Today: FTC Event to Address Innovation and IP Policy, US Congress Digital Goods Act, US Senate Commerce Committee Leaders Seek Google+ Memo on Vulnerability
FTC Event to Address Innovation and IP Policy
FTC announces agenda for its fourth session of hearings on competition and consumer protection in the 21st century. The hearings will be two full days held at the FTC in Washington D.C. on October 23-24, 2018. The event will examine the role of intellectual property in promoting innovation from academic, economic, and industry perspectives. The sessions also will examine emerging trends in patent quality and litigation, and will include the FTC’s first wide-scale exploration of copyright issues. See detailed agenda.
Among other things, the FTC invites public comment on these issues, including on the questions listed below. Comments can be submitted electronically no later than December 21, 2018.
- Is there a role for the government in advancing or supporting innovation?
- What is the importance of intellectual property – all forms – in advancing, protecting, and supporting innovation? Does it differ because of industry-specific or other market-based factors, or because of the form of intellectual property?
- How does modern economic analysis and empirical literature view the relationship between intellectual property and innovation, and the role of government in advancing and supporting innovation? Are there differences that depend on the type of intellectual property, and the protections offered for that intellectual property?
- How can the FTC use its enforcement and policy authority to advance innovation? What factors should the FTC consider in attempting to achieve this objective?
US Congress Digital Goods Act
U.S. Sens. John Thune (R-S.D.), a member of the Senate Finance Committee, and Ron Wyden (D-Ore.), reintroduced legislation to prevent discriminatory and duplicative taxes on digital goods and services, including online downloads of music, literature, movies, mobile apps, and cloud computing services. A companion version of this legislation is expected to be introduced in the House of Representatives as early as tomorrow.
The Digital Goods and Services Tax Fairness Act (S. 3581) provides some “rules of the road” for taxing digital goods and services and establishes a framework across multiple tax jurisdictions. The bill prohibits state and local governments from applying taxes to those products that do not apply to similar tangible goods, as has been the law since Congress made the Internet Tax Freedom Act permanent law in 2016. For example, a state or local tax jurisdiction cannot simply apply a tax on an electronic newspaper subscription if it does not apply the same tax to a physical newspaper. As digital goods and services move from one tax jurisdiction to another across the internet, the legislation also prevents state and local tax jurisdictions from imposing multiple taxes on consumers. Instead, the bill requires that when legitimate taxes are imposed on a digital product, a tax jurisdiction can only impose them on the final customer or end user. Without this provision, the retailer in one state can be taxed on a product or service, as can the consumer in another state. If that consumer is traveling in a third state, all three states could conceivably claim the right to tax the downloaded product or service. These stacked taxes create an unlevel marketplace and can raise the final prices on digitally enabled commerce.
More information is available here.
“While today’s digital marketplace is evolving as rapidly as the day-to-day consumers who rely on it for digital products like music, books, movies, streaming services, or other popular apps, federal law lags far behind,” said Thune. “As a result, some consumers can be taxed multiple times on a single digitally delivered product or service by different tax jurisdictions. In some cases, these digital goods and services also can be subject to higher rates than would apply if the consumer bought them in a brick and mortar store. Our bipartisan legislation simply prevents this duplicative and discriminatory taxation, which will help ensure today’s digital economy isn’t held back unnecessarily and can continue to offer opportunities to entrepreneurs and consumers alike.”
“Preventing unfair taxes on music, books and other important goods and services benefits consumers and innovators alike,” said Ranking Member Wyden. “This bipartisan legislation solves a 21st century tax riddle by establishing a comprehensive set of rules for states to follow. I encourage my colleagues to support this bill as Senator Thune and I push for its swift passage.”
US Senate Commerce Committee Leaders Seek Google+ Memo on Vulnerability
U.S. Sens. John Thune (R-S.D.), Roger Wicker (R-Miss.), and Jerry Moran (R-Kan.) have sent a letter to Google CEO Sundar Pichai requesting a copy of an internal memo and answers about a security vulnerability placing private user information at risk. According to press reports, the memo advocated against public disclosure of the vulnerability on grounds that it would attract the potential attention of regulators and Congress. The letter requests various information from Google by September 30, 2018, including the following:
Detailed information on when and how Google became aware of this vulnerability and what actions Google took to remedy it.
- Whether, if it finds evidence of misuse of profile data as a result of this Google+ vulnerability in the future, it will promptly informing the Committee, required law enforcement and regulatory agencies, and affected users?
- Why Google choose not to disclose the vulnerability, including to the Committee or to the public, until many months after it was discovered?
- Did Google disclose the vulnerability to any federal agencies, including the Federal Trade Commission (FTC), prior to public disclosure?
- Are there similar incidents which have not been publicly disclosed?
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The Regulatory Mix, Inteserra’s blog of telecom related regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of an Inteserra Briefing.
