Executive Briefing February 2, 2018

TOP STORIES — Continuing Coverage Microsoft vs. DoJ/Business Impact

Sharing two legal articles summarizing the issues in the Microsoft case.  Also included an interesting article speculating as to why Democratic Maryland Senate Candidate Chelsea Manning may have chosen to host her campaign website in Iceland—because the US doesn’t have an agreement in place with Iceland to get access to data.  This highlights the potential business impact of outdated current law and the importance of the issues in the case.  Scholars agree that Congress needs to create a legislative fix.

New York Law Journal ‘Microsoft v. United States’: Territoriality in the Age of the Cloud

New York Law Journal published a contributed piece by Sarah Coyne, partner at Weil, Gotshal & Manges LLP, previewing oral arguments in Microsoft’s warrant case. Coyne examines the ruling by the Second Circuit and notes that everyone, including Congress seem to agree a legislative fix is necessary. She also outlines several issues the U.S. Supreme Court will have to weigh in upcoming oral arguments when a “badly outdated statute suffers a head-on collision with modern technology,” including whether this is a case regarding individual privacy, if a SCA warrant may be applied extraterritorially, and the potential for conflict of laws and international comity.

ABA Journal Microsoft case underscores legal complications of cloud computing

ABA Journal published an article previewing the upcoming oral arguments in Microsoft’s warrant case. The article details the history of the case, Microsoft’s reasons for challenging the warrant, and the numerous concerns raised by amici in their briefs filed with the U.S. Supreme Court. The piece includes remarks from David Howard, Microsoft’s deputy general counsel, and Andrew Pincus, partner at Mayer Brown LLP, and includes several quotes from amicus briefs regarding the potential for reciprocal demands directed at U.S. citizens from foreign governments and the conflict with EU law and national sovereign interests.

Defense One Chelsea Manning’s Campaign Website is Based in Iceland. Why?

Defense One published an article examining why Senate candidate Chelsea Manning decided to host her official campaign website, xyChelsea.is, in Iceland. While the piece notes that Manning has not provided comment on the decision to register an Icelandic domain, the piece hypothesizes that one plausible reason may be because of the precedent set in the Second Circuit’s ruling in Microsoft’s warrant case that law enforcement may not use a search warrant to obtain foreign-stored data. The article notes that since the U.S. does not have an MLAT agreement with Iceland, U.S. law enforcement cannot otherwise obtain her data. The piece notes that the eventual ruling in the warrant case will impact how companies comply with law enforcement requests for data.

TOP QUOTES

  • “Our view is [the Stored Communications Act] ought not to be interpreted to allow the government this unbridled power, but that Congress needs to consider under which circumstances a warrant ought to be allowed outside the United States… Using this outdated statute is not the right vehicle to do this.”

– David Howard, corporate vice president and deputy general counsel, Microsoft

  • “It’s difficult to say why [Chelsea Manning’s] campaign elected to go with a server in Iceland. But one possible explanation rests the 1986 Electronic Communications Privacy Act, or ECPA, which describes how law enforcement agencies may obtain data for investigatory purposes.  Last year, the 2nd U.S. Circuit Court of Appeals held that data in computers that aren’t on U.S. soil are not subject to warrants.”

– Patrick Tucker, technology editor, Defense One

HILL UPDATE

Slate Americans Wanted More Privacy Protections. Congress Gave Them Fewer.

Congress passed a bill to reauthorize Section 702 of the Foreign Intelligence Surveillance Act for six years. Section 702 is the surveillance law that authorizes the government to target foreigners located abroad to collect foreign intelligence information. However, we know that the government also sweeps up substantial quantities of Americans’ communications under Section 702. Despite the public’s calls for additional privacy protections, Congress passed the bill and called it a reform while hoping that no one would notice that it actually increases privacy risks. And you don’t have to be a criminal or a terrorist to be caught up in the government’s web. The law now authorizes several ways for the government to collect and use an average American’s communications.

