Hey What’s Next readers, welcome to another edition. There’s more big news out of Europe this week—no, not about the GDPR—and we take a look at how law firms fared in the lead-up to the official death of net neutrality. Plus, news from crypto land … and Newark, N.J., of all places.
Next week is the start of summer, and your correspondent is going to be taking some time off. But never fear! My colleague Ian Lopez, senior technology editor at Law.com, will take the reins in my stead for the next four weeks and continue to keep you up-to-date.
Watch This Space: Our Filtered Future?
Many companies (and firms) are no doubt still reeling over the European Union’s newly effective GDPR. But hold onto your seat: The EU is now setting in motion yet another law—this one on copyright—that could shake up the future of the internet.
You might recall me writing last fall about a push by the European Commission to get internet platforms to adopt automatic filtering technology. That was just a concept paper, not a formal policy proposal, and it was mainly aimed at removing content related to terrorism. But the commission also had its eye on IP-infringing content.And that’s exactly the target of “Article 13” in the new EU Copyright Directive, which is headed for a crucial vote next week.
As the Electronic Frontier Foundation explained in a blog post Tuesday, the provision would require all user content platforms that serve European users to adopt automatic filtering technologies to catch infringing content. Ars Technica notes there are efforts to create carve-outs for smaller companies and certain platforms, but that they face challenges. The problem, the group says, is that filtering technology is far from perfect and will inevitably block legitimate content. The requirement is also onerous for growing platforms, it adds:
“Although this will pose little impediment to the largest platforms such as YouTube, which already uses its Content ID system to filter content, the law will create an expensive barrier to entry for smaller platforms and startups, which may choose to establish or move their operations overseas in order to avoid the European law.”
The impact could be massive, affecting everything from Twitter memes to software source code. And it’s not just the EFF that’s worried. More than 70 tech and internet advocates—including big names like Jimmy Wales, the co-founder of Wikimedia, Tim Wu of Columbia Law School, and Python programming language creator Guido van Rossum—signed an open letter to the president of the European Parliament urging it to reconsider Article 13.
Daphne Keller, a former in-house lawyer at Google and director of intermediary liability at the Stanford Center for Internet & Society, had this to say about Article 13 on Twitter late last month:
>> Think Ahead: Article 13 isn’t a done deal yet. After a vote by the European Parliament panel—expected by June 21—the legislation will move to the full legislature, and then to negotiations with the other EU institutions. Stay tuned. Photo: European Parliament in Brussels, Belgium. Alexandra Lande/Shutterstock.com
Net Neutrality’s Expensive Death (and Afterlife)
OK, Net Neutrality is officially over; Ajit Pai has declared it so. In a contributed article on CNET on Monday, the FCC commissioner basically argues that doing away with the rules is the best thing to happen to the internet since … well, the internet. “Our framework will protect consumers and promote better, faster internet access and more competition,” he wrote.
He didn’t mention the not-insignificant sums of money that were spent lobbying on the issue last year. Lucky for you, my colleague MP McQueen pulled the numbers to show which organizations and companies were the biggest spenders—and which law firms benefited.
About 18 telecommunications companies, trade and conservative advocacy groups spent at least $110 million in 2017 in lobbying aimed at overturning net neutrality, MP writes, citing a review of federal lobbying records from the U.S. House of Representatives and the U.S. Senate, compiled and analyzed by OpenSecrets.org.On the other side, groups trying to preserve net neutrality spent about two-thirds less—or $39 million.
The primary telecom trade group, the Internet and Television Association (NCTA), spent $4.3 million just in the final quarter of last year lobbying, including on the FCC proposal. The bulk of that cash went to Mintz Levin Cohn Ferris Glovsky and Popeo, and Brownstein Hyatt Farber Schreck, which each were paid about a half-million lobbying for the industry group during that time, according to public filings. Williams & Jensen and Akin Gump Strauss Hauer & Feld were paid $280,000 and $200,000.
There is likely plenty more work for law firms left do, on both sides. As I’ve mentioned here before, states have been pushing back with new pro-neutrality rules—even in the face of litigation threats from the telecom and cable industry. Washington state is currently the only one with a law on the books. Oregon has a law coming into effect later this year. California is considering a sweeping proposal that, because of its size, could reset the national standard.
>> Think Ahead: Is Pai keeping his powder dry as he watches the states undo his work? Marc Martin, a telecom lawyer for Perkins Coie, told The Verge last week that the FCC “might be waiting for someone else to take an action, like a broadband provider who might want to challenge Washington state.”
Protocol: 2 Crypto Things to Know
1. Blockchain startup Tezos is embracing “know-your-customer” regulations. Some folks who contributed to its blockbuster initial coin offering are less than thrilled.
• I’ve been following the legal trials and tribulations of Tezos, the upstart blockchain project that’s facing civil securities litigation (in two separate forums). Now, it’s informed the community of people who contributed to its $232 million ICO that they will have to reveal their identities to get their tokens.
• As Bitcoinist reports, Tezos co-founder Arthur Breitman (who’s often characterized as a “crypto-anarchist”) faced blowback on social media. Breitman said the decision to comply with know-your-customer and anti-money laundering rules was “Not my call.”
>> Takeaway: It’s another sign that the “Wild West” of the digital asset world is getting roped in by regulators. The fact that Tezos is now being advised by at least two different law firms as part of the securities litigation probably had something to do with this as well.
2. The cryptocurrency markets are sinking. Will more litigation follow?
• More than $42 billion (!) in value has been erased from the global cryptocurrency, Bloomberg reports, in what some analysts see at least in part as a reaction to the hack of an exchange in South Korea. The country has been one of the leading markets for crypto.
• The hack of Coinrail, Bloomberg notes, appears smaller than the $530 million heist from a cryptocurrency exchange in Japan earlier this year. But it may be buffeting overall confidence in in digital currencies as an investment—just months after Bitcoin neared $20,000 per coin.
>> Think Ahead: The common wisdom is that economic downturns are good for litigation. Does the same hold true in crypto? At least one exchange, Kraken, has been sued over allegedly substandard security practices. I can’t help but wonder if more investor suits are coming.
Dose of Dystopia
OK, so maybe Newark, N.J., wasn’t exactly utopia to begin with. (Sorry, New Jerseyans!) But it seems to have taken a distinctly dystopian turn with this latest development in policing strategy: letting anyone on the internet become an extra pair of police eyes.
As The New York Times reports, Newark’s police department has “opened up feeds from dozens of closed-circuit cameras to the public, asking viewers to assist the force by watching over the city and reporting anything suspicious.” It’s being dubbed the “Citizen Virtual Patrol.”
If your first thought about that was, “Wow, that seems really dangerous”—well, you’re not alone. The Times notes that critics have said it could become a tool for burglars and would-be stalkers. Civil liberties advocates, as you might expect, are especially wary of the idea of giving powerful surveillance tools to untrained civilians, who may be biased, consciously or unconsciously.
“It’s not just Big Brother,” Amol Sinha, executive director of the American Civil Liberties Union of New Jersey, told the paper. “There’s an infinite number of siblings here.”
That’s all for this week! See you in the future!