The American Music Fairness Act (“AMFA”) has been re-introduced in the Senate for this Congress. Sen. Padilla (D-CA) introduced the bill (S.253) earlier this month, along with Sens. Blackburn (R-TN), Tillis (R-NC), and Feinstein (D-CA). The bill was referred to the Judiciary Committee, on which every cosponsor serves. Further, Sen. Tillis serves as
Senate Judiciary Committee Holds Hearing on Children’s Online Safety
On Tuesday, February 14, 2023, the Senate Judiciary Committee held a hearing titled “Protecting Our Children Online.” The witnesses included only consumer advocates, and no industry representatives. As Committee Chair, however, Senator Durbin (D-IL) indicated that he plans to hold another hearing featuring representatives from technology companies.
The key takeaway was that there continues to be strong bipartisan support for passing legislation that addresses privacy and online safety for minors. Both Senator Durbin and Senator Graham (R-SC), the Committee’s Ranking Member, were in agreement that the Committee will mark up relevant legislation, which could happen within the next six months—making the next couple months particularly important for negotiations. Notably, all of the previously introduced legislation that was discussed had passed at least its respective Senate Committee last Congress.
Senators focused on four bills that could be included as part of a legislative package:
- Kids Online Safety Act (KOSA) (to be reintroduced). KOSA would apply to “covered platforms,” which the previous bill defined as a “commercial software application or electronic service that connects to the internet and that is used, or is reasonably likely to be used, by a minor.” Among other things, KOSA would impose a duty of care on covered platforms that would require them to “prevent and mitigate the heightened risks of physical, emotional, developmental, or material harms to minors posed by materials” on the platform.
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U.S. AI, IoT, CAV, and Privacy Legislative Update – Fourth Quarter 2022
This quarterly update summarizes key legislative and regulatory developments in the fourth quarter of 2022 related to Artificial Intelligence (“AI”), the Internet of Things (“IoT”), connected and autonomous vehicles (“CAVs”), and data privacy and cybersecurity.
Artificial Intelligence
In the last quarter of 2022, the annual National Defense Authorization Act (“NDAA”), which contained AI-related provisions, was enacted into law. The NDAA creates a pilot program to demonstrate use cases for AI in government. Specifically, the Director of the Office of Management and Budget (“Director of OMB”) must identify four new use cases for the application of AI-enabled systems to support modernization initiatives that require “linking multiple siloed internal and external data sources.” The pilot program is also meant to enable agencies to demonstrate the circumstances under which AI can be used to modernize agency operations and “leverage commercially available artificial intelligence technologies that (i) operate in secure cloud environments that can deploy rapidly without the need to replace operating systems; and (ii) do not require extensive staff or training to build.” Finally, the pilot program prioritizes use cases where AI can drive “agency productivity in predictive supply chain and logistics,” such as predictive food demand and optimized supply, predictive medical supplies and equipment demand, predictive logistics for disaster recovery, preparedness and response.
At the state level, in late 2022, there were also efforts to advance requirements for AI used to make certain types of decisions under comprehensive privacy frameworks. The Colorado Privacy Act draft rules were updated to clarify the circumstances that require controllers to provide an opt-out right for the use of automated decision-making and requirements for assessments of profiling decisions. In California, although the California Consumer Privacy Act draft regulations do not yet cover automated decision-making, the California Privacy Protection Agency rules subcommittee provided a sample list of related questions concerning this during its December 16, 2022 board meeting.
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CONGRESS TO MARK UP THE AMERICAN MUSIC FAIRNESS ACT
Today, the American Music Fairness Act (“AMFA”) will take a step forward as the bill is set for mark up with the House Judiciary Committee. The Copyright Act provides exclusive rights to publicly perform sound recordings by means of digital audio transmissions (e.g., internet and satellite), and AMFA is the latest attempt to extend such rights to analog audio transmissions (e.g., terrestrial radio).
Marking up the bill at this late stage of the Congressional term may mean the bill is tacked on to end-of-year spending packages (as with the CASE Act in 2020), or more likely that it will be taken up again next Congress. With bipartisan and bicameral support of members on the relevant Committees of jurisdiction, AMFA could still move in a divided Congress, making it all the more important for stakeholders to engage now if they want to support or make changes to the bill.
