A Thousand Buckets of Sand in the Gears

Episode 375 of the Cyberlaw Podcast

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Jordan Schneider rejoins us after too long an absence to summarize the tech policy coming out of Beijing today:  In essence, just about any Chinese government agency with a beef against a tech company has carte blanche to at least try it out. From Didi and others being told to stop accepting new users to cutting off Western IPOs, to forced contributions to common welfare, China's beefs with Big Tech sound a lot like those in the West (well, except for conservative complaints about AI-enabled censorship). What's different is that China has freed its agencies to actually throw a thousand buckets of sand in the gears of technology businesses. Jordan and I explore the downside of empowering agencies in this way. First, it makes the Chinese government responsible for an enormous and hard to govern part of the economy, as the government's problems with the overvalued property sector show. And it creates opportunities for companies that are better at politics than customer service to cripple their competitors.

In the U.S. something similar is afoot. Michael Weiner unpacks the new, amended complaint in FTC v. Facebook and concludes that the FTC has done a plausible job of meeting the objections that led the district court to throw out the first complaint. Then he lists several buckets of sand the Biden administration is dumping into technology merger law in the hope of slowing a massive acquisition boom: no longer granting early termination, insisting on future merger approvals in standard consent agreements, issuing "close at your own peril" letters when agencies haven't finished their review, and replacing the Vertical Merger Guidelines issued in June 2020 with, uh, nothing.

Pete Jeydel takes us on a tour of Project Raven and the deferred prosecution agreements imposed on three former U.S. government hackers who sold their services to the UAE and ended up way outside the bounds of U.S. law. The cases raise several novel legal issues, but one of the mysteries is why the prosecutors ultimately settled the cases without jail time. My guess? Graymail.

In quick hits and updates we note that:

  • TikTok faces an Irish General Data Protection Regulation ("GDPR") probe over children's data and – more significantly – its transfers of data to China. What's most remarkable to me is how long TikTok staved off this scrutiny. Who says Donald Trump was bad for Chinese tech companies?
  • President Biden has nominated a 5th Federal Trade Commission Commissioner. Alvaro Bedoya is a Georgetown Law professor who writes about privacy and face recognition. There's a lot of dumb stuff out there about AI bias and face recognition, but I'm pleased to say that it doesn't look as though Prof. Bedoya wrote any of it.
  • The special prosecutor for Russia-Russia-Russia-gate has indicted a Perkins Coie lawyer for lying to the FBI general counsel while turning over a bunch of bogus evidence of Donald Trump's ties to Russia. Turns out, I know all of the principals in this drama; talk about uncomfortable.
  • Captain Obvious, speaking for the FBI, acknowledged that there is "no indication" Russia has cracked down on ransomware gangs after President Biden yelled at Vladimir Putin about them.
  • The 4th Circuit has tossed out Wikimedia's money-wasting lawsuit challenging National Security Agency's collection of overseas intelligence in the U.S.
  • And Bolsonaro's ban on social media censorship of politicians has been doubly overturned, by both the Brazilian Senate and its Supreme Court, leaving Bolsonaro's decree in the same limbo as Florida's (and, probably soon, Texas's) effort to do something similar.

Download the 375th Episode (mp3)

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