Hillicon Valley: Election security looms over funding talks | Antitrust enforcers in turf war | Facebook details new oversight board | Apple fights EU tax bill

Hillicon Valley: Election security looms over funding talks | Antitrust enforcers in turf war | Facebook details new oversight board | Apple fights EU tax bill

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, Maggie Miller (@magmill95), and the tech team, Harper Neidig (@hneidig) and Emily Birnbaum (@birnbaum_e).

 

EYES ON ELECTION SECURITY: Funding to bolster election security efforts at the state level could become a sticking point during the ongoing government spending talks, with the House approving the funds while Republicans in the Senate remain staunchly opposed.

The spotlight was on the Senate Tuesday, as the Senate Appropriations Subcommittee on Financial Services and General Government marked up its portion of the annual spending bill, with the full committee due to vote on the bill Thursday. 

While the subcommittee will wait until after the markup to release its version of the annual financial services and general government funding bill, which includes appropriations for the Election Assistance Commission (EAC), it's unlikely to include election security funds due to Republican opposition.

Why it matters: This could become a factor in negotiations between the House and Senate over government funding bills and make it even more difficult for Congress to approve funding legislation prior to the end of the fiscal year on Sept. 30, which is needed to avert a shutdown.

The House already passed its version of the financial services and general government bill in June, which included $600 million for the EAC to distribute to states in order to "improve the administration of elections for Federal office, including to enhance election technology and make election security improvements."

Despite strong support for election security funding for states from both House and Senate Democrats, the House version of the appropriations bill passed without a single Republican vote, and Republicans who hold the majority in the Senate look unlikely to include the funding in their version.

Where the Republicans are coming down: Sen. John KennedyJohn Neely KennedyMORE (R-La.), the chairman of the Senate Appropriations Subcommittee on Financial Services and General Government, has been vocal in his opposition to including funding to bolster election security efforts in any funding bill from his panel. 

In a speech on the Senate floor last week, Kennedy argued that giving states funding for election security efforts could lead to a federal takeover of elections.

And the Democrats: In addition to requests from state officials, Senate Democrats have kept up sustained pressure on Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellMcConnell: Trump's troop pull back in Syria a 'grave strategic mistake' Overnight Defense — Presented by Boeing — Trump insists Turkey wants cease-fire | Fighting continues in Syrian town | Pentagon chief headed to Mideast | Mattis responds to criticism from Trump TSA head rules himself out for top DHS job   MORE (R-Ky.) to allow votes on a number of Democratic-backed election security bills, many of which include funding for states to bolster election cybersecurity.

McConnell has refused to allow votes on the majority of these bills due to concerns around federalizing elections, although the Senate has approved legislation to make hacking voting systems a federal crime and to bar individuals who interfere or attempt to interfere in U.S. elections from entering the country. 

A possible CR?: Both Rep. Mike QuigleyMichael (Mike) Bruce QuigleyIn testimony, Dems see an ambassador scorned, while GOP defends Trump Ex-Ukraine ambassador arrives to give testimony Tax-return whistleblower in spotlight amid impeachment fight MORE (D-Ill.), the chairman of a House Appropriations Subcommittee, and Kennedy told The Hill that a continuing resolution (CR) will likely be passed in the Senate to avert a shutdown, which would continue current funding levels for a certain time period and give Congress more time to negotiate. 

Kennedy said that while a CR was not ideal, he would be "fine" to approve one if Democrats pushed back on election security funds. 

Quigley, on the other hand, said that he viewed a potential CR as "a failure" of Congress.

"I think even a CR is a failure, but beyond that going a whole year on a CR is a worse failure, and a catastrophe shutting down," Quigley said.

Read more on the upcoming fight here. 

 

BIG TECH TURF WAR: The two federal agencies charged with investigating Big Tech are jockeying over how to divide up their responsibilities, setting up a messy showdown that could undermine the government's efforts to take on the Silicon Valley giants.

At a Senate hearing on Tuesday, Federal Trade Commission (FTC) Chairman Joe Simons and the Assistant Attorney General Makan Delrahim offered blunt assessments of the recent turf war between the FTC and the Department of Justice (DOJ)'s Antitrust Division over how to investigate the tech sector.

"I cannot deny that there are instances where Chairman Simons and my time is wasted on ... squabbles," Delrahim said, responding to a line of questioning from Sen. Mike LeeMichael (Mike) Shumway LeeOvernight Defense — Presented by Boeing — Pence says Turkey agrees to ceasefire | Senators vow to move forward with Turkey sanctions | Mulvaney walks back comments tying Ukraine aid to 2016 probe On The Money: Senate fails to override Trump veto over border emergency | Trump resort to host G-7 next year | Senators to push Turkey sanctions despite ceasefire | McConnell tees up funding votes Senate fails to override Trump veto over emergency declaration MORE (R-Utah).

Flashback: The FTC and DOJ, which are both tasked with enforcing the country's antitrust laws, have recently announced they are investigating some of the tech industry's biggest companies. Reports emerged over the summer that the FTC had agreed to take on Facebook and Amazon while the DOJ would look into Google and Apple. But a DOJ announcement in July made it clear that the department is looking into all the top tech companies -- not only Google and Apple.

