The Big Story: Fallout from Capital One breach. Capital One revealed that a massive data breach exposed personal information from over 106 million credit card holders and applicants. The announcement came after the FBI arrested a former Amazon Web Services employee accused of breaking through the bank’s firewall to access customer data stored on an Amazon cloud server. The FBI is already examining whether the woman accused of hacking into Capital One’s cloud server also successfully hacked into other organizations’ servers as well.
What the Copyright Office hearing means for startups. This afternoon, the Senate Judiciary Committee will hold an oversight hearing of the U.S. Copyright Office. Karyn Temple, the Register of Copyrights and Director of the U.S. Copyright Office, will testify about operations and policy activities at the Copyright Office.
The Big Story: Barr wants to end “warrant-proof” encryption. Attorney General William Barr said in a speech that tech companies should be required to provide law enforcement officials with backdoor access to “warrant-proof” encryption on devices and apps. Barr did not propose a solution or path forward during his speech, but said that encryption was “enabling dangerous criminals to cloak their communications and activities behind an essentially impenetrable digital shield.”
If asked about Rhode Island, any elementary school student would likely inform you that the Northeastern state is smallest in the Union by area. Rhode Island is also home to historic mansions, beautiful beaches, and large ocean bays. These days it is home to something else too--startup innovation and entrepreneurial energy. We spoke to Pat Sabatino, startup founder and executive director of the Rhode Island Coalition of Entrepreneurs to learn more about startups in The Ocean State.
China & the West Wing. White House economic adviser Larry Kudlow and Treasury Secretary Steven Mnuchin met with leaders of Google, Intel, Micron, Qualcomm, Broadcom, Cisco, and other tech companies yesterday to discuss Huawei and the China trade war. The Trump administration blacklisted Huawei and banned sales of U.S. technology to the Chinese telecoms giant on national security grounds in May, but President Donald Trump softened his stance at the G-20 summit in Osaka at the end of last month. This thaw helped to restart trade talks between the two countries that stalled back in May.
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.
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.
What Libra pushback means for startups. Congressional leaders in the House and Senate are planning to hold hearings this week about Facebook's recently launched Libra cryptocurrency. The hearings, as well as recent legislative and administrative responses to the digital currency proposal, could potentially impact blockchain and cryptocurrency startups.
Big Story. Trump administration targets social media sites. The White House criticized digital platforms over allegations of political bias during a social media summit this week. President Donald Trump and conservative lawmakers and activists have lashed out at major tech platforms over claims that they silence right-wing voices and viewpoints.
Sioux Falls is a Midwestern city that demonstrates beautiful integration of their natural environment. The Big Sioux River runs through downtown, culminating in the namesake falls that lie at the edge of the city center. But there is something else running through the city these days too--entrepreneurial energy. Matt Paulson, founder of Startup Sioux Falls, is working hard to integrate resources for startups into one organization, capture that energy, and build out the Sioux Falls ecosystem.
The Senate Judiciary Committee is taking up a bill today that would change copyright enforcement in the U.S. and open up startups and their users to new risks. The bill, the CASE Act (S.1273), would create a process for copyright holders to address online copyright infringement by establishing a Copyright Claims Board within the U.S. Copyright Office to adjudicate copyright infringement and award substantial financial damages without the traditional safeguards of federal court.
Section 230 of the Communications Decency Act has been privy to the ire of politicians at both ends of the political spectrum in recent weeks. That misplaced bipartisan disdain isn’t limited to the 1996 law, however. As the USMCA approaches formal consideration in Congress, attacks on the agreement’s Article 19.17, which mirrors the language of Section 230, have ramped up as well.
In a Ways and Means Committee hearing on trade policy earlier this month, Rep. Linda Sánchez (D-Calif.) showed clear animus towards the article in a terse exchange with U.S. Trade Representative Robert Lighthizer. Running over her time, the congresswoman asked why the U.S. intermediary liability rules were included in the agreement, saying she had “significant concerns regarding the USTR’s stance on CDA 230.” Ambassador Lighthizer defended the CDA 230-like language, saying “it’s U.S. law” and that the digital trade chapter is “a way for small internet companies to grow and use their advantages.”
The Ambassador is right. Article 19.17—and the digital trade chapter of the USMCA—will lead to greater innovation domestically and among our trading partners. As Santa Clara Law School professor and leading Section 230 scholar Eric Goldman points out in a letter signed by Engine, Article 19.17 is critical to this end because it lowers barriers, strengthens markets, and advances liberty.
Immunity for content generated by third parties on their platforms allows startups can get off the ground without exposure to potentially crippling lawsuits. It facilitates consumer trust by enabling third-party reviews, a hallmark of Internet commerce that would not exist without such protections. Finally, Article 19.17 expands free speech opportunities through increased access to platforms.
Unfortunately, Rep. Sánchez isn't alone in her criticism of the liability rules. Her Republican colleagues, Reps. Paul Gosar (Ariz.) and Matt Gaetz (Fla.), also oppose Article 19.17, attacking the U.S. liability rules that have fostered the internet we know today.
The House Democrats’ nine-member working group is focused on reconciling their issues with the USMCA in four areas: drug pricing, enforcement, labor, and the environment. While it appears unlikely that agreement will come to a vote with just 12 work days left before Congress enters its six-week recess, that list of issues need not be expanded. Going forward, the USMCA doesn't need another roadblock. Especially not one that needlessly picks apart the novel and innovation-advancing digital trade chapter.
The coastal city of Beaufort, South Carolina might not seem like your typical hub of startup activity, but the Beaufort Digital Corridor is working to make the city a destination for those who work in and around the tech industry. Modeled after the successful Charleston Digital Corridor established about 90 miles north of Beaufort, the BDC is working to drive further tech-related business growth across the Lowcountry region. BDC Board Chairman Kevin Klingler and Program Manager Shelley Barratt are focused on creating a nurturing startup community by building out networking and training opportunities, as well as a business incubator, to help spur the local tech industry.
It has been a busy couple of weeks in the Office of the U.S. Trade Representative. Last week, Ambassador Robert Lighthizer, the U.S. Trade Representative, appeared before committees in both chambers of Congress to testify about the president’s trade agenda and tariffs on Chinese imports. The USTR also heard testimony from over 325 witnesses—companies and trade groups—about the latest proposed tranche of Section 301 Tariffs. That hearings marathon wrapped up Tuesday.
The Subcommittee on Intellectual Property of the Senate Judiciary Committee recently held a series of hearings on the topic of patent subject matter eligibility. That Subcommittee is considering potential amendments to 35 U.S.C. §101—the provision of the Patent Act that defines what subject matter is (and is not) eligible for patent protection. In our view changes to 35 U.S.C. §101 are not needed, and we submitted comments to the Subcommittee articulating our concerns.
Big Story. Lawmaker targets content moderation practices. Sen. Josh Hawley (R-Mo.) introduced legislation this week that would impose a ‘politically neutral’ standard on internet platforms, upending critical protections that have allowed the Internet ecosystem to thrive.
Mount Desert Island is known for its natural beauty. Home to Acadia National Park, the island of 10,000 hosts more than three million visitors each year. The seasonality of the tourism economy imposes unique challenges for the island’s permanent residential population, but Mount Desert 365 is a community organization based in the village of Northeast Harbor working to promote year-round economic vitality through a focus on business incubation and infrastructure development.