By BRENDAN BORDELON
With help from Leah Nylen, Rebecca Kern and John Hendel
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QUICK FIX
— Block this chain: Progressives are pressing House Financial Services Chair Maxine Waters (D-Calif.) to probe Google’s blockchain and cryptocurrency plans.
— The ultimate arbiter: The House voted to ban forced arbitration of some lawsuits outside of a courtroom, which would deprive tech companies of one of their favorite tools.
— Very online: Kids ages 8 through 12 technically aren’t allowed on most tech platforms, but a new survey suggests they’re using social media at higher rates than ever.
IT’S FRIDAY, MARCH 18. Welcome to Morning Tech! In the spirit of both journalistic camaraderie and, of course, St. Patrick’s Day, I’m very much hoping these two meet up. Just another day in Paris-on-the-Potomac...
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Tech of the Town
FIRST IN MT: WATERS URGED TO INVESTIGATE GOOGLE’S BLOCKCHAIN PLANS: A group of progressive advocates are pushing Maxine Waters (D-Calif.), the head of the House Financial Services Committee, to hold a hearing on Google’s nascent “digital assets” programs.
In a letter being sent this morning, the groups — which include Demand Progress, Public Citizen and the Open Markets Institute — call on Waters to scrutinize the company’s effort as carefully as she did Facebook’s abortive foray into the digital currency ecosystem.
“Without ongoing vigilance and response from policymakers, dominant market entrants like Google ... may succeed in taking advantage of existing policy and regulatory gaps,” the groups write.
— Always an antitrust angle: The progressive groups cite Google’s alleged “monopolistic behavior” as reason enough to hold a hearing that would force it to explain its intentions, arguing the company may use “cryptocurrency ventures” to “further entrench its market dominance.”
The letter also raises concerns around privacy and the spread of disinformation on Google-owned platforms, claiming a “merger of Big Tech and financial services via the promulgation of a new cryptocurrency could ... accelerate these trends.”
A Waters spokesperson did not immediately respond when asked whether the Financial Services chair plans to scrutinize Google’s blockchain efforts.
— No crypto here: A Google representative familiar with the company’s plans, who requested anonymity to discuss non-public information, said Google has no plans “at this time” to develop its own digital currency.
“That is not what is going on with this digital assets announcement,” the person said, citing a proposal published by the company in late January. The Google representative said the company is instead looking to create a broader blockchain infrastructure that could be used by a wide variety of cryptocurrencies and other digital assets, and stressed that Google doesn’t “want to take sides in backing any specific currency.”
— Turn out your pockets: If Google keeps to that strategy, it may avoid the kind of intense congressional scrutiny that befell Meta (then Facebook) when it announced its direct entry into the digital assets market in 2019. Mark Zuckberg testified in support of the Libra stablecoin project in a hearing Waters convened later that year — but it wasn’t enough to convince her or many other lawmakers, who questioned the idea that the company, by then already dealing with fallout from the Cambridge Analytica scandal, was in a position to create its own digital currency. Facebook rebranded the project to Diem before shelving it permanently earlier this year.
But Google’s apparent plans to own or operate the underlying infrastructure behind all manner of digital currencies could still give lawmakers like Waters pause, particularly given the company’s large market share in search and other crucial tech sectors.
HOUSE PASSES BILL TO BAN ANTITRUST ARBITRATION — The House voted 222-209 on Thursday in favor of a bill that would bar companies from requiring customers or employees to litigate antitrust disputes privately instead of in a courtroom — a stipulation Amazon and Uber use frequently to avoid dealing with federal lawsuits.
In addition to antitrust, the Forced Arbitration Injustice Repeal Act (H.R. 963) would also bar companies from requiring arbitration for employment, consumer or civil rights disputes. The Supreme Court ruled in 2013 that companies can require consumers or users to decide antitrust claims through arbitration, a decision the bill would overturn.
— An industry favorite: Last summer Amazon changed its policies to end the use of forced arbitration for consumer complaints, after 75,000 claims were filed against the company alleging that its Echo speakers spied on them without consent.
But the company still requires third-party sellers on its marketplace to arbitrate claims. One Amazon seller told lawmakers the company’s use of forced arbitration is a “lose/lose situation” for those who want to fight the company’s practices, since sellers must pay large sums of money upfront and are forbidden to band together.
Uber also requires drivers and consumers to arbitrate claims. In 2015, forced arbitration helped it beat back a class-action antitrust suit that alleged the company’s “surge pricing” algorithm amounted to illegal price-fixing. The company also won several decisions in the past year requiring drivers to arbitrate claims for minimum wages, overtime and paid sick leave.
— Not the first time: Lawmakers separately banned forced arbitration in cases of sexual harassment earlier this year — a turn of events already likely to alter how Silicon Valley handles legal disputes in significant ways. In addition to antitrust, the House bill would make it harder for tech companies to shunt aside civil rights cases through arbitration (at least, for those companies who haven’t already ended the practice).
