Articles Posted in Government

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The Eliminating Abuse and Rampant Neglect of Interactive Technology (“EARN IT”) Act is a proposed bill that is designed to permit government agencies scan online messages and prevent child sexual exploitations. It is meant to force websites remove child abuse images from their platforms. The advocates argue it is necessary to allow the government evaluate online communications for potential violations. They argue that websites should be held accountable for user violations. This law seems to be against encryption which is used to obscure content from the unintended recipient. Encryption technology has been used to protect online privacy by scrambling messages through special algorithms. It can only be deciphered by the intended recipient who has access to the private key. Encryption can be used to securely communicate on the internet but it can also be used for nefarious reasons. That said, the EARN IT Act does not use the term “encryption” in its provisions. The supporting legislators have claimed the proposed statute is not designed to outlaw encryption. Also, it would require websites to adhere to certain best practices that will be implemented by the Attorney General’s Office by selecting a group of law enforcement agents who would impose them.

The EARN IT Act could reduce the protections granted under Section 230 of the Communications Decency Act (“CDA”) which provides a certain level of immunity for online service providers. Now, the immunity is not absolute but it is not very far from it. It protects online service providers (a/k/a “interactive computer service providers”) from user violations. For example, if the user engages in conduct that constitutes invasion of privacy of another person, the website would be shielded from legal liability. So, the victim could not file a lawsuit against the website for the user’s violations. However, the following three exceptions apply: (1) federal criminal activity and obscene material; (2) intellectual property violations; and (3) sex trafficking. In fact, 47 U.S.C. § 230(e)(1) prohibits obscene material and sexual exploitation of children. Moreover, 47 U.S.C. § 223 prohibits the transmission of lewd, lascivious, filthy, or indecent messages to a person under the age of eighteen. The CDA prohibits online service providers from sexual exploitation of minors, sex trafficking, or promotion of prostitution in jurisdictions where it is illegal. In other words, interactive computer service providers cannot facilitate these activities on their platforms. In Reno v. ACLU, the Supreme Court evaluated the CDA and its relevant provisions. It found that the CDA criminalized protected speech – e.g., sexually explicit speech – and unprotected obscenity.

The EARN IT Act has been compared to the Fight Online Sex Trafficking Act (“FOSTA”) and Stop Enabling Sex Trafficking Act (“SESTA”) which were passed to fight against online sex trafficking by making websites criminally liable for user content. These federal statutes caused several websites, including, but not limited to, Craigslist and Backpage to remove pages or be completely shut down. So naturally, critics have argued that they promoted online speech censorship and prevented people who engaged in consensual sex work. Yet, if the proposed bill passes legislation, it could open the floodgates for lawsuits against technology companies.

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Free speech and censorship laws have clashed for a very long time in this country. On one hand, we have the constitutional right to free speech. On the other hand, there are limitations that can be applied on a case-by-case basis. In short, speech can be censored if it includes obscenity, child pornography, or the incitement of imminent lawless action. The Supreme Court has faced a multitude of cases in these contexts. For example, in Schenck v. United States, the court ruled that freedom of speech does not include the right to incite actions that would harm others. In Roth v. United States, it held that it is unlawful to make or distribute obscene materials. In United States v. O’Brien, it held that it is unlawful to burn draft cards as an anti-war protest. In Hazelwood School District v. Kuhlmeier, it ruled that it is unlawful to permit students to print articles in a school newspaper over the objections of the school administration. In Bethel School District #43 v. Fraser, the court held that it is illegal for students to make obscene speech at a school-sponsored event. Furthermore, in Morse v. Frederick, it held that students cannot advocate illegal drug use at a school-sponsored event. The point is that even though there are a vast amount of constitutionally-protected rights, yet there are certain limitations.

How does the First Amendment apply to private social media platforms?