ARTICLE SUMMARY

CyberScoop Trump administration wants larger role in shaping international data laws

CyberScoop reported on comments made by White House cybersecurity coordinator Rob Joyce at the Institute for Critical Infrastructure Technology regarding the administration’s cybersecurity priorities for the coming year, including modernizing international data agreements. Joyce said that the White House plans to take a larger role in the next year on developing legislative solutions to the issue of cross-border access to data and the increased “balkanization” of the internet. He went on to detail that while the administration is considering several models to address this issue, they are working with several congressional offices on the issue and cited the U.K-U.S. bilateral agreement as a model that could be adopted in arrangements with other countries. CyberScoop’s reporting briefly noted that the Supreme Court is set to weigh in on this issue in Microsoft’s warrant case.

New York Times Tech Giants Brace for Europe’s New Data Privacy Rules

While these changes are rippling out worldwide, a major reason for these shifts comes from Europe: The tech giants are preparing for a stringent new set of data privacy rules in the region, called the General Data Protection Regulation. Set to take effect on May 25, the regulations restrict what types of personal data the tech companies can collect, store and use across the 28-member European Union. Among their provisions, the rules enshrine the so-called right to be forgotten into European law so people can ask companies to remove certain online data about them. The rules also require anyone under 16 to obtain parental consent before using popular digital services. If companies do not comply, they could face fines totaling 4 percent of their annual revenue.

Politico FBI Memo Fight Puts Fresh Spotlight on Controversial Surveillance Law

The battle between the White House, FBI and Congress over a classified GOP memo alleging misconduct by bureau officials again pushes into the spotlight a hotly debated law governing how the government uses its most invasive surveillance powers. The law, the Foreign Intelligence Surveillance Act, allows authorities to secretly obtain permission to covertly gather intelligence on suspected spies or terrorists on U.S. soil. Republicans say FBI officials acted improperly when they sought a court’s approval under the law to spy on a former campaign adviser to President Donald Trump, and they want to release a classified memo they wrote on the subject.

CNBC Trump Vows to Protect US Intellectual Property, Without Naming China

U.S. President Donald Trump vowed on Tuesday to protect American intellectual property, but made no mention of China, which his administration has accused of trade abuses, in his first State of the Union speech to Congress. Trump had been expected to deliver strong warnings to countries about unfair trade practices, including stealing intellectual property and providing state aid to their industries. Instead, his comments on trade during the speech were restricted to three sentences in which he repeated that “fair and reciprocal” trade were necessary, but did not elaborate.

Washington Post FBI Challenges Accuracy of GOP’s Surveillance Memo

The FBI pushed back sharply Wednesday against a GOP memo criticizing the bureau’s use of secret surveillance orders — escalating a remarkable public standoff between the White House and the nation’s top law enforcement agency. “As expressed during our initial review, we have grave concerns about the material omissions of fact that fundamentally impact the memo’s accuracy,’’ the FBI said in a statement.

The Hill War Room to Boardroom: The New Era of Cybersecurity

Facebook’s hire of its first ever head of cybersecurity policy is recognition that protecting corporations from foreign hacking is an increasingly serious matter. Sophisticated cyber threats presented by state-sponsored actors have long challenged sensitive United States government computer networks. What’s new — as Facebook’s move indicates — is that these complex state-sponsored cyberattacks are now also threatening America’s leading companies to a larger extent than ever.

Business Insider Americans Say Facebook Is Worse for Society Than Walmart or McDonald’s

Walmart and McDonald’s may have negative effects on society, according to a new survey of 2,000 Americans, but Facebook beats them both. Conducted by the research company Honest Data, the survey asked people to single out from a list of companies which ones they felt had the worst impacts on society. The companies included Marlboro, Walmart, Facebook, McDonald’s, and Coca-Cola. Facebook fit that criteria for 27% of respondents, coming in second behind Marlboro, which 43% of people said had negative effects. McDonald’s and Walmart came in at 21% and 18%, respectively, while 36% of people said “None of the above.”

McClatchy Spouses of Indian and Chinese Tech Workers Could Be Stripped of Right to Work in U.S.

Tens of thousands of foreign nationals living legally in the United States could soon lose government permission to earn a living while they are here. The Trump administration could end a program as soon as February that allows the spouses of legal foreign workers, mainly tech workers from India and China, to obtain their own work visas. Ending or changing the Obama-era rule could have major effects in western Wake County, where a group of 200 people – almost all women – have organized to fight against the potential change, writing letters and meeting with their members of Congress.

