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March 08, 2019

Situational awareness: Democratic presidential candidate Sen. Elizabeth Warren is proposing new laws and regulatory actions to break up tech giants, including unwinding long-consummated deals like Facebook's acquisition of WhatsApp and Instagram, and Amazon's purchase of Whole Foods.

And, for your listening pleasure, I spoke with Marketplace's Kai Ryssdal about Facebook's moves toward private messaging.

1 big thing: Time to throw out the old privacy rulebook

An animated image of multiple privacy policies
Illustration: Rebecca Zisser/Axios

Privacy policies have been the standard approach to online privacy for the entire existence of the commercial internet. Now key Democrats are souring on them, Axios' David McCabe reports.

Why it matters: Moving away from relying on the so-called "notice and consent" requirements would be a sea change for users and could put the U.S. at odds with Europe's sweeping privacy regulation.

How it works: Internet users experience "notice and consent" daily.

  • They sign up for a service and are presented with a privacy policy. That's the notice.
  • Then they offer their consent by clicking on "I agree," whether they've read the document or not.

Democrats say that system just isn't enough anymore.

  • House Energy and Commerce Chairman Frank Pallone said at a hearing last week that we "can no longer rely on a 'notice and consent' system built on such unrealistic and unfair foundations."
  • “We need to find solutions that take the burden off the consumer and put some responsibilities on those who want our data,” said Rep. Jan Schakowsky, who chairs the consumer protection subcommittee of the panel.

Driving the news: Consumers don't read privacy policies before consenting to data collection — yet they're bringing more and more connected devices into their lives.

  • "Ten years from now, your toaster’s going to be connected to the internet. Your keys are going to be connected to the internet," said Sen. Brian Schatz at the Commerce Committee hearing.
  • The current system would then leave consumers with "hundreds of microdecisions every day that you’re supposed to achieve informed consent about," he said.
  • More than half of American adults usually or always agree to online privacy policies without reading them first, according to a recent Axios-SurveyMonkey poll.

While lawmakers are unlikely to abandon the notice and consent framework entirely, they're saying it needs to be bolstered by more explicit prescriptions for how services can collect, use and store consumer data.

  • They could lay out prohibitions in a new law, or give the Federal Trade Commission more authority to make rules and guide them in the direction of the type of conduct they wanted to prohibit.

Yes, but: Some conservatives say lawmakers shouldn't be too prescriptive in regulating privacy, or give regulators new broad authority to make their own rules.

  • Europe is also heavily invested in the notice and consent approach, which forms the backbone of the General Data Protection Regulation that went into effect last year and has become the de facto global standard.

What they're saying: "The apparent congressional shift away from notice and consent is important," said Paul Gallant, an analyst at Cowen Washington Research Group who noted the trend in a note last week.

  • "Replacing that with categories of data practices that are simply off limits for companies could be a major change," he added.

Go deeper: David has more here.

2. Dems dig into alleged White House merger meddling

Sen. Chris Van Hollen.
Sen. Chris Van Hollen. Photo: Astrid Riecken/Getty Images

Democratic Sen. Chris Van Hollen has asked U.S. Attorney General William Barr to investigate whether President Trump "improperly tried to influence" recent media merger reviews, Axios' Sara Fischer and David report.

Why it matters: This follows other requests from Democrats for more information after a New Yorker report alleged the president ordered his former chief of staff and top economic adviser to ensure the Justice Department sued to block the AT&T-Time Warner deal.

  • House Judiciary chairman Jerrold Nadler and Rep. David Cicilline sent letters to DOJ Antitrust Division chief Makan Delrahim and White House counsel Pat Cipollone, asking them to produce documents linked to the case.

Details: In a letter to Barr obtained by Axios, Van Hollen asked the DOJ to investigate not just whether Trump had meddled in the AT&T deal but if he or White House officials had made "formal or informal inquiries encouraging the Department of Justice to approve or expedite the Disney/Fox merger."

  • Jane Mayer's New Yorker article detailed the close relationship between the White House, Fox News and Fox chairman Rupert Murdoch, whose properties compete with Time Warner.
  • Van Hollen said in an interview he wasn't "suggesting that the findings from DOJ in AT&T were wrong" but that it was important "to understand whether or not the White House interfered with the decision."
  • In the letter, he asked that the investigation and subsequent report be made public to the American people "to reassure them of the executive branch’s integrity and your agency’s independence."

