House Speaker Nancy Pelosi and President Joe Biden having a discussion in the Capitol Rotunda
Photo: Drew Angerer via Getty Images

Biden wants the US to take back the reins on tech policy — from the states

Protocol Policy

Hello and welcome to Protocol Policy! Today I’m reminded of the fact that presidents tend to think in years-long priorities, not just weeks. Plus, Gensler is trying to tighten his grip on crypto, and tech told the world about the passing of Queen Elizabeth II.

Tea leaves and takeovers

The White House on Thursday released its six principles for tech policy reform. There were a few ways to interpret the terse Washington oracles — as a declaration that semi-stalled antitrust legislation is the Biden administration’s top tech priority, as an attack on Section 230 or (as I saw it initially) as a nudge to Speaker Nancy Pelosi and Sen. Maria Cantwell not to kill privacy legislation. But there’s another way to think about the statement: as a thank-you to California for its service to privacy and kids’ protection — and to tell all those states that have been experimenting with tech policy, “The feds will take it from here.”

Pelosi is wishy-washy on the current privacy bill, which many consumer and civil rights advocates support, because of her home state’s concerns.

  • The American Data Privacy and Protection Act mostly nullifies state-by-state data protection approaches as a way to get the Republican sign-on that will be necessary for the measure to pass the Senate.
  • But California, the U.S.’s undisputed privacy leader, is furious about what would happen to its rules under ADPPA, even if there’s some dispute about whether the federal bill is stronger.
  • You can interpret that anger either as a cranky bureaucratic power grab at the expense of most other states, or as realism about what will happen when some flaw in a federal privacy law emerges and only Sacramento is willing to tackle it.

The White House, while leaving some room for Pelosi’s stated aim of striking a new compromise, was pretty clear that covering the whole U.S. is its priority.

  • No surprise there — Biden is president of the whole U.S., after all — but that probably means keeping Republicans on board, or “bipartisan interest” in White House speak.
  • It may also mean trying to pass something in the few remaining weeks of this Congress.
  • Republicans are likely to strengthen their hand in the House in November’s elections, to the detriment of California’s hopes, although the GOP may still be willing to work quietly with this White House on privacy — and some other key issues.

And privacy’s not the only dance that the administration is doing with California.

  • “Platforms … should be required to prioritize the safety and wellbeing of young people above profit and revenue in their product design, including by restricting excessive data collection and targeted advertising to young people,” the White House said.
  • That part about kids’ safety over profits sure sounds like the U.K.-inspired “Age-Appropriate Design Code” that just passed the California legislature and is awaiting the governor’s signature.

Biden seems to be looking for the federal government to run with that idea too, likely by getting behind bipartisan legislation that advanced out of committee in July, which might also have a shot next year.

  • Interestingly, that legislation, known as the Kids Online Safety Act, also has some transparency requirements, at least as they pertain to the impact of social media services on young users.
  • And transparency around content moderation — for everyone — was another of the White House principles …
  • … as was banning algorithmic discrimination, which may prompt the administration to look to some of the state and local work on bias and audits, especially New York City’s hiring statute.

Consumer advocates have gone to the states on tech issues in recent years, partially because they can be more successful there but also to put pressure on Congress to act. Now, even as some of those advocates have joined the White House, Biden is saying the time is right for Congress to take over the work for all of the U.S. — even if it means California has to stand down.

— Ben Brody (email | twitter)

In Washington

SEC Chair Gary Gensler said most crypto tokens are securities, and that’s that. Speaking at a conference yesterday, Gensler said the SEC role for overseeing securities “should not change just because the issuance and trading of certain securities is based on a new technology.” He added that he looks forward to working with Congress to ensure the Commodity Futures Trading Commission has all the authority it needs to oversee and regulate crypto non-security tokens and related intermediaries.

Senators couldn’t agree on how to save local journalism from Big Tech. During a Thursday Senate Judiciary Committee hearing, Sen. Ted Cruz introduced an amendment that split the already tenuous bipartisan coalition for the Journalism Competition and Preservation Act, which would give media organizations the ability to collectively bargain for pay rates from the likes of Meta and Google. The amendment said publishers couldn’t discuss content moderation in negotiations. After it passed, Sen. Amy Klobuchar asked to hold the legislation since “the agreement we had was blown up.”

The Federal Election Commission unanimously rejected a complaint about Mark Zuckerberg’s $400 million donation to election infrastructure in 2020, according to the Washington Post. Many Republicans have become convinced of far-fetched and unsupported claims that “Zuckerbucks” — a move to help states and local governments hire poll workers or buy COVID-19 protections — was somehow a giveaway to Democrats, or even that it swung the election.

In the states

President Biden will attend the Intel plant groundbreaking ceremony in Ohio. It’s part of a midterm push to show progress in bringing manufacturing jobs back to the U.S.

California’s electric grid is going to need every penny of the $8 billion set aside for upgrades. This is especially true as the state pursues EV transition goals, with a ban on the sale of new gas-powered vehicles set for 2035. Blackout concerns have persisted for much of the week as the state faces record heat.


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In the courts

New reports show Twitter whistleblower Peiter “Mudge” Zatko received a $7 million settlement in June. Zatko negotiated his lost compensation with the company and also signed an NDA that prevents him from speaking about his Twitter tenure except in Congressional hearings or government whistleblower complaints … which happens to be what he’ll do in a U.S. Senate Judiciary Committee meeting on Tuesday.

Coinbase is funding a lawsuit against the U.S. Treasury Department. The lawsuit argues against sanctions placed on the use of Tornado Cash, a cryptocurrency tool that allows users to make it more difficult to trace the origin of a payment.

Google began laying out its defense against the Justice Department. The company argued that even though it pays for Google to be the default search engine on some mobile devices, users are free to change if they desire. The appearance before federal judge Amit Mehta on Thursday was intended to familiarize him with Google’s business, according to Axios.

Meta engineers testified that they don’t really know where user data ends up, Vice reports. One engineer said the company has a “somewhat strange engineering culture,” which he also called “terrifying.” Cool!

The Lizcourse

Depths of Wikipedia, a popular Twitter account known for screenshotting wonderfully wacky articles from the user-edited online encyclopedia, posted about how the community of volunteers is handling the death of Queen Elizabeth II. The editor who first added the news of her passing now has “bragging rights” and fans, according to the thread, while a whole bunch of users changed verb tenses, made a page for reactions and handled the ambiguity of the time between King Charles III’s automatic ascension and the announcement of his regnal name.


USD Coin (USDC) is the institutional grade stablecoin. Monthly attestations show exactly what reserves back USDC, and businesses all over the world are using USDC to build the next generation of financial services and global payment applications.

Learn why institutions trust USDC at Circle’s Transparency & Stability Hub

Thanks for reading, see you Monday.

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