TWEEN APP USAGE ON THE RISE: The amount of time tweens and teens spent on social media apps has increased substantially over the last several years, according to a new study from childrens’ advocacy group Common Sense Media, which shared a preview of its findings with MT ahead of a report it plans to release next Wednesday.
The new data comes as the White House and Congress each pursue efforts to protect kids online, including through bans on targeted advertising to kids and updates to a childrens’ online privacy law.
“These platforms weren’t designed with children in mind,” said Michael Robb, the senior director of research at Common Sense. Robb said the group’s findings reinforce the importance of regulating tech companies like Facebook and Instagram, particularly when it comes to minors.
— Upticks all around: In the fall of last year, Common Sense conducted an online survey of more than 1,300 kids from ages 8 to 18. After comparing its findings with similar data it collected in 2019, the group found tweens’ (aged 8-12) use of social media apps (including Instagram, Facebook, Snapchat, Discord and Reddit) increased from 31 percent to 38 percent during that time period, which coincided with a significant swath of the pandemic. The average daily time spent by tweens on social media platforms also increased, from 10 minutes in 2019 to 18 minutes in 2021.
— What tweens? The terms of service for Snapchat, Instagram, Facebook, Discord and Reddit all do not allow kids under the age of 13 to use their products. Snap and Meta both say they remove these accounts from Snapchat and Facebook and Instagram, respectively, when found. A Discord spokesperson said it blocks accounts immediately upon finding out users are under the minimum age, and maintains the block until it can verify the user is 13 or older. Reddit didn’t immediately respond to questions regarding how the platform handles accounts registered or used regularly by children under 13.
Robb said the companies need to better police their apps’ usage by children. He also dismissed this week’s announcement by Meta that it has created new parental controls and educational tools for Instagram. Robb said that effort doesn’t absolve the company’s responsibility to make their platforms safer for kids.
“They're still being exposed to harmful content that's being amplified by the algorithms on those platforms,” said Robb. “Educational resources aren't going to resolve that.”
— California steps up: With Congress facing a massive to-do list and limited time left on the congressional calendar, it’s possible some states may move to curtail the misuse of social media before Washington. On Tuesday, lawmakers in California introduced bipartisan legislation that would hold social media companies legally liable for features and apps that are found to be “addictive” to children.
SENATE CLEARS ‘SAFE CONNECTIONS’ TELECOM BILL — Capitol Hill had an unusually productive Thursday on telecom, with the Senate unanimously green-lighting the Safe Connections Act (S. 120) before it adjourned. The bill — which aims to free survivors of domestic violence from shared wireless plans with their abusers — has been mired in extensive negotiation (amid reported complaints from wireless carriers) for more than a year.
— And yet: It’s not yet clear how the House, where lawmakers just introduced a companion, may proceed. Verizon, AT&T, T-Mobile and industry group CTIA all expressed support following Thursday’s Senate passage. That suggests the industry’s concerns may’ve been assuaged, although the office of sponsor Sen. Brian Schatz (D-Hawaii) tells MT there were no major changes. (Here’s the final bill text).
— Speaking of bipartisan telecom bills: Several House lawmakers also just filed legislation intended to bolster resources supporting the launch of the 988 suicide hotline dialing shortcode, set for July.
Transitions
Caitlin Chin is a new technology regulation fellow at the Center for Strategic and International Studies. She was previously a Research Analyst at the Brookings Institution.
Silicon Valley Must-Reads
You get a subpoena, you get a subpoena! Meta is seeking “millions” of confidential documents from other tech companies in its bid to fend off the Federal Trade Commission’s antitrust suit, according to Protocol.
Taking a big bite: The EU’s Digital Markets Act is perhaps the greatest challenge Apple has yet faced to the tight control it holds over its App Store, the Wall Street Journal reports.
Quick Downloads
One minor quibble: Cryptocurrency advocates claim Sen. Elizabeth Warren’s (D-Mass.) new bill to enforce U.S. sanctions in the global crypto industry is unconstitutional, Vice’s Motherboard reports.
Undercut: Regina Cobb, a Republican state representative from Arizona, writes in The Hill that the tech lobby turned former allies in the statehouse against her bill to regulate app stores.
Tips, comments, suggestions? Send them along via email to our team: Heidi Vogt ([email protected]), Konstantin Kakaes ([email protected]), Emily Birnbaum ([email protected]), Brendan Bordelon ([email protected]), John Hendel ([email protected]), Rebecca Kern ([email protected]) and Leah Nylen ([email protected]). Got an event for our calendar? Send details to [email protected]opro.com. And don't forget: Add @MorningTech and @POLITICOPro on Twitter.
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