New York Times After Globalization, a New Specter Could Feed Populist Politics

Does President Trump represent the new normal in American politics? As the world’s oligarchy gathered last week in Davos, Switzerland, to worry about the troubles of the middle class, the real question on every plutocrat’s mind was whether the populist upheaval that delivered the presidency to the intemperate mogul might mercifully be over. If it was globalization — or, more precisely, the shock of imports from China — that moved voters to put Mr. Trump in the White House, could politicians get back to supporting the market-oriented order once the China shock played out?

THINK TANK/TECH TRADE ASSOCIATION HIGHLIGHTS

Competitive Enterprise Institute (CEI)

  • Blog post on high-skilled immigration: Research fellow Ryan Radia argued that “America’s federal immigration laws greatly restrict the ability of skilled immigrants to come to the United States.” He added, “If the president wants to make America great again, he should call for an expansion of high-skilled immigration to improve the competitiveness of U.S. companies, reduce federal deficits, and fuel American economic growth.” (CEI BLOG – A Highly-Skilled Opportunity for Trump on Immigration, By Ryan Radia, January 29, 2018)

Heritage Foundation

  • Blog post on immigration: Policy analyst David Inserra argued that if “conservatives truly want to bring the U.S. immigration system into the 21st century, the legal immigration system will have change in three main ways,” including the end of “chain migration,” adopting an employment-based immigration system and getting “rid of the diversity visa program along with the 7 percent per-country cap.” (THE DAILY SIGNAL – These 3 Changes Would Drastically Improve Our Immigration System, By David Inserra, January 31, 2018)

Information Technology Industry Council (ITI)

  • Blog post on immigration: President and CEO Dean Garfield wrote, “The tech industry shares the goal of the Trump Administration and Congress: we want to ensure that America remains a global leader in advancing transformative technologies while creating high-paying jobs in communities across the country.” He added, “To meet our shared goal, we need to embrace one of our nation’s greatest strengths: immigration. Half of the 87 U.S. startups companies valued at over $1 billion were founded by at least one immigrant and each one of these companies employs on average 760 workers.” (ITI BLOG – American Competitiveness Hinges on Immigrants, By Dean C. Garfield, February 1, 2018)
  • Blog post on the State of the Union: Garfield also argued that “the current U.S. immigration system cannot meet the needs of today’s economy and is not equipped for future demands.” He added, “The U.S. must embrace policies like high-skilled worker visas so companies, manufacturers, and small businesses can attract the world’s best talent to work in the U.S. alongside the pacesetters, entrepreneurs, and other individuals who power the U.S. workforce, drive innovation, create jobs, and help the country compete globally.” (ITI BLOG – Trump’s State of the Union speech can’t neglect US tech leadership, By Dean C. Garfield, January 30, 2018)

Information Technology & Innovation Foundation (ITIF)

  • Press release announcing new public sector technology initiative: ITIF along with Governing Technology and Governing Magazines announced “the launch of the government Digital Transformation Exchange (DTE), an online platform powered by ProudCity for public agencies to share and discuss strategies for using technology to modernize and improve state government operations.” Moreover, “The first-in-the-nation partnership will accelerate adoption of new technologies and digital government platforms by empowering collaboration and sharing of standardized best-practices among government agencies.” (ITIF PRESS RELEASE – ITIF Announces Launch of Digital Transformation Exchange for State Government Leaders, Highlighting Seven Case Studies, January 30, 2018)

Internet Association

  • Statement on high-skilled immigration bill: President and CEO Michael Beckerman stated, “The internet industry supports the Immigration Innovation Act. One of the biggest economic challenges facing our nation is the need for qualified, highly skilled professionals, domestic and foreign, who can create jobs and immediately contribute to and improve our economy.” He added, “This legislation will invest in our country’s competitiveness by providing high-skilled foreign workers and people trained in the U.S. the opportunity to stay in the U.S. to help our economy grow. It also promotes American ingenuity by providing additional funding for STEM education.” (INTERNET ASSOCIATION STATEMENT – Statement on The Introduction Of The Immigration Innovation Act, January 25, 2018)

