September 14, 2022
Photo: Kevin Dietsch via Getty Images
Hello and welcome to Protocol Policy! Today I’m apparently projecting some unresolved high school angst onto Congress, but that doesn’t mean I’m wrong. Plus, Google’s many, many legal woes (and one victory).
In his Senate testimony Tuesday, Twitter whistleblower Peiter Zatko said U.S. regulators are so out of their depth when dealing with tech companies that the agencies let the firms “grade their own homework.” As lawmakers tossed in irrelevant, repetitive and vague questions, they made it clear they haven’t exactly been keeping up with the material either — and may have to take an incomplete if the final grade requires passing a bill.
Zatko, who goes by Mudge, was touted as the latest blockbuster tech witness in a years-long series of congressional hearings.
So were the senators smart, using their precious time to build the case for or improve upon current privacy proposals? Did they drive toward new ideas that would address Mudge’s concerns about foreign infiltration of social media and weak regulators?
GOP Sen. Lindsey Graham said he was working with Democrat Elizabeth Warren on a proposal for a standalone tech regulator.
Credit where it’s due: The Judiciary Committee where Mudge testified has advanced legislation on antitrust.
Sen. Amy Klobuchar, who is leading the antitrust push, sounded annoyed that her colleagues seemed to feel they’re still in the “tossing out ideas” phase of their group project when we’re actually in the crucial last possible moments to pass something, maybe for years.
Despite all this, there’s still a small (and ever-shrinking) chance for tech legislation to pass this year. The surprising productivity of Congress over the summer is a reminder that lawmakers can snap out of their customary inaction. But after Tuesday’s hearing, it’s even clearer that, if Congress produces, it’ll only be thanks to the few brainiacs who bothered to do the reading.— Ben Brody (email | twitter)
Google news is everywhere this week, and that’s not really a great thing for one of the world’s largest tech companies. Regulators and courts around the country and around the world are zeroing in on several of the company’s practices, pursuing lawsuits and levying sometimes-massive fines.
Here in the U.S., one of many massive antitrust lawsuits got a green light to move forward.
Google lost an appeal in the EU, meanwhile, and is still on the hook for a more than $4 billion antitrust fine.
And the antitrust suits don’t stop coming: Cases in the U.K. and the Netherlands are reportedly next.
It’s not all antitrust: Regulators in South Korea say Google’s breaking privacy laws, too.
The Treasury Department held strong on its ban of Tornado Cash, the Ethereum application that allows crypto users to obfuscate their payments trail. The application is useful to hackers to help them get away unidentified, as almost happened in the Axie Infinity case. Treasury offered guidance for users trying to remove Tornado Cash funds without violating sanctions.
Google entered a government agreement to work on open-source chips. The National Institute of Standards and Technology, Google and a handful of research universities agreed to work together on developing chips for nanotechnology and semiconductor research. Google agreed to subsidize initial production and pay for setup costs.Sens. Edward Markey and Ron Wyden want Immigration and Customs Enforcement to explain what they’re doing with facial recognition. In a letter to ICE, the two Democrats cite new findings from the Georgetown Law Center on Privacy & Technology, including that ICE has used the technology to identify 32% of all U.S. adults by their driver's licenses.
Alibaba — a leading global ecommerce company — is a particularly powerful engine in helping American businesses of every size sell goods to more than 1 billion consumers on its digital marketplaces in China. In 2020, U.S. companies completed more than $54 billion of sales to consumers in China through Alibaba’s online platforms.
Several research groups were solicited to dig up dirt on Zatko, according to a report in The New Yorker. The Twitter whistleblower said he was “disturbed by what appears to be a campaign to approach our friends and former colleagues under apparently false pretenses with offers of money in exchange for information about us.”
The SEC charged VMware with misleading investors by manipulating financials. Without admitting wrongdoing, VMware settled the charges for $8 million.
Customer experience in the enterprise: Join Protocol at 11 a.m. PT / 2 p.m. ET on Sept. 19, where we'll dive into the tech tools, tricks and real-life strategies that companies are using to build a CX tech ecosystem and prepare for an increasingly customer-first future. RSVP here.
4%: That’s the percentage of members of Congress below the age of 40, over the last 22 years on average, according to a Business Insider analysis. The current Congress is historically old: Between 1950 and 1990, on average 10% of members were under 40, and in the early 1980s, that number reached a high of 17%.
Congress is really good at trading stocks. Many times, they also happen to regulate the companies they’re buying: Between 2019 and 2021, 183 members of Congress or their immediate family traded stock, and more than half of them sat on committees that may have provided relevant information on company performance, according to a New York Times analysis. Tech companies were well represented in the full report.
Using economic multipliers published by the U.S. Bureau of Economic Analysis, NDP estimates that the ripple effect of this Alibaba-fueled consumption in 2020 supported more than 256,000 U.S. jobs and $21 billion in wages. These American sales to Chinese consumers also added $39 billion to U.S. GDP.
Thanks for reading. See you Friday.