Telecommunication

Transforming Access: The FCC’s New Telecommunication Requirements May Enhance Accessibility in Criminal Detention Centers

October 29, 2024
Criminal Law, Human Rights Law, Regulatory, Telecommunication

Peyton Soethout, MJLST Staffer

Continued technological advancements have made it easier for people to communicate with their loved ones worldwide. Criminal detention centers have utilized the rise of this digital age to make the inmate communication process easier for their staff.[1] Although these practices may simplify security and administrative protocols, they also negatively impact inmates’ abilities to effectively communicate with loved ones through traditional mail as oftentimes inmates “receive letters with missing pages and blurry images.”[2] These issues—combined with the COVID-19 pandemic increasing security measures, and the prevalence and popularity of telephones—have caused decreases in written communications between incarcerated and free people and subsequent increases in telecommunication.[3]

While traditional mail has become less reliable, criminal detention centers’ use of video and audio telecommunications is not without issue. Challenges with telecommunication technology are especially difficult for inmates who have communication disabilities, which include deafness, hard of hearing, blindness, low vision, deafblindness, speech disabilities, or other disabilities that affect communication.[4] Despite technology advancing outside detention facilities, many jails and prisons primarily rely on out-of-date devices for their telecommunication needs.[5] The reliance on out-of-date technology greatly impacts inmates with communication disabilities because they heavily rely on technology to communicate with others.[6]

Congress has attempted to mitigate these challenges through various legislation. Together, the Rehabilitation Act of 1973 and the American Disabilities Act (“ADA”) require prison and jail officers to “avoid discrimination; individually accommodate disability; and maximize integration of prisoners with disabilities with respect to programs, service, and activities.”[7] These statutes provided the first step in equal communication opportunities for all inmates, but they left two questions: (1) who decides which inmates receive communication accommodations; and (2) what specific technologies are required for this communication access.[8]

The Federal Communications Commission (“FCC”) made efforts to address prison telecommunication issues but their attempts were ultimately quashed in 2017 as courts found the FCC only had authority to address interstate calls, not intrastate calls.[9] In 2022, Congress passed the Martha Wright-Reed Just and Reasonable Communications Act (“Martha Wright-Reed Act”) which amended the Communications Act of 1934. It established “any Federal, State, or local law to require telephone service or advanced communications services at a State or local prison, jail, or detention facility.”[10] Because the FCC determined that the Martha Wright-Reed Act “significantly expanded the [FCC’s] jurisdiction over incarcerated people’s communications services,” it promulgated new accessibility requirements for inmate telecommunications.[11]

The new FCC rule requires detention centers to provide text telephones (“TTY”) and telecommunication relay services (“TRS”) to inmates with communication disabilities.[12] TTYs—defined as “machine[s] that [employ] graphic communication in the transmission of coded signals through a wire or radio communication system”—have long been used in jails as a device to assist incarcerated people with communication disabilities, but they have never been explicitly required on a federal level.[13]

Unlike TTYs, the use of TRSs is much more rare. The FCC defines TRSs as “[t]elephone transmission services that provide the ability […] to engage in communication by wire or radio […], in a manner that is functionally equivalent to the ability of a hearing individual who does not have a speech disability.”[14] The new FCC rule also gives examples of certain TRSs such as speech-to-speech relay services (“STS”), and video relay services (“VRS”).[15] Overall, these technologies can significantly decrease challenges presented by general telecommunication devices.[16]

While this rule does an adequate job of addressing what technologies are required for inmate telecommunication access, it does little to address the remaining question: who decides which inmates require telecommunication accommodations. The rule specifies that TTYs and TRSs are for incarcerated people who individually register for communication accommodations, and the rule places registration responsibility primarily on the inmates.[17] Given the historic trend of jail and prison administration, detention facilities’ staff will likely need to organize the registration process and inform inmates of its existence.[18] In the rule proposal, the FCC quotes formerly incarcerated person Kim Thomas who notes, “[i]ncarcerated people with disabilities that impact their ability to communicate continually experience barriers to access because prison administrators fail to understand their communication needs.”[19]

The FCC acknowledges that detention center administrators may lack the knowledge necessary to identify communication needs, and this will likely continue negatively impacting inmates with communication disabilities. Specifically, inmates with communication disabilities may be unaware of the technologies available to them. But even with potential challenges, the FCC’s promulgation of these new requirements is a significant step in the right direction for the future of telecommunication access for inmates with communication disabilities.

