Executive Briefing April 6

SPECIAL SECTION: VFI Featured on “Ultimate Guide to Partnering” Podcast

I wanted to encourage you to take a listen to the podcast. Hosted by Vince Menzione, the podcast features VFI leader Carol-Lynn Grow and Microsoft Senior Manager, Global Government Affairs Owen Larter discussing public policy issues and how to get involved with VFI. Please promote it to your networks!

Thank you!

A Unique Episode Focused on How Technology Leaders Can be a “Force for Good”.

If you’ve been paying attention to recent headlines as I have, I’m sure you’ve become increasingly concerned by some dark clouds that shed a negative light on technology’s unintended consequences and misuse to enable malicious behavior, cyber terrorism, and cybercrime. The New York Times recently referred to the current time as a “Second Inning“.

We in technology have the opportunity to be a force for good and drive a set of objectives around a cloud that is trusted, responsible and inclusive.

TOP QUOTES

“Because Microsoft has thus far refused to comply with the original warrant… the government has determined that the most efficient means of acquiring the information sought is through a new warrant under the CLOUD Act.”

– Filing by U.S. Solicitor General Noel Francisco

“Microsoft has argued from the beginning of this case that Congress is the proper branch to update the Electronic Communications Privacy Act of 1986. With the CLOUD Act, Congress has now enacted a nuanced legislative scheme that both creates a modern legal framework for law-enforcement access to data across borders and expressly incentivizes the negotiation of new international agreements that balance legitimate law-enforcement interests, individual privacy rights, and foreign sovereignty.”

– Microsoft filing with the U.S. Supreme Court

HILL UPDATE

WIRED The Question Only Mark Zuckerberg Can Answer Before Congress

Following the weeks of public and Congressional pressure, Facebook CEO Mark Zuckerberg has agreed to testify at two Congressional hearings next week. The decision marks a shift for Zuckerberg, who just last month suggested that the company’s engineers and lawyers were better-equipped to answer Congress’s detailed questions. What Zuckerberg seemed to miss when he gave that excuse—and what he now has an opportunity to address—is that the problems plaguing Facebook have far less to do with the company’s technical flaws than with its fundamental ethos.

ARTICLE SUMMARY

LA Times Facebook finally steps up on privacy. Now it’s Congress’s turn

As bad as things looked for Facebook two weeks ago when the Cambridge Analytica scandal surfaced, things actually got worse this week. First, the company upped to 87 million the estimated number of people whose personal information was siphoned off without authorization — 74% more than was first reported. Cambridge Analytica used that information in 2016 to try to raise support for Donald Trump by targeting voters with messages designed to play to their susceptibilities.

GeekWire Microsoft vows to cede patent rights to customers for jointly developed technology

Microsoft, which has spent decades building its intellectual property war chest, says it will give ownership of patent and industrial design rights to its customers when the companies develop technology together. Under new guidelines issued Wednesday night, the Redmond tech giant will reserve the right to license back the patent rights for jointly developed technologies from its customers, but says it will limit its use of the licenses in those cases to improving its own platform, not using them to offer competing products.

The Hill Overwhelmed by data, it’s time for Congress to have a digital support team

Today there’s another part of our government in massive need of modernization. It is central to the functioning of our democracy, but it often stops working. You could even say it crashes routinely. It is too big to fail, but somehow it never gets in the crosshairs of a tech and data driven modernization strategy: The U.S. Congress.

NYT Facebook Is Not the Problem. Lax Privacy Rules Are.

As recently as 2010, Mark Zuckerberg, the founder and chief executive of Facebook, believed that privacy was no longer a “social norm.” But over the past few weeks — and not a moment too soon — he and his colleagues have learned that privacy still matters to individuals and society.

Forbes Better Immigration Policies Would Help U.S. Tech Companies

Donald Trump recently declared that $60 billion in new tariffs against China would help U.S. technology companies preserve their intellectual property. Trade experts doubt compelling Americans to pay more for products imported from China will solve any problems. However, if the Trump administration wants to help U.S. tech companies, the solution isn’t to impose tariffs on Chinese imports but to enact better immigration policies. For a U.S. technology company – and, really, almost any company today – the most important input is human capital. When companies make decisions on where to invest resources, the ability to hire a sufficient number of qualified workers in that location is paramount.