The First Amendment is designed to limit government agencies from encroaching upon its citizen’s rights. In recent years, private social media platforms – e.g., Facebook, Twitter, Instagram – have had discretion to limit, control, or censor online speech of their users. It is certainly arguable that the state and federal constitutions should also apply to private social media platforms because truth and falsity have always clashed with each other during the course of history. There are several schools of thought that analyze free speech rights based on the freedom of expression. First, one idea is that government should not change or alter the marketplace of ideas with censorship. Second, the other idea is that people should have the liberty to express themselves in society without reservation. So, if the social media platforms are granted censorship rights, then it would prevent liberty and growth. Now, more recently, in Packingham v. North Carolina, the Supreme Court acknowledged the fact that speech is taking place on social media platforms more than anywhere else. As such, the State Action Doctrine’s application should be reevaluated by the legislators.

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This article has been prepared to discuss the legality of online gambling and the relevant rules and regulations. These laws affect individuals, businesses, startups, and entrepreneurs as they’ve recently expressed their interests in this topic. Therefore, we will discuss the relevant state and federal laws.

It’s important to note that in Murphy v. NCAA, the Supreme Court struck down the Professional and Amateur Sports Protection Act (“PASPA”) and granted the states the right to regulate sports gambling within their own jurisdictions. In general, placing an online wager is legal but it should not be placed on a website that is located in the United States. In other words, the gambling website and its owner must not reside or do business within the United States and its territories. So, for this reason, individuals may run into contradictory state laws which will be referenced here.

What are the state laws?

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Both California and the federal government have enacted statutes that regulate arbitration agreements and awards. The Federal Arbitration Act (FAA) and California Arbitration Act (CAA) are similar in many aspects but they have differences that can sometimes lead to conflict. Other state and federal statutes can also conflict with the FAA. Under the Federal Preemption Doctrine, provisions of state law that directly conflict with a federal statute are invalid or unenforceable. The U.S. Supreme Court has issued several rulings in recent years about preemption of state laws, and even other federal laws, by the FAA. The Supreme Court has also identified situations in which the CAA can apply instead of the FAA.

Federal Preemption Doctrine

The Supremacy Clause, found in Article VI, clause 2 of the U.S. Constitution, states that federal law is “the supreme Law of the Land.” The preemption doctrine is intended to guide courts in determining when federal law supersedes state law. In a 2009 decision, Wyeth v. Levine, the Supreme Court expressed its “assumption” that preemption would not occur “unless that was the clear and manifest purpose of Congress.” Whether the court has always strictly held to this principle is a matter of some disagreement.

The U.S. Supreme Court Finds Preemption by the FAA

In 2017, the Supreme Court decided Kindred Nursing Centers Ltd. v. Clark, which involved a challenge to mandatory arbitration clauses signed by individuals with powers of attorney on behalf of elderly nursing home residents in Kentucky. Under Kentucky law, according to the Supreme Court, “the rights of access to the courts and trial by jury [is considered] to be ‘sacred’ and ‘inviolate.’” State courts ruled the arbitration agreements to be invalid. The Supreme Court found the state court rulings to be invalid under § 2 of the FAA, which states that arbitration agreements are only subject to challenge under “such grounds as exist at law or in equity for the revocation of any contract.”
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When the government needs to acquire private property for public use, it can do so through a procedure known as eminent domain. The Fifth Amendment to the United States Constitution prohibits the government from taking property from a private individual or business “without just compensation.” Eminent domain is intended to provide a means of determining fair compensation. When the government exercises eminent domain over real property that is subject to a lease, both the property owner and the lessee are entitled to compensation. A California appellate court recently ruled on a dispute between a former property owner and its former tenant in the aftermath of an eminent domain proceeding. The court’s decision addressed the various types of property that can be involved in an eminent domain or other condemnation action.

Eminent Domain in California

The California Eminent Domain Law (EDL) limits the government’s use of eminent domain to situations in which it needs private property for public use. If a civil action for eminent domain is necessary, the government must name all owners of record as defendants along with anyone else the government knows “to have or claim an interest in the property.” This includes individuals or businesses that occupy the property under a lease.

