Week in Review

IN THE NEWS

• The U.S. Department of Justice sued to block California’s net neutrality law, claiming that only the federal government can regulate the Internet under the U.S. Constitution’s Supremacy Clause. “The California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy,” Attorney General Jeff Sessions said. Columbia Law School Professor Tim Wu described the dispute as a “fundamental question of federalism”—whether states can “fill in gaps” left by the federal government’s repeal of net neutrality regulation.
• The U.S. Senate passed the Cybersecurity and Infrastructure Security Agency Act, establishing a cybersecurity agency within the U.S. Department of Homeland Security (DHS). The agency would be called the Cybersecurity and Infrastructure Protection Agency and would include three divisions handling cybersecurity, infrastructure security, and emergency communications. DHS Secretary Kirstjen Nielsen stated that DHS is “responsible for federal efforts” to protect critical infrastructure, and she stressed the need to “streamline the organization so that we can become more operational.”
• The U.S. Securities and Exchange Commission announced a settlement with Elon Musk, co-founder and CEO of Tesla, on securities fraud charges stemming from a tweet that falsely claimed Musk had secured funding to take Tesla private at $420 per share. The settlement required Musk and Tesla to pay a fine of $20 million each, mandated stricter oversight of Musk’s communications, and removed Musk as Tesla’s chairman.
• A federal judge blocked the Trump Administration from ending Temporary Protected Status (TPS) for migrants from El Salvador, Haiti, Nicaragua, and Sudan. Judge Edward Chen of the U.S. District Court for the Northern District of California wrote that “TPS beneficiaries and their children indisputably will suffer irreparable harm and great hardship” if TPS were terminated. DHS Secretary Kirstjen Nielsen previously justified the termination by reportedly saying that she was bound by law to do so and that it was “Congress’s job” to give permanent status to those covered.
• The U.S. Environmental Protection Agency released a draft proposal of a rule regulating hydrofluorocarbons—greenhouse gases used in refrigeration and air conditioning that contribute to global warming. The proposal would remove a section of the rule added by the Obama Administration that highlighted the effects of climate change on vulnerable populations, including how “children’s unique physiological and developmental factors contribute” to their vulnerability.
• California Governor Edmund G. Brown (D) signed into law a bill that would require every publicly held corporation with executive offices in California to have “a minimum of one female director on its board” by the end of 2019. The California Chamber of Commerce opposed the bill as an “unconstitutional” civil rights violation, but Brown stated that it was “high time” that corporate boards “have a representative number of women.”
• The United Kingdom’s Financial Conduct Authority (FCA) fined Tesco Bank £16.4 million for failing to adequately protect its account holders from a 2016 cyberattack. The perpetrators of the attack likely used an algorithm to create debit card numbers that enabled them to steal £2.26 million over the course of two days. “The fine the FCA imposed on Tesco Bank today reflects the fact that the FCA has no tolerance for banks that fail to protect customers from foreseeable risks,” Executive Director of Enforcement and Market Oversight Mark Steward said.
• The Campaign for a Commercial-Free Childhood (CCFC) alleged that Facebook Messenger Kids, a messaging service for children under 13, violates federal privacy law in a complaint to the Federal Trade Commission. The CCFC accused Facebook of using Messenger Kids to collect personal information from children without verifying the consent of their parents and without informing parents of Facebook’s data practices—in violation of the Children’s Online Privacy Protection Act (COPPA). Meanwhile, Facebook Messenger Kids states on its website that it complies with COPPA.
• The Universal Recycling Ordinance (URO) in Austin, Texas took effect this week, requiring restaurants and other food service establishments to “divert discarded organic material, such as food scraps or soiled paper products, from landfills.” Diversion methods include food donations and composting, and the city has scheduled free URO training sessions for business owners and managers.

WHAT WE’RE READING THIS WEEK

• In an article for the Stanford Technology Law Review, Professor Ignacio Cofone of McGill University Faculty of Law argued that robots and other artificial intelligence (AI) entities require a novel regulatory framework. Cofone posited that AI entities should be assigned rights and responsibilities according to their ability to affect the world around them, the foreseeability of their behavior, and the level of empathy they generate in people. Moreover, Cofone emphasized, AI entities should be regulated not strictly as objects or as people but evaluated on a “continuum between tools and humans.”
• The Federal Communications Commission (FCC) should regulate interconnection—links among networks that constitute the Internet—by monitoring for unfair business practices, argued Daniel Lyons of Boston College Law School in an article for the Boston University Journal of Science and Technology Law. If it detects unfair business practices, the FCC can then compel private parties like Netflix and Comcast to negotiate a fair price. But the FCC should avoid requiring public disclosure of interconnection agreements, Lyons argued. Doing so could raise prices either by encouraging “tacit price collusion” or by increasing compliance and litigation costs.
• In an article for the Berkeley Journal of International Law, Michele Krech of the New York University School of Law discussed how administrative law principles apply to regulation of the gender binary in international athletic competitions. She focused on the case of Indian sprinter Dutee Chand, who had been disqualified from competitions due to the level of “naturally-occurring testosterone in her body.” Chand’s successful challenge of the rule setting testosterone limits—which was created by the International Association of Athletics Federations—showed “that a system of checks and balances constrains the IAAF’s regulatory authority to impose binary sex classifications.” Further, Krech stated that the IAAF would have to pass any new rule concerning the gender binary in a transparent manner.