Forbes If Trump Declares War On Amazon, Consumers Will Be Among The Casualties

First there were the Robber Barrons — John Jacob Astor, Andrew Carnegie, JP Morgan, John D. Rockefeller, Cornelius Vanderbilt and more — whom President Theodore Roosevelt took on, busting their trusts. Now another activist president, Donald Trump, wants to add Jeff Bezos to that list. Times have changed, and societal problems are different, but what hasn’t changed is the righteous indignation presidents feel against their foes. Back in TR’s day — apparently no one who knew him called him “Teddy” — Roosevelt took an axe to monopoly trusts for anti-competitive actions that drove up prices.

Washington Post Trump seeks additional tariffs on $100 billion of Chinese goods in escalation of trade confrontation

President Trump ordered his chief trade negotiator to consider imposing tariffs on an additional $100 billion of Chinese products Thursday, in a dramatic escalation of his trade war with China.

THINK TANK/TECH TRADE ASSOCIATION HIGHLIGHTS

American Enterprise Institute (AEI)

Blog post on the CLOUD Act: Visiting fellow Shane Tews wrote that the CLOUD Act “should help resolve some of the challenges brought about by cross-border data flows.” She added, “The Cloud Act allows governments to develop a clear framework to manage digital evidence for investigative demands while removing conflicts of law and privacy standards. This law is a first step toward harmonizing privacy laws that can be applied across borders that incentivize clear and accountable privacy, civil liberties, and human rights protections.” (AEI BLOG – Implications of the Cloud Act for the future of data, By Shane Tews, April 5, 2018)
Op-ed on DACA: “Obama’s executive action on DACA was far more limited than what Trump proposed for dreamers, offering no path to citizenship or even permanent legal residency. It simply shielded the dreamers from deportation, allowing them to remain in the United States to work and study,” according to resident fellow Marc A. Thiessen. He added, “Codifying the order would indefinitely remove the threat of deportation for DACA recipients. It would get Trump the wall funding he so desperately wants. And it would save making a deal to provide a path to citizenship in exchange for reforms to our legal immigration system for another day.” (THE WASHINGTON POST – Trump tried going big on DACA. Now he should go small., By Marc Thiessen, April 5, 2018)
Blog post on the digital economy: “A new report from the Bureau of Economic Analysis (BEA) confirms what we see with our own eyes: a huge difference between technology and other sectors of the economy,” visiting fellow Bret Swanson wrote. “Almost by definition, the data and tools we use to measure the economy can never keep up with changes in the economy itself. In ‘Defining and measuring the digital economy,’ however, BEA makes good progress toward better understanding these unique industries.” (AEI BLOG – How to measure the digital economy — and close the massive information gap, By Bret Swanson, April 3, 2018)

Aspen Institute

Report on artificial intelligence: “Artificial Intelligence: The Great Disruptor, written by David Bollier, is a synthesis of the various conversations and perspectives from the Inaugural Aspen Institute Roundtable on Artificial Intelligence held in August 2017. Issues featured in the report include the impact of artificially intelligent technologies on the automotive, healthcare and journalism industries. The report concludes with a call for a reimagining of the future of governance and the development of appropriate policy frameworks.” (ASPEN REPORT – Artificial Intelligence: The Great Disruptor: Coming to Terms with AI-Driven Markets, Governance and Life, By David Bollier, April 2, 2018) (Additional: Blog Post)

Information Technology Industry Council (ITI)

Statement on tariffs: President and CEO Dean Garfield stated, “If history is any indication, these proposed tariffs will not work and will be entirely counterproductive. Tariffs penalize U.S. consumers by increasing prices on technology products and will not change China’s behavior. Instead, the administration should act consistent with international obligations and work with other countries to address systemic issues with China.” (ITI STATEMENT – Tariffs Bad for Consumers, Business, and Economy, April 3, 2018)
Blog post on H1-B visas: Director Karolina Filipiak wrote, “the tech sector’s need for high-skilled employees should not be underestimated. In 2016, there were approximately 3.3 million science, technology, engineering, and mathematics (STEM) job openings posted online in the United States.” Moreover, she noted, “High-skilled immigrants make us stronger, not just as an industry, but as a country.” (ITI BLOG – Winning the Global Race for Talent, By Karolina Filipiak, April 2, 2018)