Condemnation Clauses in California Commercial Leases

A lease creates a real property interest for the lessee who is also known as the tenant. When real property is primarily used for commercial leasing purposes, lessees often stand to lose the most in eminent domain since they are the ones who will be displaced by the procedure. Therefore, many leases contain condemnation clauses, which address matters like the distribution of compensation if the property becomes unavailable or unusable because of government actions like eminent domain.
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Isaac Asimov’s three laws of robotics are important factors in the development of artificial intelligence laws. They are as follows:

  1. First Law: A robot may not injure a human being or, through inaction, allow a human being to come to harm.
  2. Second Law: A robot must obey the orders given it by human beings except where such orders would conflict with the First Law.
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This week’s article explores the European Union’s brewing copyright law and its possible effects on the internet.  Proponents intend for the law to modernize and suit copyright law for the digital age.  Critics say the law will make the internet substantially less free.  Today we discuss the Directive on Copyright in the Digital Single Market, and more specifically, three of its most recently approved provisions that could pose problems to internet freedom: its right for press publishers, its filtering obligations, and its text-and-data-mining stipulations.

The law’s right for press publishers would allow news companies to collect compensation when their stories are shared on social media platforms.  Known as the “link tax,” it would require platforms to purchase a license to post current-events information coming from news institutions.  Current copyright law already protects journalistic articles as literary works; republishers must ask permission to use such content.  The proposed right, however, effectively expands this protection to data and facts that have already been published. Whereas only creative descriptions or puns in headlines are now protected, mere non-creative fact could be too; this would effectively hold information for ransom.  The purpose of copyright law is to grant a limited monopoly over specific creative works and original ideas.  To extend the law to envelop full ideas or factual content is nonsensical, and stymies the very processes copyright is meant to assist.  Rather than foster innovation by protecting its fruit, the law would chill it by stealing its raw material.  It would obstruct citizens from running businesses and from creating original products using factual information.  In a region without the First Amendment, there is cause for concern.

The law’s filtering provision would require all website hosting providers to use filtering software that checks content against a database of copyright material.  As the law stands, platforms such as YouTube, Facebook, and Twitter are not liable for the copyright infringement of their users, as long as when they are notified of it, they take it down.  The users who post it, however, are still liable to authors or authorship-rights holders.  The current law attempts a balance between honoring the investment of creative authors and promoting innovation through the spread of information.  The “notice and takedown” process allows rights holders to notify the platform, requires that the platform take action but only once it’s told, and reminds users that they may ultimately be held accountable for infringement; this spreads liability out somewhat evenly. The proposed version would subject this process to automation.  This would nominally place the majority of liability on platforms by forcing them to monitor content proactively.  However, the users and their speech will feel the brunt due to the platforms’ much stricter resultant guidelines.  The arbiter of this would be a machine, checking content against a copyright database, which would include factual material.  The necessary software also doesn’t exist—allowed uses of copyrighted content like parody or criticism would be at risk because artificial intelligence cannot distinguish them from infringement.  This imperils important content such as university lectures, for example.

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In the accelerating information frenzy of the modern world, the specter of hacking has become more threatening as technology progresses.  For example, information is more accessible and vulnerable especially when it is valuable. Public and private institutions rely heavily on electronic communications and storage, which raises the stakes of a transgression.  Currently, there are legal barricades and consequences for accessing or exploiting another individual’s digital information without permission, but most are defensive, and some are largely ineffective.  The need for hacking countermeasures has been introduced and debated, but not satisfied.  International cooperation has largely helped, but is ultimately undergirded by political motive rather than principle.  To a degree, the law remains irresolute as to how to best combat online hacking and similar misconduct.

The federal government has exacted large punishments for hacking computer systems without authorization.  It defines “hacking” as accessing a computer without authorization or exceeding one’s authorization access, obtaining information that the United States government determines to be classified for reasons relating to national defense or foreign relations, or willfully communicating or attempting to communicate the information to any foreign nation, or willfully retaining the information and failing to deliver it to the officer or employee of the United States entitled to receive it.  It can be punished as a misdemeanor or a felony depending on the circumstances, resulting in a up to one year in prison and a $100,000 fine or up to ten years and $250,000, respectively.

