Hillicon Valley: Trump officials to investigate French tax on tech giants | Fed chair raises concerns about Facebook's crypto project | FCC blocks part of San Francisco law on broadband competition | House members warn of disinformation 'battle'

Hillicon Valley: Trump officials to investigate French tax on tech giants | Fed chair raises concerns about Facebook's crypto project | FCC blocks part of San Francisco law on broadband competition | House members warn of disinformation 'battle'
© Getty Images

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).

 

TRUMP OFFICIALS TARGET FRENCH TECH TAX: The Trump administration on Wednesday announced an investigation into the French government over its plans to implement a tax on technology companies.

United States Trade Representative (USTR) Robert LighthizerRobert (Bob) Emmet LighthizerPelosi sounds hopeful on new NAFTA deal despite tensions with White House On The Money: Economy adds 164K jobs in July | Trump signs two-year budget deal, but border showdown looms | US, EU strike deal on beef exports Chinese, US negotiators fine-tuning details of trade agreement: report MORE expressed concerns that the French digital tax could disproportionately affect American companies.

ADVERTISEMENT

"The President has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce," Lighthizer said in a statement.

Background: The French finance minister said in March that the country would impose a 3 percent tax on the annual revenues of technology companies that make at least 750 Euros annually and provide services to users in the country.

The tax would affect multiple U.S. tech giants, including Apple, Google and Amazon.

So, what's next? The USTR investigation could serve as a precursor to the implementation of tariffs or other trade measures against France at a time when President TrumpDonald John TrumpDem senator says Zelensky was 'feeling the pressure' to probe Bidens 2020 Dems slam Trump decision on West Bank settlements Trump calls latest impeachment hearings 'a great day for Republicans' MORE has ignited trade disputes with other allies.

On Wednesday, the announcement of the investigation was greeted with bipartisan support

Read more here.

 

FED CHIEF JOINS LIBRA CRITICISM: Federal Reserve Chairman Jerome Powell on Wednesday said that Facebook’s proposed cryptocurrency project poses “serious concerns” and warned the company against a “sprint toward implementation.”

Testifying before lawmakers on Wednesday, the Fed chairman raised questions about how Facebook’s Project Libra could affect “privacy, money laundering, consumer protection and financial stability.”

“It cannot go forward without there being broad satisfaction with the way the company has addressed” those concerns, Powell told the House Financial Services Committee. “All of those things will need to be addressed very thoroughly and carefully.”

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, but lawmakers and regulators have expressed deep skepticism of the project given Facebook’s massive reach and a series of data and privacy controversies faced by the company in recent years.

“What they're planning raises serious privacy, trading, national security and monetary policy concerns for consumers investors, the US economy and the global economy,” said Rep. Maxine Waters (D-Calif.), chairwoman of the Financial Services Committee.

Waters and several Democrats on the Financial Services panel have called on Facebook to halt work on Libra until the company settles the concerns of lawmakers and regulators. Republicans have also expressed qualms with the potentially transformative impact of Libra.

Read more here.

 

FCC VS. PELOSI: The Federal Communications Commission (FCC) on Wednesday voted to override part of a San Francisco city ordinance aimed at promoting access to more broadband providers for residents in apartment buildings.

The FCC's proposal had generated backlash from Democratic lawmakers like House Speaker Nancy PelosiNancy PelosiOvernight Health Care: GOP senator says drug price action unlikely this year | House panel weighs ban on flavored e-cigs | New York sues Juul Five things to know about Tuesday's impeachment hearings McConnell hopes Senate impeachment trial 'not too lengthy a process' MORE (Calif.), whose district lies within San Francisco.

The 2016 ordinance required building owners to allow internet service providers to use existing wiring in their facilities in order to ensure that tenants have access to multiple providers.

The GOP-controlled FCC derided the ordinance as an "outlier" in broadband competition regulations that would deter broadband companies from deploying their own wiring to apartment buildings if they can simply use those of a competitor.

But San Francisco Mayor London Breed (D) wrote to Pelosi and the FCC this month arguing that the agency's reasoning reflects a misunderstanding of the law.

"San Francisco has told us on the record that this is not what the law does," Democratic FCC Commissioner Jessica Rosenworcel, who voted against the proposal, said Wednesday. "But even if it were true, the agency fails to determine here if such sharing would even be technically possible. All of which begs the question, why is the FCC doing this? Why are we preempting an imaginary possibility in a city ordinance in San Francisco?"