The big picture: Democrats, now with a majority in the House, have ramped up investigations into the White House on several fronts.

What's next: At this point, Van Hollen said he doesn't know how Congress would proceed if the effort unearths political interference with either deal.

  • Van Hollen says that his Republican colleagues will say privately that they’re broadly concerned about White House interference at the DOJ, "but that doesn’t mean they're willing to do anything about it."

3. Tech pushes hard for national LGBT rights law

IBM CEO Ginni Rometty
IBM CEO Ginni Rometty.: Photo: Justin Sullivan/Getty Images

Tech companies are leading a broad push designed to convince Congress to pass the Equality Act, which would extend a number of civil rights protections to lesbians, gays, bisexual and transgender Americans.

What's happening: As first reported by Axios, IBM CEO Ginni Rometty, speaking on behalf of the Business Roundtable group of large employers, wrote a sharply worded letter urging passage of the bill.

  • In addition, the Human Rights Campaign has collected support from more than 160 businesses, many from the tech industry, urging the bill's passage.

Background: The Equality Act would amend several existing federal civil rights laws to prohibit discrimination on the basis of sexual orientation or gender identity, offering protection in areas ranging from employment and housing to credit and public accommodations.

Rometty writes...

"As employers, America's leading companies know that our economy works best when our employees can be who they are, without fear of bias, discrimination, or inequality — in the workplace or in their communities."

Between the lines: The letter, addressed to Rep. David Cicilline and Sen. Jeff Merkley, notes that most large businesses have already added nondiscrimination policies protecting LGBTQ workers from discrimination.

  • "We can control what happens in our workplaces but that’s not enough," IBM government affairs VP Chris Padilla tells Axios. "Employees need to be protected not just in the workplace but in society in general."

Who's on board: The HRC letter is a who's who of the tech industry, including Amazon, Apple, Facebook, Google, Intel, and Microsoft among many others. Also on the list are companies from other sectors, including American Airlines, Bank of America, Coca-Cola, Hershey, Kellogg, Marriott, Procter & Gamble and Target.

Who's not on that list: While AT&T and T-Mobile US are listed, Sprint and Verizon are not.

The bottom line: Despite some bipartisan support and significant corporate backing, the bill faces a challenge given Republican control of the Senate and White House.

4. Lush is developing a "digital bath bomb"

A prototype of Lush's digital bath bomb.
Photo: Lush

When you think of cosmetics firm Lush, you might think of lots of adjectives, but high-tech probably isn't one of them.

What's new: The British company is looking to change that, starting with a "digital bath bomb" it hopes to introduce before the holidays.

Details: The device wouldn't replace its signature scented balls of bicarbonate, but rather augment a soaking or shower with sights and sounds. Think waterproof speaker meets Hue light bulb, says Adam Goswell, who heads tech R&D for Lush.

  • The digital bath bomb likely won't come cheap, Goswell adds, noting that the company wants it to be high quality and eco-friendly.

Lush showed a prototype to consumers and is now going back to the drawing board to tweak the product based on feedback.

What's next, per Goswell: Lush is looking for other ways to incorporate technology, particularly if it can aid the company's overall environmental goals.

  • One big effort aims to let customers scan their products to get more information on ingredients rather than use added packaging.
  • The challenge is to improve machine learning enough that it can recognize the company's handmade products.
  • It's working with Google and others and this week plans to get feedback from customers and influencers at a pop-up store at SWSW.

5. Take Note

On Tap

  • RSA Conference wraps up in San Francisco.
  • SXSW kicks off in Austin and runs through March 17.


  • The government is re-evaluating Elon Musk's security clearance after he smoked pot in a television interview. (Bloomberg)
  • Airbnb is buying HotelTonight for an amount close to its most recent valuation of around $463 million. (Axios)
  • Facebook says it will limit exposure of, but not remove, anti-vaccination content. (TechCrunch)
  • Okta is buying Seattle-based Azuqua for $52.5 million. (GeekWire)
  • T-Mobile US is promising fast 5G home broadband over the next few years if regulators approve its proposed deal to buy Sprint. (The Verge)

6. After you Login

The Queen of England has made her first Instagram post — and it has to do with coding. (Thanks to Axios colleague Shane Savitsky for spotting this.)