Executive Briefing January 26, 2018

TOP STORIES — Continuing Coverage Microsoft vs. DoJ — Supreme Court Amicus Briefs

There were several follow up articles to the filings of the amicus briefs with the Supreme Court last week.  A reoccurring theme in coverage was the concern of many amici that Congress, not the courts, must decide this issue, as well as the fear that should the Supreme Court rule in favor of the DOJ, companies will be caught in a conflict between foreign and U.S. laws.

As the two quotes below highlight, there is broad support for Microsoft in this case.

Here are a few highlights.

TOP QUOTES

  • “As I’ve long said, the question of whether and when law enforcement’s authority should reach overseas is a policy question for Congress, not the courts. I urge the Court to allow my colleagues and me to complete our work rather than rendering a decision that will upend legislative efforts and create substantial problems for service providers and their customers.”

– Sen. Orrin Hatch

  • “Our amicus brief strives to sensitize the Supreme Court to dangerous arguments the government has made that, if adopted, could adversely impact Fourth Amendment rights… The Microsoft Ireland case raises complicated issues, but it certainly shouldn’t be decided in a manner that erodes constitutional privacy rights.”

– Jennifer Granick, surveillance and cybersecurity counsel, American Civil Liberties Union

HILL UPDATE

Microsoft on the Issues I-Squared will help ensure the US has the skilled talent it needs to grow

Microsoft President and Chief Legal Officer Brad Smith blogged about the Immigration Innovation (I-Squared) Act.  Brad writes that the new legislation introduced on Thursday by Sen. Orrin Hatch and Sen. Jeff Flake takes important steps to reduce the green card backlog, strengthen U.S. worker protections, prevent H-1B program abuse and raise new STEM training funds for Americans.   “[I-Squared] strikes the right balance to keep our economy strong, attract and retain top global talent and build more opportunities for American workers.  We hope the Senate’s leaders will come together to support these important reforms.”   I-Squared increases annual H-1B quota, eliminates per-country green card caps, allows spouses and children of immigrants to work in US and imposes additional fees on visas that will go toward supporting STEM education and apprenticeships.    

Engadget Trump Signs Bill Extending NSA’s Warrantless Surveillance

On Friday afternoon, just hours before Congress failed to avert a government shutdown, the President signed into law the “FISA Amendments Reauthorization Act of 2017.” The bill passed the House and Senate earlier this week with the support of many Republicans and Democrats, offering only slight adjustments to Section 702, a law that oversees the NSA’s ability to spy on “international terrorists, weapons proliferators, and other important foreign intelligence targets located outside the United States.”

ARTICLE SUMMARY

Washington Examiner Justices can put a leash on America’s Inspector Javert

The Washington Examiner published an opinion piece by libertarian writer Eric Peters examining Microsoft’s warrant case, describing the DOJ’s argument that it has legal authority under ECPA to compel Microsoft to hand over foreign-stored data an “exceptionally tortured reasoning.” Peters warns of the “potential mayhem” for international companies should the Supreme Court reverse the decision of the 2nd Circuit Court of Appeals.

TechCrunch Alphabet Launches New Cybersecurity Company, Chronicle, Out of Its X Moonshot Factory

Alphabet, the company you probably still wrongly refer to as “Google,” today announced the launch of Chronicle, a new cybersecurity company that aims to give companies a better chance at detecting and fighting off hackers. Chronicle is graduating out of Alphabet’s X moonshot group and is now a standalone company under the Alphabet umbrella, just like Google. Stephen Gillett, who joined X from Google Ventures and was previously the COO of Symantec, will be the new company’s CEO. To get started, Chronicle will offer two services: a security intelligence and analytics platform for enterprises, and VirusTotal, the online malware and virus scanner that Google acquired in 2012.