But FCC Chairman Ajit Pai disputed their interpretation of the local law and argued Wednesday that the order was narrowly worded in order to preempt San Francisco law only where it might require the shared use of wiring.

Read more on the proposal here.

 

THE RUSSIANS ARE COMING: House Appropriations Committee Chairwoman Nita LoweyNita Sue LoweyOn The Money: House passes monthlong stopgap | Broader spending talks stall | Judge orders Democrats to give notice if they request Trump's NY tax returns | Progressives ramp up attacks on private equity House passes stopgap as spending talks stall Key GOP senator: 'We need a breakthrough' on spending talks MORE (D-N.Y.) is describing the fight against Russian efforts to spread disinformation on social media as a conflict that the U.S. has “got to win."

At a Wednesday hearing, Lowey referenced the U.S. women's soccer team's World Cup win, saying: "We won the USA soccer match, I can’t believe that how difficult it is that we can’t win this battle."

The comments came during a House Appropriations subcommittee hearing on countering Russian disinformation and malign influence on social media and other communications platforms, particularly attempts to interfere in U.S. elections. 

Rep. Lois FrankelLois Jane FrankelUS must lead the charge on global reproductive rights — not stand in the way Charlize Theron: We didn't want the politics to overshadow 'Bombshell' Democrats introduce 'THUG Act' to block funding for G-7 at Trump resort MORE (D-Fla.) quipped in response to Lowey that it was “kind to call it a battle, I would call it a war.”

Rep. Hal RogersHarold (Hal) Dallas RogersTrump says he'll decide on foreign aid cuts within a week Pelosi warns Mnuchin to stop 'illegal' .3B cut to foreign aid Appropriators warn White House against clawing back foreign aid MORE (R-Ky.), the ranking member of the subcommittee, agreed with Lowey on the threats from Russia through disinformation campaigns, and suggested that an “interagency effort” may be needed to fully address the issue. 

Witnesses at Wednesday's hearing agreed with Lowey's assessment of the spread of Russian disinformation as an ongoing conflict.

John Lansing, the CEO of the U.S. Agency for Global Media, which has jurisdiction over Voice of America and Radio Free Europe, described the issue of countering disinformation as a “battle.” Lansing asked lawmakers to step up spending to combat Russian efforts.

Read more here. 

 

DATA AS PROPERTY?: A top House Republican wants internet users to own data that they generate online to give them more control over what is collected about them by internet companies.

Rep. Doug CollinsDouglas (Doug) Allen Collins'Fox & Friends' co-host Brian Kilmeade urges Trump not to tweet during impeachment hearings The Hill's 12:30 Report: Former Ukraine envoy offers dramatic testimony GOP eager for report on alleged FBI surveillance abuse MORE (R-Ga.), the ranking member on the House Judiciary Committee, released a set of internet privacy principles on Wednesday he said will guide legislation that he plans to release in the coming months.

“The private sector and the government must recognize consumer data as the property of the consumer,” Collins said in a statement. “When consumers generate data, they should have a powerful voice in who gets to use it, how much of it is used and under what conditions. Since it’s their property, consumers should also determine how much privacy they want surrounding their data.”

Collins is inserting himself in the privacy debate at a time when both the House and Senate are exploring potential legislation to establish the nation’s first comprehensive consumer privacy law amid heightened concern over the lucrative trafficking of user data.

But Collins’ principles don’t address the particular issues over which Democrats and Republicans have struggled to find common ground. Those include whether states should have a right to regulate privacy or if consumers can sue companies over abuses of their personal information.

Read more on the principles here. 

 

NOT SO FAST: A majority of voters say it is unnecessary for the government to move to break up big tech, a stance that differs from that of some top 2020 presidential contenders.

According to a new public opinion survey conducted by RealClear Opinion Research, 55 percent of respondents said it is unnecessary for the government to break up technology giant Amazon.

Fifty-five percent of voters also said it is unnecessary to break up Apple, and 53 percent said the same regarding Google.

Only 48 percent said it is unnecessary to break up Facebook, with 38 percent supporting a break up of the social media platform.

The survey asked respondents if the Silicon Valley companies should be broken up "on the grounds they are too big and powerful." The survey, conducted June 28 to July 1, included 2,000 registered voters.