Information Technology & Innovation Foundation (ITIF)

Statement on trade: “The Trump administration is right to push back against China’s abuse of economic and trade policy, but imposing tariffs on producer goods will inadvertently hurt Americans through reduced capital investment and lower productivity growth. The list of tariffs that USTR has proposed today would hurt companies in the U.S. by raising the prices and reducing consumption of the capital equipment they rely on to produce their goods and services,” president Robert D. Atkinson stated. “Attempts to roll back Chinese innovation mercantilism should be more carefully targeted than this. The focus should be on things that will create the most leverage over China without raising prices and dampening investment in the kinds of machinery, equipment, and other technology that drives innovation and productivity across the economy.” (ITIF STATEMENT – ITIF Cautions USTR Against Tariffs on Chinese Producer Goods, April 3, 2018)

Mercatus Center

Podcast on data localization: “Many US companies need to move data across borders, and it’s not just the ones you think. In addition to social media and tech firms, traditional companies like payment processors, logistics companies, and physical manufacturers also provide digital services across countries,” the Mercatus Center wrote. The organization recorded a podcast that shared “ideas to keep us on the right path, with the US keeping to a principled approach that favors openness while safeguarding security and privacy.” (MERCATUS PODCAST – Data Localization Requirements: What They Are and Why They Matter, By Christine McDaniel, Joshua Meltzer, Chad Reese and Brian Larkin, April 3, 2018)

NOTABLE QUOTES

“The passage of the CLOUD Act gives Microsoft and its channel partners a much stronger privacy story for international customers and an opportunity, along with other U.S.-based cloud providers, to continue leading the global charge for cloud computing.”

– Scott Bekker, editor in chief, Redmond Channel Partner

“Our goal has always been not to make repeated visits to court to litigate contentious propositions but to establish new international rules that will avoid legal conflicts and advance privacy rights and law enforcement needs together.”

– Brad Smith, president, Microsoft

“Ensuring that communications among individuals, regardless of their source or destination, have equal protection under the law is critical to keeping the freedoms that are guaranteed under the Fourth Amendment. Law enforcement is required to obtain a search warrant to access information in homes, offices, and mailboxes. Certainly, the same standard should apply to information that is stored electronically. It is time to provide certainty to the protection of that information by updating ECPA and enacting the Email Privacy Act.”

– Deborah Collier, director of technology and telecommunications policy, Citizens Against Government Waste

“But there are changes that Congress can still make to the CLOUD Act to strengthen the protections for U.S. people who will be impacted. Congress can impose transparency requirements on all agreements that DOJ tries to enter into so that we can understand how frequently foreign governments demand information from U.S. companies. Congress can also require that notice be given to any person whose data has been accessed by a foreign government, particularly for people who face criminal charges based on information that was collected at a lesser standard than the Fourth Amendment.”

– Camille Fischer, legal fellow, Electronic Frontier Foundation

“The CLOUD Act requires a provider to preserve, backup or disclose data even if the data is outside the USA. This clarity is useful… Cloud providers can now point to a clear obligation to comply with an up-to-date law. However, the battle is not over yet.”

– Frank Jennings, attorney, Wallace LLP

“The government has just hit the rewind button by issuing a new warrant for data stored overseas. With the passage last month of the CLOUD Act, all eyes will be on Microsoft this week to see if it now complies and turns over customer information stored in its data center in Ireland… The looming issue is whether the CLOUD Act puts an end to the Microsoft appeal. The government says yes, but we will see what Microsoft says.”

– Craig A. Newman, privacy and data security group chair, Patterson Belknap Webb & Tyler LLP

“Millions of people now understand how their data can be weaponized and used against them, and they are demanding change. Cambridge Analytica is just the tip of the iceberg, and this problem doesn’t begin and end with Facebook.”

– Evan Greer, deputy director, Fight for the Future

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