Notes

[1] Nazish Dholakia, The FCC Is Capping Outrageous Prison Phone Rates, but Companies Are Still Price Gouging, Vera (Sept. 4, 2024), https://www.vera.org/news/the-fcc-is-capping-outrageous-prison-phone-rates-but-companies-are-still-price-gouging#:~:text=The (“Corrections departments say they have adopted mail scanning to obtain greater control over materials entering their facilities and ensure safety.”).

[2] Id.

[3] Id.

[4] Tessa Bialek & Margo Schlanger, Effective Communication with Deaf, Hard of Hearing, Blind, and Low Vision Incarcerated People, 26 J. Gender Race & Just. 133, 138 (2023).

[5] Id. (referencing Heyer v. U.S. Bureau of Prisons, 849 F.3d 202 (4th Cir. 2017)).

[6] Id.

[7] Margo Schlanger, Prisoners with Disabilities, in Reforming Criminal Justice: Punishment, Incarceration, and Release 301 (E. Luna ed., 2017).

[8] See Farina Mendelson, A Silent Struggle: Constitutional Violations Against the Hearing Impaired in New York State Prisons, 20 CUNY L. Rev. 559, 564–571 (2017) (noting that the New York Department of Corrections had default responsibility to determine which inmates have disabilities as the ADA did not provide such information); Wanda Bertram, FCC Votes to Slash Prison and Jail Calling Rates and Ban Corporate Kickbacks, Prison Policy Initiative (July 18, 2024), https://www.prisonpolicy.org/blog/2024/07/18/fcc-vote/ (claiming that the July 2024 FCC regulations addressed required accessibility technologies for the first time).

[9] Jon Brodkin, Prison Phone Call Fees Are Out of Control. The FCC Can Finally Rein Them In, Wired (July 19, 2024, 8:30 AM), https://www.wired.com/story/prison-phone-call-fees-fcc-caps/.

[10] Martha Wright-Reed Just and Reasonable Communications Act of 2022, Pub. L. No. 117–338, 136 Stat 6156.

[11] Implementation of the Martha Wright-Reed Act; Rates for Interstate Inmate Calling Services, 89 FR 77244, 77244 [hereinafter FCC Notice and Comment]; Press Release, Fed. Commc’n Comm’n, FCC Caps Exorbitant Phone & Video Call Rates for Incarcerated Persons & Their Families: The Martha Wright-Reed Act Empowered the FCC to Close Gaps in the Long-Fought- For Protections Against Predatory Rates (July 18, 2024).

[12] 47 C.F.R. § 64.6040 (2024).

[13] 47 C.F.R. § 64.601(a)(44) (2024); Bialek & Schlanger, supra note 4 at 142. Note that Bialek & Schlanger use “TTY” to refer to teletypewriters which is one example of a TTY under the FCC’s rule. Oftentimes, teletypewriters and text telephones are used interchangeably. For the purposes of this blog post, TTY will be used as defined in 47 C.F.R. § 64.601.

[14] 47 C.F.R. § 64.601(a)(43) (2024).

[15] See 47 C.F.R. § 64.601(a)(41) (2024), which defines STS as a TRS “that allows individuals with speech disabilities to communicate with voice telephone users through the use of specially trained Communication Assistants who understand the speech patterns of persons with speech disabilities and can repeat the words spoken by that person;” and 47 C.F.R. § 64.601(a)(51) (2024), which defines VRS as “a TRS “that allows people with hearing or speech disabilities who use sign language to communicate with voice telephone users through video equipment.”

[16] See Fed. Commc’n Comm’n, Frequently Asked Questions on Telecommunications Relay Services (TRS), Fed. Commc’n Comm’n, (Mar. 1998), https://transition.fcc.gov/Bureaus/Common_Carrier/FAQ/faq_trs.html (explaining the benefits of TTY and TRS access).