The fight has spilled into the open: On Monday, just ahead of the Senate oversight hearing, The Wall Street Journal reported the FTC and DOJ have been scuffling over which agency will take the lead on Facebook.

At the hearing: "Is it even feasible for the two agencies, for you to split between yourselves what is in effect a single investigation?" Lee asked, noting that it's difficult to conduct a "piecemeal" antitrust investigation into a single company.

"It's not the normal thing to do, that's for sure," Simons replied.

Delrahim said it's possible the agencies "would look at different conduct, perhaps of the same companies."

Why it matters: Former FTC and DOJ officials told The Hill it's not uncommon for the agencies to have disputes over the "clearance" process, during which they decide how to divide up what issues to cover. But they said it's clear the FTC and DOJ's relationship has frayed in recent years and that the latest turf issues could stall the investigations into Big Tech.

"The disagreements between FTC and DOJ are unprecedented," David Balto, a former official at both agencies, told The Hill, calling it a "sign of government dysfunction at its worst."

More on the hearing and fight here.

 

A SUPREME COURT FOR FACEBOOK: Facebook on Tuesday released the charter for an oversight board that it is creating to review its content moderating decisions amid blowback over how it handles issues like hate speech and political content.

Company CEO Mark ZuckerbergMark Elliot ZuckerbergOn The Money: Supreme Court takes up challenge to CFPB | Warren's surge brings scrutiny to wealth tax | Senators eye curbs on Trump emergency powers Warren warns Facebook may help reelect Trump 'and profit off of it' Martin Luther King Jr.'s daughter knocks Zuckerberg for invoking her father while defending Facebook MORE, who first announced the plans for the board last year, wrote in an open letter on Tuesday that the new body is meant to give users confidence that there is a process in place to protect their speech.

"If someone disagrees with a decision we've made, they can appeal to us first, and soon they will be able to further appeal to this independent board," Zuckerberg wrote. "The board's decision will be binding, even if I or anyone at Facebook disagrees with it. The board will use our values to inform its decisions and explain its reasoning openly and in a way that protects people's privacy."

The oversight board will be set up like a supreme court for the social network and will be able to overrule the company on content decisions.

"A final decision will include a determination on the content, as well as a corresponding plain language explanation of the board's rationale," the charter for Facebook's oversight board reads. "At the board's discretion, the final decision may include a policy advisory statement, which will be taken into consideration by Facebook to guide its future policy development."

The board will have a maximum of 40 seats, with Facebook selecting some of the first members, who will then help fill out the rest of the board.

Read more on the oversight board here.

 

APPLE PUSHES BACK ON TAX BILL: Apple is challenging the European Union's decision to bill the U.S. company $14 billion in back taxes, saying the payback "defies reality and common sense."

Apple is requesting that the General Court, the second-highest court of the European Union, overturn the 2016 European Commission case in an appeal, Reuters reported.

The company is accused of receiving illegal state aid from Ireland to help it decrease its taxes over two decades.

Apple argues that the decision is flawed because the intellectual property rights were established in the United States, not in Ireland, and the Commission is attempting to alter the international tax system, Reuters reported.

"The Commission contends that essentially all of Apple's profits from all of its sales outside the Americas must be attributed to two branches in Ireland," Apple's lawyer Daniel Beard told the court, according to Reuters.

The EU executive countered Apple's argument, saying it did not intend to regulate international tax laws. Instead, it said Ireland should have researched Apple's taxes, Reuters reported.

Ireland is also fighting the 2016 decision because its economy benefited from the deal, according to Reuters.

Read more here.

 

BIBI LASHES OUT AT FACEBOOK: Israeli Prime Minister Benjamin NetanyahuBenjamin (Bibi) NetanyahuMORE has reportedly accused Facebook of caving to "pressure of the Left" after the platform shut down his chatbot on Tuesday, saying it had broken election rules.

"The chat bot is our way to talk to our supporters," Netanyahu said in a social media video, according to The Jerusalem Post. "They took a five kilo hammer and used it to crush us in the Likud; we are in a difficult struggle."

"I stand to so many pressures; Facebook doesn't stand up to the pressure of the Left," he added.

Israeli news site Ynet News reported that the chatbot illegally shared polling information in violation of the country's election laws.

"We work with Elections Commissions around the world to help protect the integrity of elections," a Facebook spokesperson told the Jerusalem Post. "Our policies clearly state developers are required to comply with all applicable laws in the country where their app is available. We have restricted this bot for violating local law until the polling stations are closed tonight."

Read more here.

 

Lighter click: Happy Birthday Emily!

 

An op-ed to chew on: Law enforcement's encryption dilemma 

 

NOTABLE LINKS FROM AROUND THE WEB: 

Breach leads to leak of personal data of almost the entire population of Ecuador (CNN)

Chicago school professor fights 'Chicago school' beliefs that abet Big Tech. (The New York Times)

Australia concluded that China was behind hack on its Parliament, political parties (Reuters)

Lawsuit: AT&T signed customers up for DirecTV Now without their knowledge. (Ars Technica)