Regulators and policymakers should find ways to maximize international data flow through legislation and trade deals that recognize the public’s right to data privacy, Apple, IBM and BSA|The Software Alliance representatives said Thursday. It’s not about reducing data privacy enforcement, said Apple Global Trade and International Affairs chief Lisa Pearlman, moderating a Washington International Trade Association panel. Finding balance between restricting and enabling data transfers is “one of the biggest challenges,” she said. IBM Market Access and Trade Director Steve Stewart said the more stringent data localization requirements, the less businesses can operate and compete. He noted two-thirds of IBM’s revenue comes from outside the U.S. It’s critical to get cross border data flow rules correct, said BSA Policy Director Joseph Whitlock. He claimed 98 percent of all international data ever gathered was created in the past two or three years. China is the most significant threat to international data flows, C&M International CEO Robert Holleyman said. In China, domestic companies have a clear advantage over international competitors because of data localization standards, he said. Artificial intelligence will have broad, economywide impacts on trade, said Brookings Institution Global Economy and Development Senior Fellow Joshua Meltzer. Large data sets are necessary to improve AI accuracy, he said.

Negotiators agreed on an EU copyright update. The draft, the focus of intense lobbying, would give news publishers a right covering digital use and require online content-sharing platforms get license for copyright-protected works uploaded by users, the EU Council said Wednesday. Those provisions, Articles 11 and 13 respectively, are controversial (see 1901250001). It's "a worrying version of Article 11 ... and the most negative version of Article 13," said Member of European Parliament Julia Reda, of Germany and the Greens/European Free Alliance. The compromise "goes beyond any text the Parliament has previously agreed to by including even small businesses on the controversial upload filter provision," which lawmakers' version excluded, she said. Article 13 now mirrors a French-German deal to force all for-profit sites and apps where users may share content to install upload filters, with narrow exemptions, said Reda. The agreement is a "step backward" but not the end of the road, she said: It needs final approval from governments and the European Parliament. The Computer & Communications Industry Association opposed Articles 11 and 13, and said Wednesday 11, which introduces the new right known as the "snippet tax," risks restricting the freedom of online quotation. Article 13 "weakens existing EU legal protections for Internet services," CCIA said. The draft sets mandatory exceptions to copyright for text- and data-mining, online teaching activities and preservation and online dissemination of cultural heritage; and provides for harmonized rules to make it easier to exploit out-of-commerce works, issue collective licenses, and clear rights for films by VOD platforms, the Council said. It enshrines authors' and performers' right to receive appropriate, proportionate remuneration when their rights are licensed or transferred. The European Consumer Organisation called this a "disappointing outcome for consumers" that will make it much harder for them to share their own noncommercial music, video or photo creations online: "This reform is not based on the reality of how people use the internet." The European Magazine Media Association, European Newspaper Publishers' Association, European Publishers Council and News Media Europe urged Parliament "to endorse the text, as soon as possible." In the U.S., the News Media Alliance likewise wants "swift adoption by the Council and the Parliament of the final Directive to secure the sustainability of high-quality journalism in Europe."

The Office of the U.S. Trade Representative should defend U.S. interests against intellectual property threats in the EU, China and various countries, tech groups commented through Thursday night. USTR collected comments for its Special 301 report on international IP practices. Copyright safe harbors included in the Digital Millennium Copyright Act and exceptions like fair use are critical, the Internet Association said, citing IP threats from the EU, China and others. Efforts to chip away at the safe harbor framework “threaten the ability of internet companies to expand globally by eliminating” copyright certainty, IA said. BSA|The Software Alliance cited “digital protectionism and isolationism.” Restrictions on “cross-border data transfers; coercive technology transfer; and discrimination against foreign companies, products, and technologies” are counter to U.S. interests, BSA said. The Computer & Communications Industry Association asked USTR to recognize that Europe is attempting to weaken liability protections and enact “copyright policies that will likely have significant negative consequences for the digital economy” like “snippet taxes.” Counterfeiting and piracy in China “remain at epidemic levels,” the U.S. Chamber of Commerce said. Ongoing trade negotiations offer opportunity for the U.S. and China to address IP protection and technology transfer issues, the chamber said. Theft and infringement in China continue to put the software industry at risk, ACT|The App Association said, recommending China remain on the priority watch list. Algeria, Argentina, India, Indonesia, Kuwait, Russia and Ukraine also should remain on the list, ACT said. Public Citizen raised concerns about Malaysia, which hasn't been on the watch list since 2012.

Germany’s competition enforcer Thursday ordered Facebook stop combining Instagram and WhatsApp user data, citing market abuse in a 2016 antitrust case. Facebook will appeal: The Bundeskartellamt “underestimates” Facebook’s “fierce” competition in Germany, “misinterprets” general data protection regulation compliance and “undermines” the consistency of European data law. “Using information across services helps to make them better and protect people’s safety,” the company said. Regulators need to “recognize personal data is necessary to innovation in the digital economy and act accordingly,” Center for Data Innovation Senior Policy Analyst Eline Chivot wrote. Germany is circumventing the GDPR, potentially opening new legal tools other countries could use against social media platforms, Cowen analyst Paul Gallant said.

