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China seeks greater control over its own ‘Big Tech’ – Politico

With help from John Hendel and Susannah Luthi

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— Tight grip: The Chinese government is pushing ahead with its plan to rein in the country’s homegrown tech giants.

No changes needed: The Biden administration’s Commerce Department is embracing key 5G initiatives that it inherited from the Trump era.

— Down to the wire: Just two days before a key deadline, Facebook filed an expert opinion on Tuesday in support of its petition for FTC Chair Lina Khan’s recusal from matters involving the company.

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CHINA TIGHTENS THE LEASH — China is moving forward with national privacy legislation and greater regulation of tech companies, even as similar reforms remain works-in-progress in the U.S.

— New (draft) rules: China wants to block internet platforms from using algorithms to gather certain kinds of consumer data or to influence users to choose their products and services over those of their competitors, according to draft rules released Tuesday for public comment by China’s competition authority. The draft rules, which are subject to change, target a wide array of corporate behavior that could negatively impact online competition, such as companies’ providing consumers with incentives in exchange for fake reviews. The public comment period for the draft rules is open until Sept. 15.

China has taken on a more aggressive posture toward its tech companies for excessive collection of user data. It has also doled out warnings, especially to companies listed, or hoping for a listing, on U.S. stock exchanges. In April, China fined e-commerce titan Alibaba a record $2.75 billion over antitrust violations.

— Privacy progress: Meanwhile, China is expected to soon pass a federal privacy law, something that remains a hypothetical in the U.S. Congress. On Tuesday, a draft of the law was submitted for a third review by the standing committee of the country’s legislative body. That legislation, modeled off of Europe’s General Data Protection Regulation, would target how major tech companies use personal data.

— In other news: In April, the Chinese government also took a stake and a board seat in a subsidiary of TikTok owner ByteDance related to the Chinese version of TikTok, known as Douyin, The Information reported this week. On Tuesday, Sen. Marco Rubio (R-Fla.) called on President Joe Biden to ban TikTok and ByteDance from the U.S. “Beijing’s aggressiveness makes clear that the regime sees TikTok as an extension of the party-state, and the U.S. needs to treat it that way,” Rubio said in a statement.

Because the ownership stake is in a Chinese subsidiary of TikTok’s parent company, not TikTok or ByteDance itself, it doesn’t appear that TikTok would be directly affected by the Chinese government’s actions. “The China-based subsidy of ByteDance Ltd. referenced has no ownership of TikTok,” said TikTok spokesperson Jamie Favazza in a statement.

TRUMP-ERA 5G INITIATIVES ENDURE UNDER BIDEN — The Biden administration is leaning into multiple 5G projects begun under former President Donald Trump, a sign of surprising continuity on telecom policy despite sharp differences between the two administrations.

— Much of this activity is happening at the Commerce Department: The National Telecommunications and Information Administration remains committed to carrying out the 5G security implementation plan that Trump-era staffers released in January (much of which is aimed at combating the influence of Chinese hardware giants like Huawei). In an NTIA report released Tuesday, the agency summed up conclusions from 5G security listening sessions held earlier in the year.

The Biden administration is also continuing the NTIA Spectrum Policy Symposium, the Commerce Department said Tuesday, carrying on a tradition Trump staff started in 2018. These sessions gather federal agency representatives and industry to talk about how to best share the airwaves and prepare for the development of 5G and 6G networks. The first event under Biden will take place Sept. 21.

— Who’s steering the ship? NTIA has filled out senior staff positions in recent months, hiring Aadil Ginwala as chief of staff and Phil Murphy (not that Phil Murphy) as senior adviser. But the White House still hasn’t nominated a permanent leader of the agency. Possible contenders include Senate staffer Joseph Wender, telecom lawyer (and Biden bundler) Scott Blake Harris and Mozilla exec Alan Davidson.

Busy days ahead: Although NTIA is a modest agency at best, Congress is heaping boatloads of broadband responsibility onto it, via both pandemic relief legislation and its proposed infrastructure deal; NTIA will likely be expected to administer much of the $65 billion the infrastructure bill would devote to broadband.

BEFORE YOU DECIDE, HEAR US OUT — Ahead of a Thursday deadline, Facebook submitted an expert report from Daniel Rodriguez, a Northwestern law professor, early Tuesday evening in the hopes of getting Khan to recuse herself because of her past criticisms of Facebook. The report came just two days ahead of the FTC’s deadline to file an amended complaint against the social media company.

A federal judge had thrown out the FTC’s original complaint, saying that it failed to sufficiently explain why the agency believed Facebook held a dominant share in the “personal social networking services” market.