Presidential hopeful Sen. Elizabeth WarrenElizabeth Ann Warren2020 Dems slam Trump decision on West Bank settlements Sanders doubles down on Bolivia 'coup,' few follow suit Overnight Health Care: GOP senator says drug price action unlikely this year | House panel weighs ban on flavored e-cigs | New York sues Juul MORE (D-Mass.) has been pushing to break up companies like Amazon and Google, saying they have too much power and breaking them up would ensure opportunities for the next generation of tech companies.

More young voters agree with Warren on breaking up big tech, the survey found.

Thirty-seven percent of voters in their teens, 20s and 30s, believe it’s necessary to break up Google compared to 29 percent of baby boomers and the silent generation, which includes voters in their mid-70s to mid-90s.

For Amazon in particular, 35 percent of voters in their teens, 20s and 30s support breaking it up compared to 25 percent of older voters.

Read more on the poll here. 

 

ANOTHER ELECTION SECURITY BILL: A pair of House lawmakers from Florida have introduced new legislation that would require the Department of Homeland Security (DHS) to notify voters and other parties of potential breaches to election systems.

Reps. Stephanie MurphyStephanie MurphyTrump administration unveils new plan for notifying public on 2020 election interference Overnight Health Care: House Dems clash over Pelosi drug pricing bill | Senate blocks effort to roll back Trump ObamaCare moves | Number of uninsured children rises House Democrats clash over Pelosi's drug pricing bill MORE (D) and Mike Waltz (R) introduced their measure following revelations earlier this year that Russia infiltrated computer networks in two counties in the Sunshine State ahead of the 2016 presidential election.

Members of the Florida congressional delegation blasted federal agencies in May for their lack of transparency about the cyberattacks, saying they only received an FBI briefing on the matter when 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 revealed in his report that the bureau was investigating a Moscow-led hack into "at least one" Florida county.

The FBI, which informed the Florida delegation that Russia had infiltrated a second county, has not permitted the members of Congress to reveal the names of which counties were targeted.

Murphy and Waltz have called that decision counterproductive, arguing that failing to provide notification about the attack on Florida's election systems has begun to erode public confidence in the state's elections.

Read more here. 

 

SHHH: Uber is expanding its no-talking rides and launching a helicopter service in New York City to bring people to the airport, the company announced Tuesday.

After first launching “quiet mode” on Uber Black and Uber SUV in May, the ride-hailing company said customers in dozens of states can now select this option for Uber Pool, UberX, Uber Black and UberXL.

Users who select a "comfort trip" in order to have a conversation-free ride will receive other premium features, including extra legroom and the ability to request a preferred temperature inside the car.

The feature is good for when “you need a little quiet time, prefer to stretch your legs, or simply like an extra comfortable ride out to dinner when friends are in town,” the company wrote in a release.

Read more here.

 

WEBMD IS SHAKING: The United Kingdom's health care service, the NHS, is partnering with Amazon's voice assistant Alexa to deliver medical advice to users from the service’s official website.

The NHS announced Wednesday that the "technology has the potential to reduce the pressure" on doctors, citing the increased use of digital voice assistants for online searches.

"We want to empower every patient to take better control of their healthcare and technology like this is a great example of how people can access reliable, world-leading NHS advice from the comfort of their home, reducing the pressure on our hardworking GPs and pharmacists," Secretary of State for Health and Social Care Matt Hancock said in a statement.

The move has raised concerns from privacy experts and advocates concerned about the implications of distributing medical information via digital assistant.

In a letter to Sen. Christopher CoonsChristopher (Chris) Andrew CoonsSenators press Facebook over user location tracking policies Senators introduce bipartisan bill restricting police use of facial recognition tech Centrist Democrats seize on state election wins to rail against Warren's agenda MORE (D-Conn.) earlier this month, Amazon revealed it keeps voice recordings and transcripts to help train its AI until users manually delete them.

Amazon said it erases transcripts "from all of Alexa's primary storage systems" when users manually delete voice recordings.

An Amazon spokesperson told The Hill that information related to medical questions will not be shared with third parties or used to create health profiles of users.

Read more here.

 

AN OP-ED TO CHEW ON: It’s time to legislate security for internet-connected devices

 

A LIGHTER CLICK: Midweek dog content.

 

NOTABLE LINKS FROM AROUND THE WEB: 

Denmark plans regulation of influencers following suicide note (BBC) 

China’s ZTE follows Huawei by opening new Brussels cybersecurity lab (Reuters)

The great race to rule streaming TV. (The New York Times)