[17] See e.g., 47 C.F.R. § 64.6040(c)(4) (2024) (requiring individual registration); 47 C.F.R. § 64.611 (2024) (explaining the registration process).

[18] See Mendelson, supra note 8, at 564 (“[T]he Department is responsible for identifying an inmate’s hearing impairment.”).

[19] FCC Notice and Comment, supra note 11, at 77248–77249 (emphasis added).

Persistent Yet Questionable: FTC’s Journey Regulating Negative Option Marketing in Online Subscription Services

October 17, 2024
Legal Ethics, Regulatory, Telecommunication

Su Young Lee, MJLST Staffer

Online subscription services are increasingly prevalent in society – prevalent enough to catch the attention of the Federal Trade Commission (FTC). On June 17, 2024, the FTC filed a lawsuit against Adobe Inc for the violation of the FTC Act Section 5 and Section 4 of the Restore Online Shoppers’ Confidence Act (ROSCA).[i] These two laws introduce a general legal framework governing online commerce and negative option marketing.[ii] The ROSCA Section 4 prohibits online sellers from conducting a transaction through “negative option feature” unless the seller “clearly and conspicuously discloses all material terms of the transaction” to the consumer.[iii] While the ROSCA is a distinctive law to the FTC Act, the violation of the ROSCA Section 4 is treated as an “unfair or deceptive acts or practices” so constitutes the violation of the FTC Act Section 5.[iv] Furthermore, as it is treated as an “unfair or deceptive acts or practices,”[v] the violation of the ROSCA Section 4 also triggers the FTC Act Section 19, which allows the FTC to “commence a civil action” against the one who violated subjected law.[vi]

In this case, the FTC argues that Adobe did not “clearly and conspicuously” disclose the early cancellation fee during the subscription process, which, therefore, “constitutes an unfair or deceptive act or practice in or affecting commerce.”[vii] Last year, the FTC filed a similar complaint against Amazon concerning the cancellation of Prime memberships; the case is still ongoing.[viii]

The FTC’s action against online subscription policies, specifically their marketing strategy called ‘negative option marketing,’ or ‘dark pattern,’[ix] are not new. Negative option marketing is “a term or condition under which the seller may interpret a consumer’s silence or failure to take affirmative action to reject a good or service or to cancel the agreement as acceptance or continuing acceptance of the offer.”[x] Examples include automatic renewals, continuity plans, free-to-pay or fee-to-pay conversions, and prenotification plans.[xi] The FTC reports negative option marketing to be a “persistent source of consumer harm” by “saddling shoppers with recurring payments for products and services they did not intend to purchase or did not want to continue to purchase.”[xii]

The FTC has pursued action against negative option marketing, especially its use in online subscription services, in recent years. As with Amazon and Adobe, using ROSCA and/or the FTC Act as a legal basis, the FTC has sued numerous online commercial companies with subscription services such as Wealthpress and MoviePass.[xiii] They also published a staff report and policy statement warning of the danger of negative option marketing.[xiv] On April 24, 2023, the FTC even exercised their rulemaking authority and proposed a rule amending 16 C.F.R. part 425 to specifically target the regulation of negative option marketing.[xv] While the proposed rule does not limit the type of applicable media,[xvi] the FTC added the definition of the terms that particularly apply to online subscription services, such as “simple cancellation” and “annual reminders.”[xvii]

Despite their persistence, the effectiveness of the FTC’s efforts is still in question. First, not everyone welcomes the proposed rule. Former Commissioner Christine S. Wilson states that the proposed rule’s scope of negative option marketing is overly broad because it applies to any misrepresentations, even to those irrelevant to negative option terms or policies.[xviii] She also points out that the proposed rule gives the FTC the authority to seek civil penalties under the FTC Act Section 5, which the Supreme Court limited in AMG Cap. Mgmt., LLC v. Fed. Trade Comm’n.[xix] Commissioner Wilson expresses concern that such overreach would put marketers at risk of being liable for monetary penalties even when they fully disclose negative option terms.[xx]

Luckily for those not fond of the proposed rule, the FTC has not yet prevailed in putting the regulation into effect. Even if it becomes effective one day, this new rule will have to survive the unclarified yet heightened standard the recent overruling of Chevron created. The Section 6(a) of the FTC Act, governing the agency’s rulemaking authority, grants the FTC to make a rule that addresses “unfair or deceptive acts or practices.”[xxi] The proposed rule manifests its relation to such authority, as many of its provisions trigger the violation of the FTC Act Section 5, which states that “unfair or deceptive acts or practices” are unlawful.[xxii] On the other hand, no one is sure at this moment whether such manifestations are the sufficient address of ‘unfair or deceptive acts or practices’ under the new rulemaking standard.