Universal Electronics Inc. is streamlining operations,” said the company Wednesday. The remote control maker is relocating engineering, supply chain and customer support functions from its Hong Kong regional office to its facilities in Panyu and Suzhou, China. The process began in late 2018 and is expected to be completed over the next three to six months. Also, in response to higher tariffs for its China-made products, the company is moving production to its UEM facility in Monterrey, Mexico, and to a newly assigned contract manufacturing partner in the Philippines. Dougherty & Co. analyst Steven Frankel said the moves “are designed to deliver on management's promise to hold expenses at 2018 levels through 2020.”

Efforts by major internet players to remove illegal online hate speech won high marks from the European Commission Monday. Dailymotion, Google Plus, YouTube, Facebook, Instagram, jeuxvideos.com, Microsoft, Snapchat and Twitter agreed to be bound by a 2016 code of conduct aimed at stopping proliferation of racist and xenophobic hate speech online, the EC said. EU law defines illegal hate speech as public incitement to violence or hatred directed to groups or individuals on the basis of characteristics such as race, color, religion, or national origin. Companies must review such content within 24 hours of being notified and remove it if necessary, while respecting the right of freedom of speech. The EC's latest review found that around 89 percent of notifications are assessed within 24 hours. On average, the companies are taking down nearly 72 percent of hate speech notified to them, and they're consistently and scrupulously gauging whether content falls within that category, it said. One area needs more work, the report found: information users are given on what happens to their notices of illegal hate speech. Facebook is "the only platform that provides systematic feedback to all users while the other platforms do not yet reach these levels," it said. Twitter is reviewing 88 percent of all notifications within 24 hours, emailed Director-Public Policy for Europe Karen White: The company has boosted its safety policies, tightened reporting systems and "introduced over 70 changes to improve conversational health." Twitter is "doing this with a sense of urgency," she added. "There is always more we can do to tackle hate speech." Facebook and Instagram are "delighted" to be part of the code of conduct, a Facebook spokesperson emailed.

The Electronic Privacy Information Center sued Customs and Border Protection Friday for audit records on electronic device border searches. The lawsuit follows EPIC’s Freedom of Information Act request, filed about two months ago, seeking records to determine the legality of border searches of cellphones, tablets and laptops. The group cited a January 2018 CBP directive requiring agency audits of border searches. CBP failed to make a timely decision on the FOIA request, said the suit in U.S. District Court in Washington. The agency didn’t comment.

The ICANN board approved for another 90 days a temporary generic top-level domain specification for handling the personal data of domain name registrants under the EU's general data protection regulation, the organization said. The gTLD temporary spec was approved in May and reaffirmed about every three months after. It sets interim requirements for complying "with existing ICANN contractual requirements and community-developed policies" for GDPR, noted an ICANN email. The board can continue renewals for a year. Earlier Wednesday, a Brussels conference heard about non-domain name GDPR challenges and hopes (see 1901300007). An ICANN committee developing policy for GDPR compliance expects its final report in early February (see 1901250003).

CTA agrees with the Congressional Budget Office “assessment” that tariffs on Chinese imports are taxes on U.S. consumers and businesses, but CBO underestimated damage the higher duties will inflict on the tech sector and U.S. economy, emailed Sage Chandler, vice president-international trade policy. CBO estimated the higher import tariffs will reduce U.S. GDP by roughly 0.1 percent yearly through 2029 (see 1901290001). “The U.S. tech industry alone is paying $1 billion a month on tariffs,” said Chandler Tuesday. “Potential short- and mid-term impact of tariffs could be more destabilizing than indicated by CBO’s analysis. Not only do tariffs increase costs for American business and slow U.S. economic growth, real potential exists -- and warning signs are already evident -- that destabilizing global supply chains may have detrimental effects that spill in to global equity markets.” CBO didn’t comment Wednesday.

China is “highly concerned” about DOJ’s 13-count indictment against Huawei and Chief Financial Officer Meng Wanzhou on bank fraud, obstruction of justice and other allegations (see 1901280052), said a Foreign Ministry spokesperson Tuesday. Meanwhile, legislators ramped up scrutiny. The U.S. uses its “national power” to “tarnish and crack down on specific Chinese companies in an attempt to strangle their lawful and legitimate operations,” said China's spokesperson. “Behind such practices are deep political intentions and manipulations.” In detaining Meng in Vancouver in early December, the U.S. and Canada “abused their bilateral extradition agreement and took compulsory measures against a Chinese citizen for no reason,” the spokesperson said. The U.S. should “immediately withdraw” Meng’s arrest warrant, “refrain from making a formal extradition request, and stop going further down the wrong path,” he said. Senate Commerce Committee Chairman Roger Wicker, R-Miss., pressed national security officials during Tuesday's Senate Armed Services Committee hearing about Huawei and ZTE's national security threat. Wicker earlier praised the indictments. Commerce is “taking a hard look" at Huawei given its “activities and impact on developing technologies, such as 5G and autonomous vehicles, as well as network security and consumer data protection,” he said. Intelligence Committee Chairman Richard Burr, R-N.C., welcomed the indictments, “which detail the company’s brazen efforts to steal corporate trade secrets, commit fraud, and obstruct justice.” Vice Chairman Mark Warner, D-Va., said it's a “reminder that we need to take seriously the risks of doing business with companies like Huawei and allowing them access to our markets, and I will continue to strongly urge our ally Canada to reconsider Huawei’s inclusion in any aspect of its 5G infrastructure.” Commerce Security Subcommittee Chairman Dan Sullivan, R-Alaska, tweeted the indictments show "just one more example of Chinese businesses unwilling to play by the rules." The panel "will be conducting serious oversight of these Chinese threats to the U.S. economy," he said.