod Campbell BrownBipartisan housing finance reform on the road less taken Hillicon Valley: Google to promote original reporting | Senators demand answers from Amazon on worker treatment | Lawmakers weigh response to ransomware attacks Senate Democrats want answers on 'dangerous' Amazon delivery system MORE (Ohio), the ranking Democrat on the Senate Banking Committee, said, "Facebook is already too big and too powerful, and it has used that power to exploit users' data without protecting their privacy."

Facebook is already facing scrutiny on Capitol Hill over its market power and mishandling of user data.

Read more here.

 

...OK, MAYBE NOT: A group of Democrats on the House Financial Services Committee is calling on Facebook to halt its plan to develop a cryptocurrency-based payments platform.

The lawmakers, whose panel will hold a hearing later this month on Facebook's Project Libra, wrote a letter to company executives Tuesday expressing concerns with the cryptocurrency's security and oversight while stressing the need to protect users' privacy and thwart hackers.

"If products and services like these are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger U.S. and global financial stability. These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have been in the past," the lawmakers wrote.

"Investors and consumers transacting in Libra may be exposed to serious privacy and national security concerns, cyber security risks, and trading risks. Those using Facebook's digital wallet -- storing potentially trillions of dollars without depository insurance -- also may become unique targets for hackers," they continued.

Read more here.

 

MORE GOOD NEWS FOR SILICON VALLEY: The British government is launching a study of internet giants' dominance in areas like digital advertising, a move that could potentially lead to tougher restrictions for companies like Facebook and Google.

The UK Competition and Markets Authority (CMA) said on Wednesday that the probe is aimed at shedding light on opaque internet business models.

"Much about these fast-changing markets is a closed book to most people," CMA Chairman Andrew Tyrie said in a statement. "The work we do will open them up to greater scrutiny, and should give Parliament and the public a better grip on what global online platforms are doing."

The study will focus on three areas: competition between internet platforms, how they collect and use data from consumers and competition for digital ad revenue.

The regulator also invited public comment on the issues to be submitted by July 30.

The move comes as other European countries and the EU are scrutinizing internet giants over their market dominance and handling of user data.

Read more here.

 

THEY'RE YOUR PROBLEM NOW: A federal appeals court on Wednesday ruled online retail giant Amazon can be held liable for the products sold by third-party sellers on its platform.

The 3rd U.S. Circuit Court of Appeals ruled 2-1 that customers can sue Amazon when they buy defective products from its platform, even if Amazon did not make those products.

The decision could leave Amazon vulnerable to a slew of lawsuits.

The case before the appeals court, though, involved a plaintiff who was in Pennsylvania, and the appeals court carefully noted that it was finding Amazon liable under that state's strict product liability laws.

Amazon has argued that it does not count as a "seller" because it merely provides the platform, but the appeals court on Wednesday said it disagrees.

"Amazon ... plays a large role in the actual sales process," Circuit Judge Jane Richards Roth, a Reagan appointee, wrote in the opinion. "This includes receiving customer shipping information, processing customer payments, relaying funds and information to third-party vendors, and collecting the fees it charges for providing these services."

Read more here.

 

LIFE'S A GLITCH: Facebook, Instagram and WhatsApp, all owned by Facebook, were hit by a glitch on Wednesday that made it difficult for users to upload or view photos, with the cause of the problem not immediately clear.

Facebook tweeted that "we're aware that some people are having trouble uploading or sending images, videos and other files on our apps. We're sorry for the trouble and are working to get things back to normal as quickly as possible."

Instagram, which Facebook bought in 2012, tweeted a similar explanation: "We're aware that some people are having trouble uploading or sending images and videos on Instagram." It issued the same apology as Facebook.

Users of texting app WhatsApp, acquired by Facebook in 2014, also reported difficulty in uploading and viewing photos.

The photo problems for all three social platforms highlighted the centralization of major worldwide apps.

Read more here.

 

AN OP-ED TO CHEW ON: The national security risk no one is talking about.

 

A LIGHTER CLICK: It's not NOT worth watching. 

 

NOTABLE LINKS FROM AROUND THE WEB: 

TikTok under investigation over child data use. (The Guardian) 

After years of big spending, tech's political machine turns to high gear. (NBC News) 

U.S. judge blocks Qualcomm effort to put antitrust ruling on hold. (Reuters) 

Apple tops the list of tech stock holdings by key regulatory figures in Congress. (Morning Consult)