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1 big thing: Washington's new tech target is fake products

Illustration: Aïda Amer/Axios

The growing online trade in copycat goods is a new target in Washington's war on Big Tech, as policymakers pressure companies like Amazon to take more responsibility for what happens across their platforms, Axios' Margaret Harding McGill reports.

The big picture: The spotlight on counterfeit goods is part of a broader push by lawmakers to use policy levers to hold tech companies accountable for real-world harms that result from users' online actions.

Driving the news: Lawmakers want to crack down on the sales of fake products online, with two House committees raising the issue this week.

  • The leaders of the House Judiciary Committee on Monday introduced the "SHOP SAFE" Act, which would hold online marketplaces responsible for trademark infringement if they don't take steps to stop third parties from using their platforms to sell counterfeit goods with a health or safety risk.
  • Those steps include verifying sellers' identity and contact information; screening for counterfeits; removing a seller that has repeatedly listed or sold counterfeit goods; and sharing sham sellers' information with law enforcement and the owners of any brand being impersonated.
  • The bipartisan bill is specifically focused on goods that could harm consumers, with lawmakers noting that baby formula, chargers, and car seats are among the life-threatening fakes available online.

Separately, the House Energy and Commerce consumer protection subcommittee on Wednesday will hear from Amazon, eBay, Apple and others in a hearing focused on fake and unsafe products sold online.

  • Apple senior director for intellectual property Jeff Myers said in written testimony that one analysis of 400 fake iPhone power adapters found that 99% failed basic safety tests. He argued marketplaces should do a better job of vetting sellers and permanently removing repeat offenders.
  • In written testimony, Amazon's Dharmesh Mehta outlined the e-commerce giant's actions against counterfeit goods, including "Project Zero," which allows brands to remove counterfeit listings directly without having to flag them to Amazon for review.
  • Consumer Reports' David Friedman outlined investigations into dangerous inclined sleepers for infants, children's toys and motorcycle helmets sold online in testimony ahead of the hearing.

Context: The Trump administration in a January report said it would step up enforcement against counterfeit goods and urged the private sector to follow "best practices," including enhanced vetting of sellers.

  • E-commerce platforms must "assume greater responsibility, and therefore greater liability, for their roles in the trafficking of counterfeit and pirated goods," the report from the Department of Homeland Security concluded.
  • The report notes the value of infringing goods seized by U.S. authorities increased from $94 million in 2003 to $1.4 billion in 2018.

The bottom line: Policymakers are already talking about updating federal law to hold tech companies more responsible for what happens on their platforms. The focus on counterfeits marks another front in that push.

2. Coronavirus drives more disruption

Tuesday was another day of the coronavirus causing more event cancellations.

Why it matters: It's looking like most big tech events will be postponed or canceled for the coming couple months, creating new work patterns for an industry that thrives on gatherings.

Driving the news: Among the latest round of cancellations and pullouts:

  • Google scrapped the in-person version of its I/O developer conference, saying it would come up with some sort of digital replacement.
  • Lesbians Who Tech postponed its San Francisco Summit until August.
  • Intel, Mashable and TikTok joined Facebook and Twitter in pulling out of SXSW, but organizers continue to insist the Austin gathering — due to start March 13 — will go on.
  • A number of tech firms, including Amazon, Intel, Cisco and Salesforce, pulled out of HIMSS, the big medical tech trade show slated for next week in Orlando. (Amazon also confirmed that a worker at its South Lake Union campus in Seattle has tested positive for COVID-19.)

Meanwhile: Google and Microsoft both said they are offering free versions of workplace communications software to help businesses deal with travel limits.

  • Google CEO Sundar Pichai said the company is providing its G Suite customers with free access to its Hangouts Meet video conferencing tool, through July 1.
  • Microsoft is globally extending an offer of a free six-month trial for the business version of its Teams collaboration software. It had previously made it available in China. "By making Teams available to all for free for six months, we hope that we can support public health and safety by making remote work even easier," a Microsoft representative told Axios.
  • Constellation Research has a timely series of webinars on how tech companies can deal with a coronavirus-altered landscape, as well as a long (and growing) list of the tech events canceled so far.

My thought bubble: In-person events carry long-term value as attendees share ideas and build deeper relationships. In the short term, though, workers may find that less travel for events helps them focus and be more productive.

3. Justin Kan's legal startup shuts down

Photo: Kimberly White/Getty Images for TechCrunch

Atrium, the tech-infused legal startup, said Tuesday it is shutting down its software operation, leaving 100 people without a job, per TechCrunch. A separate Atrium law firm will continue operations, while the company will return some of the $75 million it raised, the website reported.

Why it matters: Many traditional practices can be improved through a hefty dose of tech, but not every effort to tech-ify traditional operations proves better than its analog analogue.

Kan, who previously founded Justin.TV (which eventually became Twitch and sold to Amazon for nearly $1 billion), told TechCrunch that he learned firsthand that adding tech to a traditional business is not a panacea.

  • "A lot of these companies, Atrium included, did not figure out how to make a dent in operational efficiency," Kan said.

Atrium laid off its in-house lawyers back in January in an effort to focus on software, with some of the lawyers leaving to form the separate legal practice that will continue, TechCrunch said.

4. Big Pharma pushes targeted Facebook ads


Facebook users are seeing more targeted ads from pharmaceutical companies — an ethical gray area for patient data and privacy, the Washington Post reports.

Why it matters: Drug companies don't need to know your medical history to target you for a drug, and seeing a surprisingly relevant medical ad can feel invasive, as Axios' Marisa Fernandez reports.

How it works: Drug companies can use your browsing history, along with your age, gender and location, to figure out health issues you may have and market their treatment.

By the numbers: Pharmaceutical and health care brands spent nearly $1 billion dollars last year on Facebook mobile ads. Their spending has nearly tripled over two years, according to Pathmatics, an advertising analytics company.

Health privacy laws like HIPAA don't address this intersection of drug companies, data brokers and social media networks.

Go deeper: Big Tech's enormous access to patients' health data

5. Take Note

On Tap

  • I'll be busy cancelling a few more trips, apparently.

Trading Places

  • Twilio announced a pair of executive hires, tapping former White House Military Office information security chief Steve Pugh as chief security officer and Appirio co-founder Glenn Weinstein as chief customer officer.

ICYMI

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