— Rodriguez’s reasoning: He argued that Khan’s body of work and tech-skeptical remarks clearly showed that the FTC chair had already made up her mind and could not approach the case “with an open mind as to Facebook’s liability.”

“A reasonable observer could not conclude that Chair Khan is likely to bring an open mind and impartial attitude to Facebook’s case in light of her previous public statements, scholarship, and congressional work,” he wrote. “Such an observer is much more likely to conclude that Chair Khan has an axe to grind against Facebook.”

— The implications: If Khan were to recuse herself, that would leave a split 2-2 commission of Democrats and Republicans able to decide the case. The FTC could then deadlock on whether to file an amended complaint and challenge Facebook again — a potential blow to Khan’s efforts to rein in tech power.

JUDGE REJECTS SUIT OVER U.K. PRIVACY LAW — A ruling by a federal judge in California this week will likely quash any potential efforts to bring stricter European privacy laws into the U.S. legal system. On Monday, the court ruled against a U.K. citizen’s attempt to sue an American company over alleged violations — on British soil — of the U.K.’s version of the EU’s privacy law.

— How it went down: The plaintiff, Hugh Elliott, was trying to file a U.S. class action suit composed solely of U.K. residents against PubMatic, a California-based third-party advertising company that uses cookies for its targeted marketing. When the plaintiff filed his lawsuit, PubMatic had placed 45 cookies in his web browser.

But the move was blocked in a Monday order from Judge Phyllis Hamilton of Northern California’s federal district court, after PubMatic said it would submit to jurisdiction in the courts of England and Wales.

— The privacy tug-of-war across the pond: The U.S. and Europe are increasingly facing down each other over privacy, including U.S. court orders demanding information protected under GDPR. Both sides are working on a replacement for the EU-U.S. Privacy Shield — a framework that allowed for transatlantic data transfers and had major implications for how U.S. tech companies operate in Europe — which has been invalidated by the courts.

Manik Gupta is joining Microsoft as corporate VP for Teams Consumer experiences. He was previously chief product officer at Uber and a product leader on Google Maps. … Marie Baldassarre will be Rep. Ro Khanna’s new comms director. She is replacing Heather Purcell, who was the California Democrat’s deputy chief of staff and comms director. Purcell will join California Gov. Gavin Newsom’s Office of Business and Economic Development as deputy comms director. … Kevin Green has been hired as senior director of public policy and external relations at Somos. Green was most recently a senior telecom policy analyst at the FCC and Verizon’s executive director for federal regulatory affairs.

Coke Stewart, acting deputy director of the U.S. Patent and Trademark Office, is leaving to join the faculty at the Regent University School of Law. … John “J.D.” Keller has been named SVP for Comcast’s Mountain West Region, after holding the role for its Twin Cities Region. He replaces Amy Lynch, who is now SVP of customer experience and customer operations for Comcast’s West Division. … Kelcey Reed will join [email protected], a workforce development nonprofit, as CTO.

Charles F. Bolden Jr. has joined the board of Ligado Networks. Bolden, a retired U.S. Marine Corps major general, served as NASA administrator from 2009 to 2017. … Ligado also announced a partnership with Mavenir to develop base stations for advanced connectivity services in North America, part of plans for a 5G mobile satellite network for the Internet of Things.

From our friends at POLITICO Influence: Huawei hired five new outside lobbying firms at the beginning of July, according to a newly filed disclosure, which also showed it has retained Imperium Global Advisors’ Brian McLaughlin, a former aide to Senate Majority Whip Dick Durbin. But as of last week, disclosures show, it cut loose the firm J.S. Held and Stephen Binhak, both of whom it hired a little over a month ago. … Microsoft has added another outside lobbying firm to its roster of more than two dozen, retaining a team from King & Spalding that includes former Rep. Kendrick Meek (D-Fla.). Former Meek staffer Amirah Salaam and Allison Kassir will lobby for the tech giant on information technology, innovation, and research funding, according to a disclosure.

Prime position: “People Are Now Spending More Money at Amazon Than at Walmart,” NYT reports.

Q&A: Rest of World talks to Sara Wahedi, the founder of a Kabul-based crisis alert app which is now fighting to protect its employees. “We do not feel safe,” she said.

Coincidence or nah? A lawyer for Sen. Josh Hawley (R-Mo.) began clerking for Justice Clarence Thomas. “Then Thomas came out swinging for Big Tech.” Protocol has more.

Are we there yet? “One year after Schrems II, the world is still waiting for U.S. privacy legislation,” writes Cameron F. Kerry, who served as general counsel for the Commerce Department in the Obama era.

ICYMI: Twitter is testing a new feature that allows users to report misinformation, Emily reports for Pros.

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