Reuters U.S. Not Starting Trade War, But Sees China Tech Threat: Ross

DAVOS, Switzerland (Reuters) – The United States is not starting a trade war but trying to level the playing field of global commerce and fend off Chinese protectionism, including a “direct threat” in high-tech goods, U.S. Commerce Secretary Wilbur Ross said on Wednesday. Ross was speaking a day after Washington imposed steep import tariffs on washing machines and solar panels, billed as a way to protect American jobs by President Donald Trump, who is widely expected to take further action on steel, aluminum and intellectual property. “The Chinese have been for quite a little while been superb at free trade rhetoric and even more superb at highly protectionist behavior,” Ross said.

New York Law Journal; Judge Urges Action to Curb ‘Overbroad’ Digital Search Warrants

New York Law Journal reported on a ruling by Acting Manhattan Supreme Court Justice Daniel Conviser to suppress warrants for digital evidence in a murder case. In his decision, Justice Conviser wrote that overly broad search warrants for digital evidence in New York are “all too common,” and offered that the larger issue is that search warrants are time sensitive by nature and often provided to judges with busy calendars, resulting in a culture that “encourages quick review.” He also urged that laws be updated with consideration of digital searches, explaining that New York’s statute for search warrants was enacted in 1970 and only addresses searches of physical spaces for tangible items.

Wall Street Journal Tax Change Aims to Lure Intellectual Property Back to the U.S.

A provision in the newly revised U.S. tax code slashes the income tax companies pay on royalties from the overseas use of intellectual property or so-called intangible assets, such as licenses and patents. The new tax break, for what is dubbed foreign-derived intangible income, effectively reduces tax on foreign income from goods and services produced in the U.S. using patents and other intellectual property to 13.125% until the end of 2025, after which the rate rises to 16.4%. Previously, royalties paid to a unit in the U.S. would have been taxed similarly to other U.S. income, for which the top corporate tax rate was 35%. The new headline corporate rate is 21%.

The Verge Artificial Intelligence Is Going to Supercharge Surveillance

Artificial intelligence is giving surveillance cameras digital brains to match their eyes, letting them analyze live video with no humans necessary. This could be good news for public safety, helping police and first responders more easily spot crimes and accidents and have a range of scientific and industrial applications. But it also raises serious questions about the future of privacy and poses novel risks to social justice. What happens when governments can track huge numbers of people using CCTV? When police can digitally tail you around a city just by uploading your mugshot into a database? Or when a biased algorithm is running on the cameras in your local mall, pinging the cops because it doesn’t like the look of a particular group of teens?

The Verge Rupert Murdoch Calls for Facebook and Google to Subsidize the News Business

Citing the popularization of “scurrilous news sources through algorithms that are profitable for these platforms but inherently unreliable,” Murdoch says Facebook and Google should pay money in an arrangement similar to so-called carriage fees. These fees are the money paid by cable and satellite television providers to local, over-the-air broadcast stations for the right to carry local transmissions. In the US, this is an industry norm, with the fees being baked into what’s known as retransmission consent. That arrived back in 1992 in an agreement that became legally mandated between cable operators and stations with the United States Cable Television Consumer Protection and Competition Act.

Washington Post Facebook Admits Social Media Sometimes Harms Democracy

Facebook said Monday that it fell short in preventing the social media network from being used for foreign meddling in the U.S. presidential election. New blog posts written by Facebook executives appear to be the most critical self-assessment yet of the social media network’s effect on American democracy. Samidh Chakrabarti, the company’s product manager for civic engagement, said the 2016 presidential election has forced Facebook to confront harsh questions about the role it has played in spreading false information and intensifying divisiveness in the current political climate.

THINK TANK/TECH TRADE ASSOCIATION HIGHLIGHTS

American Civil Liberties Union (ACLU)

  • Blog post on Microsoft Warrants case: The ACLU published a blog by Jennifer Granick, surveillance and cybersecurity counsel, explaining why the ACLU filed an amicus brief with the U.S. Supreme Court, along with four other civil society groups, in support of Microsoft in the warrant case. Granick highlights several of the key arguments the groups included in their amicus brief, including infringement of Fourth Amendment rights and the potential for reciprocity from other countries seeking U.S.-stored data, should the Supreme Court rule in favor of the DOJ.  (ACLU Blog — Does a US Warrant Extend to Data Held Abroad?)

