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Politics

Congress is unleashing the FTC on COVID-19 scammers

The second stimulus package will expand the FTC's authority to penalize companies promoting fake information and faulty products.

Congress is unleashing the FTC on COVID-19 scammers

The FTC will finally have the authority to immediately fine scammers touting fake COVID-19 treatments and lies about pandemic government benefits.

Photo: Al Drago/Getty Images

The FTC will finally have the authority to fine scammers touting fake COVID-19 treatments and lies about pandemic government benefits, thanks to new language in the economic stimulus package set to pass on Monday.

COVID-related scams proliferating online have overwhelmed government agencies and cost Americans more than $145 million since the beginning of the pandemic — and the FTC has been almost powerless to stop them, thanks to limitations on the agency's authority.

Now, the $900 billion coronavirus relief package is expected to include a provision enabling the FTC to penalize companies for promoting scams related to "the treatment, cure, prevention, mitigation or means of diagnosis of COVID-19" and "promises related to COVID-19 government benefits," according to bill text. The provision will ensure the agency has expanded authority to fine the companies up to hundreds of thousands of dollars for their first offense and demand refunds for customers who wasted money or divulged sensitive personal information.

Social media companies have announced new policies to crack down on misinformation surrounding COVID-19, but their platforms still regularly host scams purporting to advertise cures and vaccine access. Fraudsters are already beginning to promote early access to the COVID-19 vaccine in WhatsApp groups, online ads and robocalls, according to Pfizer's chief security officer.

"Predators are using the pandemic to take advantage of people when they are afraid and vulnerable," said Rep. Jan Schakowsky, who introduced the bill in the House. "The COVID-19 Consumer Protection Act gives the FTC the authority to go after COVID fraudsters and impose significant fines after the first offense. I'm glad we were able to include our bill in the COVID relief package. The FTC has long needed stronger tools to protect American consumers and deter bad actors during emergencies, and now it has them."

Health officials are bracing for a second spike in scams as the vaccine rolls out nationwide and Congress prepares to authorize a new round of stimulus payments. The new legislation won't go after platforms like Amazon for hosting bunk treatments, but it will give the government greater authority to go after the scammers themselves.

The FTC this year has sent more than 350 warning letters to companies and individuals it caught promoting false information and products about the pandemic, but lawmakers have criticized those efforts as toothless and limited. Warning letters don't get money back to consumers, and scammers can oftentimes launch new false campaigns under a different title. In response, the FTC asked for expanded civil penalty authority to after fraudsters.

"My view of the FTC is simple: You should be doing everything in your power to help Americans during this time of crisis," Sen. Maria Cantwell said during a hearing in August. "The COVID-19 pandemic has attracted bad actors and scam artists, including those who take advantage of people's fear and dire circumstances. We must move beyond warnings and threats in response to these unconscionable scams. We must see the FTC exercising real enforcement with real consequences to protect consumers and families when they are most vulnerable."

The COVID-19 Consumer Data Protection Act was originally introduced by Sen. Cantwell and co-sponsored by Senate Commerce Committee Chairman Roger Wicker.

"Chairman Wicker is pleased to see this important measure included in the relief package," said a Senate Commerce Committee spokesperson. "The bill would protect consumers from scammers and other bad actors seeking to defraud them and exploit the pandemic for their own personal gain."

Cantwell also sought to include provisions cracking down on COVID-19 price-gouging in the latest relief package, but aides were unable to come to a consensus on that language, according to a Hill aide.

Politics

What tech policy could look like in Biden’s first 100 days

More antitrust laws and bridging the digital divide should be top of mind for the incoming administration.

Antitrust enforcement is one of the big lessons going into the Biden administration.
Photo: Alex Edelman/Getty Images

Although it is too soon to tell with certainty how President-elect Joe Biden will address the questions surrounding tech policy, it is clear that his inaugural transition on Wednesday will affect the world of tech.

Protocol reporters Issie Lapowsky and Emily Birnbaum, virtually met up with panelists Tuesday to discuss what tech policy and regulation could look like in Biden's first 100 days in office — as well as the next four years.

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Penelope Blackwell
Penelope Blackwell is a reporting fellow at Protocol covering ed-tech, where she reports on the decisions leading up toward the advances of remote learning. Previously, she interned at The Baltimore Sun covering emerging news and produced content for Carnegie-Knight’s News21 documenting hate and bias incidents in the U.S. She is also a recent graduate of Columbia University’s Graduate School of Journalism and Morgan State University.
Politics

Silicon Valley is cracking down on Congress

Big Tech's pause on PAC contributions highlights how powerful it's become.

Democrats are particularly frustrated by Facebook, Google and Microsoft's decision to halt PAC contributions altogether, rather than targeting particular Republican lawmakers.

Photo: Tobias Hase/Getty Images

Congress has failed to act on every opportunity it had to seriously rein in the power of Big Tech over the last several years. Negotiations over a federal privacy bill fell apart last year, antitrust reform hit partisan headwinds and every debate over content moderation since 2016 has devolved into a theatrical yelling match that left the parties more divided over solutions than ever.

And now, the bigger-than-ever Silicon Valley is flexing its muscles with impunity as companies cut off violent extremists and wield the power of their political donations, acting more like a government than the U.S. government itself. They're leaving Republicans and Democrats more frustrated and powerless than ever in their wake.

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Emily Birnbaum

Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.

Senate Majority Leader Mitch McConnell teed up a bill to increase government stimulus checks from $600 to $2,000 and repeal Section 230.

Photo: Jim Lo Scalzo/EPA/Bloomberg via Getty Images

Senate Majority Leader Mitch McConnell is tying the fate of $2,000 stimulus checks to the repeal of Section 230, an effort that will likely doom both pieces of legislation in the Senate.

McConnell on Tuesday teed up a bill to increase government stimulus checks from $600 to $2,000 and repeal Section 230, the law underpinning the modern internet.

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Emily Birnbaum

Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.

Politics

In 2020, COVID-19 derailed the privacy debate

From biometric monitoring to unregulated contact tracing, the crisis opened up new privacy vulnerabilities that regulators did little to address.

Albert Fox Cahn, executive director of the Surveillance Technology Oversight Project, says the COVID-19 pandemic has become a "cash grab" for surveillance tech companies.

Photo: Lianhao Qu/Unsplash

As the coronavirus began its inexorable spread across the United States last spring, Adam Schwartz, senior staff attorney at the Electronic Frontier Foundation, worried the virus would bring with it another scourge: mass surveillance.

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Issie Lapowsky
Issie Lapowsky (@issielapowsky) is a senior reporter at Protocol, covering the intersection of technology, politics, and national affairs. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing. Email Issie.
Protocol | Enterprise

How Christian Klein’s reboot of SAP’s strategy is working out

The pandemic wasn't kind to the company. But the way it's working with the major COVID-19 vaccine makers is a model for what comes next.

Christian Klein became SAP's sole CEO in April.

Photo: Picture Alliance/Getty Images

Christian Klein took over as SAP's sole CEO in April. It wasn't an ideal time to take the helm of an organization that sells expensive enterprise software.

As the spread of COVID-19 forced corporations everywhere to cut costs, one of the first places they looked was IT budgets. Specifically, companies around the world trimmed spending on back-end products, such as those offered by SAP, many of which still run via on-premise data centers.

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Joe Williams

Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

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