Karl Herchenroeder

The Senate Intellectual Property Subcommittee plans to release draft legislation in December for updating the Digital Millennium Copyright Act, according to a tentative schedule from the office of Chairman Thom Tillis, R-N.C. The schedule includes hearings July 28, Sept. 16 and Oct. 6 leading up to December release of draft text for “stakeholder consideration and comment.”

At least two FTC employees working at the agency's Constitution Center reported potential COVID-19 symptoms in March, and another employee tested positive for the virus in Atlanta, according to emails we obtained through a Freedom of Information Act request.

HyperBeard, a kids app developer, agreed to pay $150,000 and to “delete personal information it illegally collected from children under 13,” the FTC said in a 4-1 settlement Thursday. The company allegedly violated the Children’s Online Privacy Protection Act rule by “allowing third-party ad networks to collect personal information in the form of persistent identifiers to track users of the company’s child-directed apps, without notifying parents or obtaining verifiable parental consent,” per a complaint filed by DOJ. It names HyperBeard CEO Alexander Kozachenko and Managing Director Antonio Uribe. Commissioner Noah Phillips dissented, saying, “Given the violations at issue, the harm to consumers, and how we have approached other COPPA cases, my view is that the fine imposed today is too much.” He questioned whether the $4 million penalty, which led to the settlement, was appropriate given the alleged harm, noting a $5.7 million penalty against Musical.ly (see 1902270059). Chairman Joe Simons disagreed, saying, “The goal of the civil penalty should be to make compliance more attractive than violation.” HyperBeard disagreed any of its games were directed at children under 13, but it settled to avoid “costly and distracting litigation,” the firm said, noting its limited resources as a “small company.” The “legacy apps” mentioned in the FTC complaint “have long been transitioned to COPPA-compliant advertising networks (which do not collect or use advertising IDs),” it said.

The FCC may wait a bit before taking up any NTIA petition for rulemaking to clarify the scope of the tech industry’s liability shield (see 2005290058), observers predicted in interviews this week. The Association of National Advertisers said it’s ready to defend marketers’ interests if threatened. A tech industry representative and academics told us President Donald Trump’s executive order last week sets a dangerous precedent and could compromise independent agencies.

COVID-19 highlights the need for federal baseline privacy legislation, which companies could have used to give consumers clarity about how data is used during the pandemic, FTC Commissioner Christine Wilson told the Brookings Institution Wednesday. The demand for privacy legislation has never been greater, she said.

Senate Intellectual Property Subcommittee Chairman Thom Tillis, R-N.C., Tuesday voiced support for an update to the Digital Millennium Copyright Act, and ranking member Chris Coons, D-Del., also appeared on board with an update (see 2005280038). Witnesses sought changes, other than the Internet Association.

Internet Archive should be blocked from scanning and sharing millions of literary works, the Association of American Publishers said Monday in a lawsuit at U.S. District Court for the Southern District of New York. AAP accused IA of sharing “some 1.3 million bootleg scans of print books” through public-facing online libraries. Plaintiffs are Hachette, HarperCollins, John Wiley & Sons and Penguin Random House. The lawsuit “condemns the fact that IA solicits and collects truckloads of in-copyright books in order to copy and make them available without permission,” AAP said, arguing there are no exceptions for this activity under fair use, the first sale doctrine or in the Digital Millennium Copyright Act. IA founder Brewster Kahle called the lawsuit “disappointing.” IA “acquires books and lends them, as libraries have always done,” which supports the publishing industry, he emailed. “Publishers suing libraries for lending books, in this case, protected digitized versions, and while schools and libraries are closed, is not in anyone's interest.” For too long, "IA has brazenly scanned and distributed published works while refusing to abide by the traditional contours of copyright law,” Copyright Alliance CEO Keith Kupferschmid said. Public Knowledge Legal Director John Bergmayer wrote in support of IA, saying controlled digital lending is fair use under copyright law: "The National Emergency Library, which expands on CDL, is justified under the circumstances of the pandemic, when so many print books paid for by the public are inaccessible." He urged Congress to support legislation "clarifying the right of libraries to make print books available to patrons electronically, and to serve their constituencies during times of emergency.”

FCC Chairman Ajit Pai questioned Twitter’s policies, as the platform for a second day flagged President Donald Trump’s tweets (see 2005280060). Pai asked Friday whether tweets from Iran Supreme Leader Ali Khamenei violate platform rules about glorifying violence, rules that Twitter cited in flagging Trump.

President Donald Trump signed an executive order Thursday that would remove liability protections for online platforms that censure or edit content (see 2005270016). There would be a role for antitrust agencies and the FCC, whose commissioners reacted along party lines to the EO. “We’re here today to defend free speech from one of the greatest dangers,” Trump said, claiming tech monopolies have “unchecked power” to censor and restrict human interaction.

Congress should require radio stations pay artists for broadcasting their music, SoundExchange and music performance rights holders told the Senate Intellectual Property Subcommittee Wednesday. Such a drastic change would upend the free radio broadcast model, said NAB and National Religious Broadcasters.