American Enterprise Institute (AEI)

  • Blog post on surveillance: Resident scholar Claude Barfield wrote, “Whatever the conflicted legislative history, the ultimate version of the FISA Section 702 reauthorization signals a major victory for more hawkish supporters of US government foreign (and domestic in some cases) surveillance programs.” He added, “Barring a Snowden-size set of new revelations exposing additional US intelligence agencies’ secret programs, privacy/libertarian advocates face a long six years before major changes in current foreign intelligence programs and practices are reviewed.” (AEI BLOG – Congress renews major surveillance law with little change: The end of an era?, By Claude Barfield, January 26, 2018)

BSA | The Software Alliance

  • Press release touting amicus brief in support of Microsoft: BSA “along with other leading industry associations and public interest groups, filed an amicus brief to the Supreme Court in favor of Microsoft in United States of America v. Microsoft Corporation.” Moreover, “The brief argues that current laws do not authorize law enforcement warrants for accessing digital evidence stored outside the United States, and urges the Court to uphold the Second Circuit’s ruling.” (BSA PRESS RELEASE – BSA Files Amicus Brief with Industry Leaders to Supreme Court in Support of Microsoft, January 18, 2018)

Competitive Enterprise Institute (CEI)

  • Blog post detailing amicus brief in support of Microsoft in search warrant case: Executive Vice President Jim Harper wrote, “The details of the case are almost beside the point for us: The U.S. government got a warrant in this case, as required by the Stored Communications Act, but it tried to use that warrant to force Microsoft to retrieve data from Ireland. That would be an extraterritorial application of the statute, which is something that Congress did not authorize. Our brief was intended to put that narrow statutory question in its proper context in terms of subpoenas, warrants, and digital property rights.” (CEI BLOG – Supreme Court Should Safeguard Rights to Digital Property in Microsoft Case, By Jim Harper, January 18, 2018)

Information Technology Industry Council (ITI)

  • Press release on high-skilled immigration I-Squared bill: President and CEO Dean Garfield stated, “I-Squared is an opportunity to do the right thing for all the right reasons. There is consensus that reforms to fix the nation’s immigration laws for high-skilled workers are long overdue. The commonsense I-Squared Act will allow employers to recruit and retain the best and brightest and fuel America’s leadership in technology and innovation.” (ITI PRESS RELEASE – Tech Applauds New Legislation to Reform High-Skilled Immigration, January 25, 2018)
  • Blog post on NAFTA: Director of Federal Procurement and Counsel Eminence Griffin noted that ITI shared “many of the Trump administration’s goals of modernizing [the NAFTA] agreement, which was negotiated long before the incredible changes that the internet and digital technologies have brought to the global economy.” She added the group believes “that this modernization can bring additional benefits to the deeply integrated supply chains that span North America.” (ITI BLOG POST – Government Procurement Moves to Center Stage in NAFTA Renegotiations, By Eminence Griffin, January 23, 2018)

Information Technology & Innovation Foundation (ITIF)

  • Blog post on rural broadband infrastructure: Director Doug Brake argued, “There are of course significant externalities to broadband access that are not captured by private providers—good policy should enable entry and upgrade, and also see the government step in where the economics fail.” He added, “Rural broadband infrastructure, in particular, needs greater support. Effective price discrimination and federal subsidies under the Lifeline program must be expanded and protected to make Internet access affordable for all low-income residents.” (ITIF BLOG – Broadband Myth Series, Part 2: Why Municipal Networks Are Not a Good Tool to Advance Broadband, By Doug Brake, January 25, 2018)

Internet Association

  • Statement on high-skilled immigration I-Squared 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

  • Statement on high-skilled immigration I-Squared bill: President and CEO Linda Moore stated, “We need a two-prong policy approach of boosting STEM education and training for Americans, while fixing our high-skilled immigration system so that businesses can recruit the best people for these jobs without harming U.S. workers.” She added, “Throughout America’s history, immigrants have been a source of strength for our country and helped drive economic growth that has made us the most prosperous and innovative country on the planet.” (TECHNET STATEMENT – TechNet: I-Squared Legislation Will Boost Innovation, Growth & Job Creation In U.S., January 25, 2018)