So, hacking private companies or individuals can yield similar consequences.  Private companies are no strangers to cyberattacks.  In recent years, though, the scope of offense has broadened from companies contracted with the government or armed forces, to victims as diverse as movie studios and financial institutions.  As it stands, businesses have limited avenues to justice.  They may monitor, take defensive action, and fix whatever damage they incur on their own.  A Congressional bill recently drafted aims to allow businesses to “hack back” legally.  This can mean anything from simply tracing an attack, to identifying the attacker, to actually damaging the attacker’s devices.  However, the bill in its current form is discouragingly vague, and a company’s misstep could risk violating the same laws that were meant to protect it.  So, companies may be unwilling to take that risk.  Another criticism of the bill is that it does little to protect innocent third parties from retaliation where their systems might simply have been hijacked in a hacker’s scheme.  This concern is exacerbated by vagueness in the bill’s language allowing retaliation against “persistent unauthorized intrusion.”

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On April 10, 2018, Mark Zuckerberg, founder and chief executive of Facebook, took a chair beneath an array of Senators to answer for the uneasiness his company’s behavior had been giving the public.  The testimony comprised a broad variety of concerns – from user privacy to election meddling, to misinformation and an alleged bias in combatting it. The latter concern has fascinating legal implications we will discuss today.

More pointedly speaking, allegations that the large social media companies’ community guidelines have been enforced selectively have sparked a public controversy.  The accounts of some particularly controversial speakers, for better or worse, have been shut down, and others report that the volume of exposure their content gets has suddenly dwindled.  Pundits, for the most part on the right wing, have strongly condemned the companies, and ensuing arguments tend to hit all the philosophical tenets of the classical debate over free speech.

The First Amendment does not ensure anyone’s place on a private platform; it only restricts the government from discriminating with regard to speech, including, but not limited to, hate speech.  For the most part, it is left to market pressures to correct any perceived bias or wrongdoing on the part of the social media companies.  There are other areas of the law, however, that social media companies have some potential to run afoul of.  Critics and commentators have brought up both antitrust law and publishing law issues.  Although, there is debate over the likelihood that companies like Facebook infract upon either, yet the potential does exist.

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Most, if not all, of our readers are familiar with e-commerce websites and related transactions.  Notably, Amazon.com’s empire, as well as other forms of e-commerce such as iTunes subscription services or purchasing an e-Book are part of these transactions.  In recent news, one of China’s largest e-commerce websites is being sued in the United States for selling counterfeit and knock-off products. Shares of the company, Pinduoduo, plummeted after news of the lawsuit was made public.  Currently, six law firms are in the process of filing class actions on behalf of investors who purchased shares of Pinduoduo.  The company went public in the United States earlier this year, raising over $1.6 billion from investors. Pinduoduo is traded on NASDAQ under PDD, and currently has a $25 billion market cap.

Pinduoduo is known for combining online shopping with entertainment. It was founded in September 2015 by Colin Guang, a former Google employee.  As of now, however, the company has faced an influx of negative media in China, with claims that the platform sells knock-offs of major brand names. This selling of fake goods could give investors standing to sue.  If the investors were misled, and invested because of the false information, they will have a cause of action under the federal securities laws. Executives of companies, and insiders who communicate information to investors about a company, have a duty not to make any misleading or materially false statements about the company.  This includes information about the financial health of the business.

Started only three years ago, Pinduoduo had 295 million active users and 4.3 billion total orders in 2017.  China is the largest online retail market, with other e-commerce names such as Alibaba and JD.com.  Pinduoduo sells groceries, electronics, clothing, and household items, among other things.  While Amazon may be the number one e-commerce website in the United States, Pinduoduo is the second larges e-commerce website in China behind Alibaba.

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