The AMFA Bill
The bipartisan AMFA bill was first introduced in the House on June 24, 2021 (H.R.4130), and its companion Senate bill followed on September 22, 2022 (S.4932). Rep. Jerry Nadler (D-NY) recently became the House bill’s primary sponsor after its original sponsor Rep. Ted Deutch (D-CA) left Congress.
The bill would amend Section 106(6) of the Copyright Act, which provides the exclusive right to publicly perform sound recordings via “digital audio transmission,” by deleting the word “digital.” AMFA also attempts to address some criticisms that faced similar predecessor bills. For example, AMFA proposes low flat fees for certain nonsubscription broadcast transmissions by public or smaller commercial stations, and other fees would be set in rate-setting proceedings before the Copyright Royalty Board. Such rate-setting proceedings would take account of economic, competitive, and programming information, and whether transmissions substitute for or promote record sales, and interfere with or enhance other revenue streams for sound recording owners.
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Governing the Senate in the 118th Congress
Public Policy
With Senate Democrats having secured the 50th vote needed to maintain control of the Senate, both parties are eagerly awaiting the results of the Georgia runoff on December 6 between Democratic Senator Raphael Warnock (D-GA) and Republican candidate Herschel Walker. If Walker wins, the Senate will be split 50-50. The implications of a 51–49 Democratic majority versus a 50–50 Democratic majority are significant.
An Equally Divided Senate
Since February 3, 2021, the Senate has operated under an organizing resolution negotiated by Majority Leader Chuck Schumer (D-NY) and Minority Leader Mitch McConnell (R-KY). The organizing resolution formalized a power-sharing agreement for the 117th Congress and was largely modeled on the 2001 power-sharing agreement reached by then-Democratic leader Tom Daschle (D-SD) and then-Republican leader Trent Lott (R-MS) following the November 2000 elections that resulted in a 50–50 Senate split for the 107th Congress. The 2021 power-sharing agreement laid out internal rules of the Senate, apportioned the makeup and control of committees, and prescribed procedures for the control of Senate business. Specifically, the 2021 power-sharing agreement provides that:
- Senate committees be equally balanced with members of both parties;
- The majority and minority on each committee have equal budgets and office space;
- If a subcommittee vote is tied on either legislation or a nomination, the committee chair may discharge the matter and place it on the full committee’s agenda;
- If a committee vote is tied, the Majority or Minority Leader may offer a motion to discharge the measure from committee, subject to a vote by the full Senate;
- Debate may not be cut off for the first 12 hours; and
- It is the “sense of the Senate” that both Majority and Minority leaders “shall seek to attain an equal balance of the interests of the two parties” when scheduling and debating legislative and executive business.
Midterm Elections: Democratic Reaction
Immediate Reaction
With Republicans only holding a slim majority in the House and the Democrats keeping their majority in the Senate, there is almost universal agreement that President Biden and the Democratic Party as a whole have outperformed expectations. The President and the White House surely view these results as validation of his approach, his agenda, and his work so far. A key part of this, which is at the core of his unity agenda and something he reiterated in his speech following this election, is his long-standing commitment to reaching across the aisle. We can therefore expect the Administration to continue to seek out opportunities to work with Republicans, particularly in areas that garner bipartisan attention such as technology, children, and veterans. We can also expect judicial nominations to remain a priority, both in the lame duck and in the next Congress, and for the President to continue advancing his agenda by taking Executive action when legally able.
Meanwhile, agencies will continue their work implementing key laws passed by this Congress—including the Bipartisan Infrastructure Law, the Inflation Reduction Act, and the PACT Act—at the same time that they look for new ways to implement the President’s agenda through rulemaking and enforcement. In particular, it seems likely that the Federal Trade Commission and the Justice Department’s Antitrust Division will become even more active consistent with the Administration’s larger competition agenda.
A key question moving into the next Congress is how those agency actions will interact with the strain of populism that partially animates efforts in both parties to regulate “Big Tech.” The push to move certain antitrust legislation during the lame duck is unlikely to materialize; instead, it is likely to morph in the next Congress into a focus on content moderation and amending Section 230 of the Communications Decency Act. Other priorities—like privacy and child protection, including bills like the Kids Online Safety Act—will almost certainly remain at the top of next year’s agenda if they do not pass as part of a larger spending bill this Congress.
