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Don’t hold your breath on the Privacy Shield redo

Protocol Policy

Hello, and welcome to Protocol Policy! Today, we’re taking a closer look at the hype surrounding the U.S.-EU data transfer agreement. Plus, Meta’s smear campaign against TikTok, and Elon Musk makes a “shady” legal argument against the SEC.

Fool me twice

The Biden administration has been plenty tough on tech. But last week, the White House did the industry a solid, announcing it had struck an “agreement in principle” with the EU to allow transatlantic data flows.

Tech leaders have been desperate for this kind of news ever since a European court struck down the Privacy Shield framework in 2020. The news of a deal had them practically swooning. “With concern growing about the global internet fragmenting, this agreement will help keep people connected and services running,” Meta president of Global Affairs Nick Clegg said in a tweet, not missing the moment to remind global leaders of the all-too-relevant consequences of splintering the internet.

But the praise is a little premature. The truth is, the U.S. and the EU have a clear interest in appearing united against Russia’s invasion of Ukraine, and part of that unity comes in the form of promoting shared democratic values, including around privacy.

  • There’s a reason the announcement came as part of a much broader condemnation of Russia’s actions.
  • But just because the deal has become politically pragmatic doesn’t mean it’s on any surer legal footing than all the deals that came before it and were then undone in court.

Remember what ultimately killed Privacy Shield: the court’s concern that Europeans’ data wasn’t safe from spying by the U.S. government. Two years later, not much has changed. If anything, things have gotten worse.

  • Earlier this month, the Supreme Court unanimously made it a little easier for the government to invoke the state-secrets privilege in surveillance cases.
  • And just over a month ago, lawmakers revealed an ongoing bulk data collection program by the CIA, which has already slipped entirely out of the news cycle.
  • None of that paints a promising picture of American progress in checking government surveillance.

Details on the substance of the new framework are almost nonexistent. But the White House has hinted at some ways the new deal will address Privacy Shield’s problems.

  • It would establish a new Data Protection Review Court, so people living in the EU can seek redress in the U.S. But it’s unclear what form that court will take or where it will live.
  • The Biden administration also vaguely alluded to the creation of new privacy and civil liberties standards for U.S. intelligence agencies.
  • The White House says it will make these commitments in the form of an executive order, which of course will only last as long as the next president wants it to.

All of that has left Privacy Shield’s biggest critics dubious of the redux. That includes Max Schrems, whose lawsuit is what killed Privacy Shield to begin with.

  • "We already had a purely political deal in 2015 that had no legal basis. From what you hear we could play the same game a third time now,” Schrems said in a statement, noting that he “expect[s] this to be back at the Court within months from a final decision."
  • Others argue that there could be hope for the new framework if it also encourages companies’ pseudonymization of data in ways that are compliant with GDPR and an increasing number of state privacy laws in the U.S. “If you have those controls in place, it’s surveillance proof,” said Gary LaFever, CEO at Anonos, a software company that not coincidentally offers this service.

Despite the breathless celebration from the tech industry, this deal is a long way from done. Even once the fine print is finalized and codified in an executive order, its future — and the future of companies that will rely on it — will still be uncertain as the deal faces scrutiny from European courts.

It is crucial for the U.S. and EU to find a way forward on data transfers. It’s just not clear they’ve found that way yet.

— Issie Lapowsky (email | twitter)

In Washington

Meta paid a top GOP consulting firm to go on the attack against TikTok. Internal emails obtained by The Washington Post show executives at the firm, Targeted Victory, emphasizing the need to “get the message out that while Meta is the current punching bag, TikTok is the real threat.” The firm also reportedly tried to spread stories about TikTok challenges that didn’t exist — except as viral rumors on Facebook.

The Pentagon will award up to $9 billion in cloud contracts in December. The DOD has already solicited bids from Amazon, Google, Microsoft and Oracle.

The FTC is suing Intuit, arguing that TurboTax’s “free” tax filing system is deceptive and often ends up leading to unexpected fees for consumers. Intuit has called the agency’s claims “simply not credible.”

In the states

Dozens of state AGs told Snap and TikTok they’re not doing enough to protect kids. In a letter, the AGs argued both companies should work more closely with parental control apps, which “can alert parents or schools to messages and posts on your platforms that have the potential to be harmful and dangerous.”

There’s a battle over crypto mining raging in a tiny town in upstate New York, and it’s prompting elected representatives from the area to push a bitcoin-mining moratorium throughout the state.


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In the courts

Activision Blizzard has settled its federal sexual harassment suit. The settlement will create an $18 million victim relief fund. But that’s not the end of its legal issues: The company still faces a number of other suits, including from the California Department of Fair Employment and Housing.

D.C. Attorney General Karl Racine wants to resume his antitrust lawsuit against Amazon. Racine’s complaint was dismissed by a district superior court judge earlier this month. But he tweeted that his office is now “preparing a motion for reconsideration.” Racine’s suit alleged that by forcing sellers to guarantee the best prices on its platform, the company raised prices for consumers overall.

Around the world

Russia is threatening to fine YouTube for allowing videos from far-right Ukrainian groups to stay on the platform. Russia’s telecom regulator said YouTube is participating in an “information war against Russia.”

Yandex is routing some user data through Russian servers, raising concerns about the Russian government’s access to it. According to FT, the issue lies with Yandex’s SDK, which is used by lots of apps, including VPNs specifically for Ukrainians.

In the media, culture and metaverse

Meta’s moderators are scrambling to keep up with the company’s rapidly evolving rules regarding Russia and Ukraine. It has responded by lifting some of the quality controls that typically gauge how effective moderators are at enforcement.

Indian Twitter accounts helped drive a pro-Kremlin narrative in the days after the invasion of Ukraine. Researchers say some of the accounts have exhibited suspicious behavior, including using stock photos for profile pictures. Twitter is now investigating whether the tweets are part of an inauthentic campaign.


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Guess who's back

Elon Musk has been in a neverending spat with the SEC over his tweets since 2018. Now, in his bid to get out from under an SEC consent decree and win back the right to be even more bizarre on Twitter than he already is, Musk and his legal team are citing a novel legal argument from noted scholar… JK, they’re just quoting Eminem lyrics. “The [SEC] won’t let me be or let me be me, so let me see…,” a new court filing reads (seriously). There’s a point about the First Amendment in there somewhere, we think.

Thanks for reading — see you Friday!

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