Hillicon Valley: Critics push FTC to get tough on YouTube | Analysts expect regulatory trouble for Facebook's cryptocurrency | Senators to get election security briefing | FBI, ICE reportedly using driver's license photos for facial recognition

Hillicon Valley: Critics push FTC to get tough on YouTube | Analysts expect regulatory trouble for Facebook's cryptocurrency | Senators to get election security briefing | FBI, ICE reportedly using driver's license photos for facial recognition
© Getty

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).


YOUTUBE UNDER THE MICROSCOPE: Consumer advocates are pushing for the Federal Trade Commission (FTC) to come down hard on YouTube's handling of children's privacy as regulators approach a potential settlement with the video-sharing site.

The Center for Digital Democracy (CDD) and the Campaign for a Commercial-Free Childhood (CCFC) released a letter on Monday they sent to the FTC last week, urging the commission to force YouTube to separate children's videos from the rest of the platform in order to crack down on illegal data collection on younger viewers.


Jeffrey Chester, CDD's executive director, told The Hill that he became "alarmed" when FTC commissioners asked about a potential remedy that would allow YouTube content creators to simply flag content on their platform that is directed at children in order to make sure advertisers comply with federal children's privacy laws.

That approach is not enough for critics of YouTube and its parent Google, who want the company to shoulder the responsibility for protecting children's privacy on the platform.

"It really did sound like they potentially would support a proposal that could take the responsibility ultimately away from Google and place that burden on programmers," Chester said.

"What I said was if the commission cannot enforce the one privacy law it has responsibility for it has no business [being] given even more power by Congress to protect the rest of us," he added, referring to the role the FTC would play in any potential privacy legislation that lawmakers draft. "If it can't protect children it should not be empowered by Congress to protect everyone else."

The issue was raised during a meeting with FTC Chairman Joseph Simons and Commissioner Noah Phillips, two of the three Republicans who make up a majority of the commission.

Bloomberg first reported on Monday that FTC commissioners had floated a potential settlement that would allow YouTube's content makers to disable ads on children's videos.

A spokeswoman for the FTC said that the agency had received the letter but declined to comment.

The big picture: YouTube's practices have received increased scrutiny from both sides of the aisle over whether the company is doing enough to protect children online from a wide array of threats, including exploitation. YouTube's massive scale and Google's pervasive ad networks have made it challenging for the company to navigate issues around children's videos and to comply with the children's privacy law. The company is not alone.

Read more here.


ANALYSTS SEE TROUBLE FOR LIBRA: Facebook may reap steady profits from its foray into cryptocurrency, but its ambitions may be curtailed by intense and costly scrutiny from bank and financial market lenders, according to a Fitch Rating analysis.

In a report released Monday, the credit rating agency said Facebook's Project Libra may emerge as a major money transfer platform, challenging legacy firms like Western Union, Moneygram and Transferwise.

Fitch said that while Libra will have limited impact on banks, it could supplant major money transfer firms and payment platforms if successful.

"Facebook's extensive network, big data access and technology could eventually help Libra challenge banks' dominance of payment mechanisms," wrote Fitch senior directors Monsur Hussain and David Prowse.

"But tight regulation and concerns about data privacy may constrain Facebook's ability to capitalise on these factors."

Set to launch next year, Libra would allow users to send and receive money through exchanging a proprietary cryptocurrency backed by dozens of major corporations, including Facebook.

While Libra will be controlled by a Swiss nonprofit separate from Facebook, the system will use a virtual wallet called Calibra that is operated by a Facebook subsidiary.

Facebook has insisted that it will play no role in controlling Libra, and it simply just one of its several major backers. But lawmakers and regulators have expressed deep skepticism of the project given Facebook's massive reach and series of data and privacy controversies.

Rep. Maxine WatersMaxine Moore WatersDivides over China, fossil fuels threaten House deal to reboot Ex-Im Bank Hillicon Valley: Lawmakers unleash on Zuckerberg | House passes third election interference bill | Online extremism legislation advances in House | Google claims quantum computing breakthrough On The Money: Lawmakers hammer Zuckerberg over Facebook controversies | GOP chair expects another funding stopgap | Senate rejects Dem measure on SALT deduction cap workarounds MORE (D-Calif.), chairwoman of the House Financial Services Committee, and a group of the panel's Democrats asked Facebook last week to suspend Libra until lawmakers and regulators vet the project. Rep. Patrick McHenryPatrick Timothy McHenryTrump roasts Republicans at private fundraising event North Carolina ruling could cost GOP House seats Divides over China, fossil fuels threaten House deal to reboot Ex-Im Bank MORE (R-N.C.) has also expressed concerns about Libra, but has not joined Democratic calls for a moratorium.