U.S. House of Representatives Passes Antitrust Legislative Package
On September 29, 2022, the U.S. House of Representatives passed a package of three antitrust bills (H.R. 3843) by a vote of 242-184. The package includes: (1) the Merger Filing Fee Modernization Act; (2) the Foreign Merger Subsidy Disclosure Act; and (3) the State Antitrust Enforcement Venue Act.
The Merger Filing Fee Modernization Act updates the structure and amounts of premerger filing fees that the Federal Trade Commission (“FTC”) and Department of Justice (“DOJ”) collect pursuant to the Hart-Scott Rodino Antitrust Improvement Act of 1976. The Merger Filing Fee Modernization Act reduces fees for smaller transactions, increases fees for mergers valued at $1 billion or greater, and adjusts the filing fee amounts for each future year based on changes in the Consumer Price Index. Finally, the bill requires the FTC and DOJ to report each year on the total revenue generated from premerger notification filing fees, broken out by tier, and the FTC must also include in the report a list of all actions the agency took or declined to take based on a 3-to-2 vote.
The Foreign Merger Subsidy Disclosure Act requires parties submitting premerger notifications to disclose detailed information on subsidies from a “foreign entity of concern.” A foreign entity of concern is defined under 42 U.S.C. § 18741(a) and includes those designated foreign terrorist organizations, on the Specially Designated and Blocked Persons List, and alleged to be involved in espionage or unauthorized conduct detrimental to the national security or foreign policy of the United States. The definition further covers entities owned by, controlled by, or subject to the direction of the governments of the Democratic People’s Republic of North Korea, the People’s Republic of China, the Russian Federation, or the Islamic Republic of Iran.
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Supreme Court Grants Certiorari in Gonzalez v. Google, Marking First Time Court Will Review Section 230
On Monday, the Supreme Court granted certiorari in Gonzalez v. Google LLC, 2 F.4th 871 (9th Cir. 2021) on the following question presented: “Does section 230(c)(1) immunize interactive computer services when they make targeted recommendations of information provided by another information content provider, or only limit the liability of interactive computer services when they
Fifth Circuit Upholds Texas Law Restricting Online “Censorship”
By Terrell McSweeny, Megan Crowley, Nicholas Xenakis, Alexandra Cooper-Ponte & Madeline Salinas on September 28, 2022
On September 16, the Fifth Circuit issued its decision in NetChoice L.L.C. v. Paxton, upholding Texas HB 20, a law that limits the ability of large social media platforms to moderate content and imposes various disclosure
ARTIFICIAL INTELLIGENCE AND ALGORITHMS IN THE NEXT CONGRESS
Policymakers and candidates of both parties have increased their focus on how technology is changing society, including by blaming platforms and other participants in the tech ecosystem for a range of social ills even while recognizing them as significant contributors to U.S. economic success globally. Republicans and Democrats have significant interparty—and intraparty—differences in the form of their grievances and on many of the remedial measures to combat the purported harms. Nonetheless, the growing inclination to do more on tech has apparently driven one key congressional committee to have compromised on previously intractable issues involving data privacy. Rules around the use of algorithms and artificial intelligence, which have attracted numerous legislative proposals in recent years, may be the next area of convergence.
While influential members of both parties have pointed to the promise and peril of the increasing role of algorithms and artificial intelligence in American life, they have tended to raise different concerns. Legislative proposals from Democrats have frequently focused how deployment of algorithms and artificial intelligence affects protected classes, while Republican proposals have largely, but not exclusively, been aimed at perceived unfairness in how algorithms treat Republicans and those expressing conservative views. For instance, Republican Whip John Thune (R-SD), the former chair of the Senate Committee on Commerce, Science, and Transportation, has sponsored the Political BIAS Emails Act (S. 4409), which would address technology companies reportedly filtering Republican campaign emails. Meanwhile, Senator Ron Wyden (D-OR) introduced the Algorithmic Accountability Act (S. 3572) that, among other things, requires that “automated decision systems” be subject to an “evaluation of any differential performance associated with consumers’ race, color, sex, gender, age, disability, religion, family status, socioeconomic status, or veteran status.”
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