U.S. Chamber of Commerce

  • Blog post on NAFTA: Senior Vice President John G. Murphy wrote, “It is unclear why U.S. negotiators are pushing a proposal that promises no benefit and considerable harm to American companies and workers.” He added, “If the United States revokes access to our own government procurement markets, domestic politics will make it necessary for Canada and Mexico to do the same. The losers here would be American companies and workers.” (U.S. CHAMBER OF COMMERCE BLOG – Gutting NAFTA’s Procurement Rules Could Cost Americans Billions, By John G. Murphy, January 24, 2018)

NOTABLE QUOTES

  • “These companies simply cannot stand by while their platforms are used to facilitate child abuse, modern slavery or the spreading of terrorist and extremist content… Just as these big companies need to step up, so we also need cross-industry responses because smaller platforms can quickly become home to criminals and terrorists. We have seen that happen with Telegram. And we need to see more cooperation from smaller platforms like this.”

– Prime Minister Theresa May

  • “Last week, Congress and the president chose to ignore our history and the human values underlying the right to privacy. Those values recognize that the individual pursuit of happiness is best actualized in an atmosphere free from the government’s prying eyes. Stated differently, the authors and ratifiers of the Fourth Amendment recognized that a person is not fully happy when being watched all the time by the government. Yet the constitutional values and timeless lessons of history were not only rejected by Congress but also rejected in ignorance, and the ignorance was knowingly facilitated by the members of the House Intelligence Committee.”

– Judge Andrew Napolitano

  • “While we appreciate the work of the law enforcement community and sympathize with their mission, there is a reason why the entirety of the cryptographic, cybersecurity and tech communities have been unequivocal in their perspective on this issue. Encryption protects the security of people worldwide, and we know from experience that any unnecessary access creates unnecessary risk. Therefore, the only “responsible” approach is to preserve good encryption and push back against ill-informed proposals advocating a parochial position based on a myopic lens.”

– Amit Yoran, chairman and CEO, Tenable

  • “But in the U.S., telecom companies provide data, largely anonymized, only as required by statute and after judicial review. Judge for yourself how similar that is to what’s happening in China. Quite apart from identifying potential terror activities or crimes in progress, facial-recognition and related technology is being applied to tracking the private and commercial activities of Muslim minorities.”

– Therese Shaheen, chariman, USAsia Economic Foundation

  • “The authors of EPCA could not have envisioned its provisions being used to suborn data stored overseas or even domestically, given that the Internet (and emails, the object of the feds’ inquisition) didn’t even exist back in ’86. EPCA certainly cannot authorize the feds to stomp on the laws of other countries, as this amounts to a rejection of their sovereignty and encourages other countries to regard American sovereignty with equal contempt. After all, if we can do it to them, why shouldn’t they do it to us?”

– Eric Peters, freelance writer

  • “Cyber is another vector — it’s not a threat of its own, but it is a means by which many non-nation-state actors can inflict incredible costs on the United States of America. And we need to make sure that we are watching those actors in the same way we would a threat from a traditional nation-state. [Despite end-to-end encryption, the CIA is] still doing pretty good collecting signals intelligence… But that does not foreclose the absolute imperative that we continue to improve our capacity to collect human intelligence.”

– CIA Director Mike Pompe

  • “Congress failed in its oversight role by not demanding an estimate of how many Americans are swept up by Section 702 warrantless surveillance before passing a six-year extension of the law. Fortunately, it has the potential to remedy this error in the near future.… Senators voting on a new NSA director should set a strong but simple condition for their approval: In order to be confirmed, the next NSA director must publicly commit to Congress that that the NSA will provide an estimate of the number of Americans affected by Section 702.”

– Jake Laperruque, senior counsel, The Constitution Project

SOCIAL MEDIA HIGHLIGHTS