Read more here.


LAWMAKERS TO GET ELECTION SECURITY BRIEF: The Senate will get an election security briefing on Wednesday, as Democrats clamor for Congress to pass new legislation ahead of the 2020 election.

Senators will have a closed-door meeting with Trump administration officials, including briefers from the Department of Homeland Security, FBI and the Office of the Director of National Intelligence, according to a senior Senate aide.

The House is also expected to be briefed on Wednesday, with Speaker Nancy PelosiNancy PelosiGiuliani pens op-ed slamming 'unprecedented' impeachment inquiry Brindisi, Lamb recommended for Armed Services, Transportation Committees Overnight Health Care: Top health official defends contract payments to Trump allies | Vaping advocates confident Trump will turn from flavor ban | Sanders gets endorsement from nurses union MORE (D-Calif.) announcing late last month that the lower chamber would also have an "all members" briefing.

The back-to-back briefings come as Democrats have been pushing for months for Congress to pass new legislation ahead of the 2020 elections. They also follow former special counsel Robert MuellerRobert (Bob) Swan MuellerSpeier says impeachment inquiry shows 'very strong case of bribery' by Trump Gowdy: I '100 percent' still believe public congressional hearings are 'a circus' Comey: Mueller 'didn't succeed in his mission because there was inadequate transparency' MORE's report on Russia's interference in the 2016 election.

House Democrats passed a massive election and ethics reform bill earlier this year and have followed it up with smaller bills as they've tried to put pressure on the GOP-controlled Senate to take action.

Senate Democrats are hoping the election security briefing will move Republicans toward backing additional legislation and funding. In addition to requesting a briefing, Senate Minority Leader Charles SchumerCharles (Chuck) Ellis SchumerDivided Supreme Court leans toward allowing Trump to end DACA Ilhan Omar blasts Pete King as an 'Islamophobe' after he announces retirement: 'Good riddance' Top Senate Dem: Officials timed immigration policy around 2020 election MORE (D-N.Y.) backed putting election security in a mammoth defense bill, has called for stand-alone legislation and wants to put additional money for election security assistance in the upcoming appropriations bills.

Read more here.


LOOKING FOR ANSWERS: Sens. Amy KlobucharAmy Jean KlobucharGoogle sparks new privacy fears over health care data Krystal Ball credits Gabbard's upswing in 2020 race to 'feckless' Democratic establishment Outsider candidates outpoll insider candidates MORE (D-Minn.) and Jack ReedJohn (Jack) Francis ReedIt's time for Congress to establish a national mental health crisis number America's avengers deserve an advocate Democrats unifying against Joe Kennedy Senate bid MORE (D-R.I.) are demanding answers regarding voting equipment malfunctions in North Carolina during the 2016 presidential election, as election security continues to be a contentious topic on Capitol Hill.

Klobuchar and Reed sent a letter to Acting Homeland Security (DHS) Secretary Kevin McAleenan late last week asking him to explain the steps taken by DHS to investigate the "unexpected behavior" of voting equipment made by VR Systems during the 2016 election in Durham County, North Carolina.

On Election Day, electronic pollbooks in this county made by VR Systems malfunctioned, leading the county to switch to paper pollbooks. It is not clear if this was due to a cyber attack or a different cause.

The letter from the two Democratic senators was sent in the wake of the release of the report compiled by special counsel Robert Mueller, which concluded that Russian officers "targeted employees of [redacted], a voting technology company that developed software used by numerous U.S. counties to manage voter rolls, and installed malware on the company network."

VR Systems has since confirmed to the media that it was that company whose name was redacted in the Mueller report.

Read more here.


