The Big Story: Section 230, privacy, encryption in crosshairs at kids safety hearing
The Senate Judiciary Committee held a hearing Tuesday on protecting children’s safety online, where lawmakers suggested changes to several issues important to startups, like Section 230, data privacy, and encryption. The wide-ranging proposals appear conceived with the largest tech companies in mind, but they would affect all Internet companies, especially startups. The hearing comes amid efforts from policymakers at all levels of government aimed at safeguarding young Internet users that could carry unintended negative consequences for startups without necessarily protecting children.
A key theme of the hearing centered on Section 230, a procedural statute that says the person who creates a piece of content is ultimately responsible for that content and protects websites from being sued over content they did not create. Several senators voiced desire to repeal Section 230 to “terrify” companies into “doing more” about potentially-illegal or harmful content on their services by opening them up to expensive private lawsuits. Startups and other Internet platforms don’t want illegal and harmful content on their services because it drives away users and advertisers, and they already invest heavily in content moderation. Removing Section 230 will expose startups to existential lawsuits, including meritless lawsuits unrelated to policymakers’ goals of protecting kids online. And as Sen. Mazie Hirono (D-Hawai’i) pointed out at the hearing, major changes to 230 could run into expression and First Amendment issues.
Several witnesses at the hearing pointed to the importance of nuanced approaches to improving Internet safety for children and young adults. Multiple witnesses highlighted both positives and negatives that come with Internet use and underscored the utility of Internet services for users of all ages. Banning use of certain Internet services for users under a certain age would not be effective because kids will likely find ways around it, several witnesses said. In the same way, requiring age-verification could put kids at higher risk and undermine their privacy by requiring that they hand over sensitive documents to access the Internet and by increasing the amount of data Internet services collect in order to estimate a user’s age.
Fortunately, the hearing highlighted several affirmative steps that can be taken to protect children and hold bad actors accountable. The hearing underscored the volume of reported cases of Child Sexual Abuse Material (CSAM) that go uninvestigated. Longer retention periods, standardized reporting, and more resources to investigate those reports could each increase the amount of CSAM cases that are investigated and prosecuted. The hearing also highlighted a strong desire to improve privacy protections for children. While many Senators highlighted kid-specific bills, many of the provisions were also found in a comprehensive data privacy bill that advanced last Congress as well. That bill would give critical protections to children and all Internet users alike, and improve compliance by creating clear obligations for companies.
Policy Roundup:
Third confirmation hearing for telecom policy nominee Gigi Sohn. On Tuesday, Federal Communications Commission (FCC) nominee Gigi Sohn appeared before the Senate Commerce Committee for a third time in the two years since President Biden initially nominated her. As Engine explained this week, the hearing touched on a wide range of issues but focused on the importance of fostering better connectivity in rural areas—something integral to startup and small business formation. As Engine has stated before, Sohn has been a long-time advocate of innovation, and the Senate should confirm her so she can get to work on policy goals that will support the innovation ecosystem.
Scammers targeting startups, threatening IP. In a new blog this week we examine one scam gaining in popularity where bad actors are targeting startups by impersonating government officials to extract payment from startups to “renew” their existing trademarks. The scam is one more unfortunate example that demonstrates how intellectual property systems can be weaponized against startups. In the blog, we explore what startups can do to protect themselves, and what policymakers should do to help mitigate abuses like this scam.
Only remaining Republican FTC Commissioner to resign. In a Wall Street Journal op-ed this week, Federal Trade Commissioner Christine Wilson announced she intends to soon resign over disagreements with the direction of the Commission under the leadership of Chair Lina Khan. Wilson was the only Republican commissioner remaining at the FTC following Noah Phillips’ resignation last fall. Her impending departure comes as the FTC considers issues important to startups like potential privacy rules, a ban on noncompete agreements, and a rewrite of the merger guidelines.
Policymakers must support Black innovators for an equitable innovation ecosystem. Black entrepreneurs and startup founders have continually faced barriers to participating in the innovation economy, despite creating unique, needed products for their communities and consumers around the globe. Already this year, many Black founders have renewed their calls for policymakers to take steps to make the startup ecosystem more equitable. Last week, Tani Chambers—Founder and CEO of startup RAVN, a wealth-planning platform for women from underrepresented groups—noted how “with increased access for diverse investors, startup funding itself will become more diverse” in a statement read into the record at a congressional hearing. And Carolyn Pitt—Founder and CEO of Productions.com—echoed these points in an op-ed earlier this year, highlighting how important “a true and impactful path to lasting support for Black women entrepreneurs is for there to be diverse faces that exist among decision-makers at every level of the innovation ecosystem.”
Startup Roundup:
#StartupsEverywhere: State College, Pennsylvania. Lightscline is building AI-based software that helps engineering teams achieve up to 90 percent cost reduction in sensor data pipeline management. The software collects 2 to 10 times less data, reducing the power, compute, storage, transmission, and latency in digital transformation applications. Deep tech-focused founder Ankur Verma gave us insight into his background as a student entrepreneur operating with his University’s support, his experience navigating the U.S. immigration system, and his goals for Lightscline.
