Startup News Digest 4/19/19

The Big Story: Europe moves to further regulate online platforms. European countries moved this week to further regulate social media platforms, while the EU Council officially approved a divisive new copyright directive.

The European Parliament voted to fine companies up to 4 percent of their revenue if they repeatedly fail to remove extremist content from their platforms within one hour of being asked to do so by law enforcement authorities. The proposal, which comes after a gunman live streamed the murder of 50 people at two New Zealand mosques last month, is in response to EU officials’ concerns that companies are not doing enough to voluntarily police their platforms for extremist content during the initial posting period when content is most likely to spread across the Internet.

The United Kingdom’s data regulator also proposed rules this week that would make social media platforms block young users from using functions such as the ‘like’ button to curtail “positive reinforcement techniques” that encourage children to stay on social media. The country’s Information Commissioner’s Office said the use of so-called nudge techniques could encourage children “to provide an online service with more personal data than they would otherwise volunteer,” and runs contrary to the EU’s General Data Protection Regulation.

Meanwhile, the EU Council officially approved the bloc’s Copyright Directive that was passed by the European Parliament last month. 19 countries backed the directive at the Council’s vote, while six member countries — including Italy and the Netherlands  — voted against it. Three other countries abstained. Startups in particular are opposed to the new directive because it will require them to use expensive content moderation tools to police user-uploaded content.

Policy Roundup:

The Nuts and Bolts of User Privacy. Engine on Thursday hosted the first panel discussion in our “Nuts and Bolts of User Privacy” series, focusing on where the debate around consumer privacy stands today. 

Our second panel discussion in the series, focusing on the buzzwords of data privacy, will take place on Friday, May 3 at noon. Please RSVP here. Stay tuned for further information about our panelists.

Support net neutrality in the Senate. Earlier this month, over 120 startups joined Engine in calling on the House to pass the Save the Internet Act, which would reinstate the FCC’s 2015 net neutrality protections. We're resending our letter with updated wording to Senate leadership, encouraging them to bring the bill to the Senate floor for a vote. You can view the letter here and sign on here

Insurers don’t want to cover nation-state cyberattacks. Insurance providers are increasingly citing the “war exclusion” in insurance contracts to avoid covering companies victimized by cyberattacks that are attributed to foreign countries. The clause protects insurers from covering damage stemming from wars, and many insurance policies are narrowly tailored to only cover costs associated with the loss of customer data.

USMCA likely to have positive economic impact. The International Trade Commission released their report on the new-NAFTA agreement, stating the United States-Mexico-Canada Agreement would have a limited but positive impact on the economy. For the tech sector, the deal is seen as a big win for its inclusion of cross-border data flows and protection of intermediary liability. 

Tax breaks for Opportunity Zones. The Treasury Department released regulations to help clarify tax incentives included in the 2017 tax law, known as Opportunity Zones, that are designed to encourage investment in struggling communities. Supporters of the incentive pushed for officials to clarify the rules in order to ensure that funding is directed towards startups that can help create well-paying jobs instead of real estate development.

Startup Roundup:

Copyrighting the law. Startup UpCode is trying to streamline code compliance by providing free access to codes, code updates and local amendments from 32 states, but the company now faces a copyright lawsuit from the International Code Council, the nonprofit that develops codes used in building regulations in all 50 states.