NOT EVEN AS A PLUS ONE: Facebook and Twitter were reportedly not invited by the White House to a social media summit being hosted by President TrumpDonald John TrumpTrump faces high stakes in meeting with Erdoğan amid impeachment drama Democrats worry they don't have right candidate to beat Trump Trump threatening to fire Mulvaney: report MORE.

CNN reports the two prominent social media companies were not extended invitations, according to sources familiar with the matter.

The summit, set for Thursday, is set to address issues relevant to social media today, all the more important as Trump utilizes the platforms like no other president before him.

The White House has not made public the various companies that will be attending Thursday's event.

Trump has frequently gone after Twitter and Google for what he alleges, without evidence, is the censoring of conservative voices on the platforms.

He previously met with Twitter CEO Jack Dorsey and Google CEO Sundar Pichai to address his grievances with their companies.

Trump reportedly questioned Dorsey specifically on why he was losing followers on Twitter, to which Dorsey explained it was likely bots who were removed from the platform causing Trump's loss of followers.

Read more here.


SEEMS FINE: The FBI and Immigration and Customs Enforcement (ICE) have reportedly been using driver's license photos for facial recognition searches without license holders' knowledge or consent.

The Washington Post reports the two agencies have used millions of Americans' photos, largely from driver's licenses, for the purpose of facial recognition searches, citing internal documents and emails from the two agencies that were obtained by Georgetown Law researchers over the past five years and shared with the news outlet.

The photos give the agencies a new layer of information on Americans and a new tool to potentially track both criminals and those who have never committed a crime, according to the Post, which adds that Congress has not authorized any such development of a facial recognition system.

Lawmakers from both sides of the aisle expressed their dismay over reports that the federal agencies were using driver's license photos.

"Law enforcement's access of state databases," particularly DMV databases, is "often done in the shadows with no consent," House Oversight and Reform Committee Chairman Elijah CummingsElijah Eugene CummingsBrindisi, Lamb recommended for Armed Services, Transportation Committees Maya Rockeymoore Cummings, Elijah Cummings's widow, will run for his House seat Former NAACP president to run for Cummings's House seat MORE (D-Md.) told the Post in a statement.

Last month at a hearing regarding facial recognition technology, Rep. Jim JordanJames (Jim) Daniel JordanJim Jordan: Latest allegation of ignoring sexual misconduct is 'ridiculous' Democrats face make-or-break moment on impeachment Here are the key players to watch at impeachment hearing MORE (R-Ohio), the ranking Republican on the House Oversight and Reform Committee, said Americans have not given consent to use their photos for facial recognition searches.

Read more here.


NEW CYBER BILL TO PROTECT SMALL BIZ: Sens. Gary PetersGary Charles PetersAdvocates step up efforts for horse racing reform bill after more deaths Warren doubles down — to Democrats' chagrin, and Trump's delight Senators urge Trump to fill vacancies at DHS MORE (D-Mich.) and Marco RubioMarco Antonio RubioGOP senators plan to tune out impeachment week Republicans warn election results are 'wake-up call' for Trump Paul's demand to out whistleblower rankles GOP colleagues MORE (R-Fla.) introduced legislation Monday designed to protect small businesses from cyber attacks by making it easier for these companies to access tools to protect themselves.

The Small Business Cybersecurity Assistance Act would authorize Small Business Development Centers (SBDCs) to work with the Department of Homeland Security (DHS) to provide consulting to small businesses on how to strengthen their cybersecurity protocols.

It would also require DHS to develop materials and programs for SBDCs to help the small businesses in their area defend against cyber attacks.

Peters and Rubio cited an industry report that found that small businesses accounted for 43 percent of data breaches in 2018, in touting the need for legislation.

"Too many small business owners say they lack the resources they need to safeguard their businesses and customers from hackers, fraudsters, and cybercriminals," Peters said in a statement. "This commonsense legislation will help ensure small businesses can access much needed information and training to secure their systems from malicious cyber-attacks."

Read more here.


AN OP-ED TO CHEW ON: The Huawei threat: China considers data to be critical national infrastructure 


A LIGHTER CLICK: Yet another interesting twist on curry.



Your data could be at the center of the fight against Big Tech. (The new York Times)

British Airways faces $230 million fine for customer data theft. (The Washington Post)

Ajit Pai has a new proposal to go after international robocallers. (The Verge)

Social media could make it impossible to grow up. (Wired)