Startup News Digest 7/19/19

The Big Story: Congress takes scattershot aim at big tech. Congress held a series of tech industry hearings this week examining issues ranging from anti-competitive practices to allegations of political censorship and questions about Facebook’s proposed digital cryptocurrency. While lawmakers expressed a variety of concerns about the tech industry’s practices, there was little common ground between Democrats and Republicans about how to adequately address their worries.

The House Judiciary’s antitrust subcommittee held its second hearing into antitrust concerns surrounding Apple, Facebook, Google, and Amazon, with lawmakers attacking the companies for their market power. The Senate Banking Committee and the House Judiciary Committee both grilled David Marcus, head of Facebook's digital currency project, over their concerns about how the proposed Libra cryptocurrency would impact the U.S. financial system.

The Senate Judiciary’s Constitution subcommittee, chaired by Sen. Ted Cruz (R-Texas), also held a hearing into allegations that Google censors conservative voices. Cruz said critical liability protections given to online platforms under Section 230 of the Communications Decency Act should be stripped from platforms that fail to maintain political neutrality, which echoed legislation from Sen. Josh Hawley (R-Mo.), that would remove the protections from sites that don’t maintain political neutrality. An opinion piece published by the Washington Post’s Editorial Board highlighted how lawmakers’ obsession with removing Section 230 protections could have a negative impact on platforms across the Internet. 

Policy Roundup:

Lawmakers float crypto bills. Democrats on the House Financial Services Committee circulated a draft bill to prohibit large tech companies like Facebook from acting as financial institutions or issuing cryptocurrencies. Senate Banking Committee Democrat Brian Schatz (Hawaii) also circulated a discussion draft that would outlaw reserve-backed digital currencies.

G7 agrees to tax online giants. The G-7 financial chiefs announced that blueprints for taxing digital companies should be ready by the end of the year and agreed to by the end of 2020, and the policymakers raised concerns about digital currencies, such as Facebook’s Libra.

CASE Act moves out of committee. The Senate Judiciary Committee this week approved the CASE Act, a bill that would change copyright enforcement in the U.S. and, as we explained in our blog post last week, will "incentivize bad faith copyright infringement claims and create potential traps for startups and their users." 

Patent bill would help trolls over startups. House and Senate lawmakers reintroduced the STRONGER Patents Act, which would make it harder for startups and entrepreneurs to challenge granted patents in USPTO Patent Trial and Appeal Board (PTAB) proceedings. As Engine noted when the bill was introduced during the last Congress, “the only parties which will get stronger under this legislation are the patent trolls who are trying to roll-back protections Congress wisely adopted seven years ago.”

Startup Roundup:

#StartupsEverywhere. Traverse City, Michigan. When folks hear the name Traverse City, they think of cherries—it is the cherry capital of the world, after all. But Traverse City is increasingly becoming known for its entrepreneurial community of startups. We spoke with Andy Cole, executive director of 20Fathoms, about his organization’s role in northern Michigan’s startup ecosystem.