TechNet

  • Op-ed on NAFTA: President and CEO Linda Moore argued, “Walking away from NAFTA would jeopardize our nation’s economic growth, weaken our relationship with two of our most important allies, and cede important economic opportunities and leadership in our own region to China and other competitors.” She added, “The stakes have never been higher. As talks continue, it is imperative that they demonstrate consensus can be reached and meaningful progress made. Job creators and workers in the U.S. need a win on NAFTA. Walking away would be a major loss.” (WASHINGTON EXAMINER – Modernize NAFTA, don’t ditch it, By Linda Moore, January 29, 2018)

NOTABLE QUOTES

  • “While we’re all concerned about cybercrime and how our internet works, we’re also really concerned about other countries around the world really creating this convoluted patchwork of laws and regulations that impact our ability to move data… If we go to the lowest common denominator, where everyone builds their walled garden and data has to be localized and data is exploited by totalitarian regimes, then it really cuts against the core of the fundamental internet that the U.S. envisioned and pushed out.”

– Rob Joyce, White House cybersecurity coordinator

  • “Simply put, the SCA was never meant to, and clearly fails to, address the intangible nature of modern data. Indeed, the only thing everyone—including Congress—seems to agree on is that the SCA is more than ripe for a statutory fix. To that end, Congress is already considering legislative amendments to the very provisions of the SCA at issue in the case. ”

– Sarah Coyner, litigation partner, Weil, Gotshal & Manges LLP

  • “In countless ways, Section 702 surveillance violates Americans’ privacy and other constitutional rights, not to mention the millions of people around the world whose right to communications privacy is also ignored.. For years, the NSA has pushed its boundaries. The NSA has repeatedly violated its own policies on collection, access, and retention, according to multiple, unsealed FISC opinions. Infamously, by relying on an unjustifiable interpretation of a separate statute—Section 215—the NSA illegally conducted bulk collection of Americans’ phone records for years. And even without explicit statutory approval, the NSA found a way to create this bulk phone record program and persuade the FISC to condone it, despite having begun the bulk collection without any court or statutory authority whatsoever.”

– Andrew Cocker and David Ruiz, staff attorneys, Electronic Frontier Foundation

  • “[Agencies] seem to think anything they have a lawful court order to get access to, they should get access to. We think there should be clear places where the government should never be able to reach..”

– Joseph Lorenzo Hall, chief technologist, Center for Democracy and Technology

  • FISA is supposed to protect Americans from terrorism and enhance law enforcement. That’s what supporters want you to think. Detractors see FISA Section 702 as an affront to civil liberties. Maybe it is. Maybe it isn’t. But the program would have faced additional scrutiny had concerns outlined in the memo appeared before the House and Senate reauthorization votes. After all, timing is everything.
  • “In facilitating and safeguarding the lawful exchange of data between independent countries, whether in the name of commerce or the rule of law, these digital trade agreements would help lay the groundwork for the global, digital infrastructure that our future selves deserve. Before long, talking about data somehow possessing a physical location, out of reach to some and too easily hidden by others, will become one of those quaint throwbacks we’ll completely forget.”

– Antonio Garcia Martinez, tech entrepreneur and author

  • “The internet looks completely different than it did when ECPA was drafted over 30 years ago. It is time we update this law to better protect Americans’ right to privacy and reflect the internet of the 21st century.”

– Sen. Steve Daines

  • “The FISA expansion would never have passed the Senate had the House Intelligence Committee memo and the data on which it is based come to light seven days sooner than it did. Why should 22 members of a House committee keep their 500-plus congressional colleagues in the dark about domestic spying abuses while those colleagues were debating the very subject matter of domestic spying and voting to expand the power of those who have abused it?”

– Judge Andrew P. Napolitano

  • “First, there are legitimate questions about whether an American’s civil liberties were violated [by the FISA warrant]… There may have been malfeasance by people at the FBI — by certain individuals.”

– House Speaker Paul Ryan

  • “If Microsoft managed safety deposit boxes in Ireland, a U.S. search warrant could not compel the company to ship its contents to the United States. Neither the language nor the spirit of the 1986 law seems to allow the government to compel Microsoft to cough up data on its servers in another country…  It is clearly time for Congress to step-up to the plate and deal with these issues.”

– Paul Finkelman, president, Gratz College

SOCIAL MEDIA HIGHLIGHTS