No matter where the proposed rule currently lies, as the ongoing lawsuits against Adobe and Amazon reflect, it seems like the FTC has not given up on regulating negative option marketing within online subscription services. If the current proposed rule does not end up being effective and fails to become the FTC’s resolution, could lawsuits be their alternate pathway? Based on their past lawsuits against Wealthpress and MoviePass, which ended with the agreement in the proposed court order (“Agreement”) and settlement, it may be reasonable to anticipate that the ongoing cases will reach a similar outcome.[xxiii] The settlement and Agreement, which involved specific restriction and monetary agreement,[xxiv] from Wealthpress and MoviePass cases focused on refraining from the alleged type of conduct of an alleged company. These could discourage alleged tech companies like Wealthpress and MoviePass from using the alleged type of negative option marketing in their future subscription policies. However, since neither settlement nor Agreement has precedential authority, it is questionable whether the history of lawsuits filled with settlements and Agreement could prevent other tech companies from applying similar negative option marketing to their subscription policies.

Notes

[i] Complaint for Permanent Injunction, Monetary Judgment, Civil Penalty Judgment, and Other Relief at 25, United States v. Adobe Inc., No. 5:24-cv-03630-BLF (N.D. Cal. June 17, 2024).

[ii] Id. at ¶ 10.

[iii] 15 U.S.C. § 8403.

[iv] 15 U.S.C. 45(a)(1) (“Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful.”) (emphasis added). See also Complaint for Permanent Injunction, supra note i, at ¶ 22.

[v] 15 U.S.C. § 8404(a).

[vi] 15 U.S.C. § 57(b)(1) (“If any person, partnership, or corporation violates any rule under this subchapter respecting unfair or deceptive acts or practices…then the Commission may commence a civil action against such person.”) (emphasis added).

[vii] Complaint for Permanent Injunction, supra note i, at ¶ 121-25.

[viii] See Fed. Trade Comm’n v. Amazon.com, Inc., No. 2:23-CV-00932-JHC, 2024 WL 2723812 at 1 (W.D. Wash. May 28, 2024) (showing that the FTC is using the same legal basis).

[ix] FTC uses two terms (negative option marketing and dark pattern) interchangebly. See FED. TRADE COMM’N, Bringing Dark Patterns to Light : Staff Report (2022).

[x] FED. TRADE COMM’N, ENFORCEMENT POLICY STATEMENT REGARDING NEGATIVE OPTION MARKETING 60822 (2021).

[xi] Id.

[xii] Id. at 60823.

[xiii] See FTC Suit Requires Investment Advice Company WealthPress to Pay $1.7 Million for Deceiving Consumers, Fed. Trade Comm’n (Jan. 13, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/01/ftc-suit-requires-investment-advice-company-wealthpress-pay-17-million-deceiving-consumers and Operators of MoviePass Subscription Service Agree to Settle FTC Allegations that They Limited Usage, Failed to Secure User Data Fed. Trade Comm’n (June. 7, 2021), https://www.ftc.gov/news-events/news/press-releases/2021/06/operators-moviepass-subscription-service-agree-settle-ftc-allegations-they-limited-usage-failed.

[xiv] See FED. TRADE COMM’N, Bringing Dark Patterns to Light, supra note ix and FED. TRADE COMM’N, ENFORCEMENT POLICY STATEMENT, supra note x.

[xv] Negative Option Rule, 88 FR 24716 (proposed April 24, 2023) (to be codified at 16 C.F.R. pt. 425)

[xvi] Id. at 24734 (“This Rule contains requirements related to any form of negative option plan in any media, including, but not limited to, the internet, telephone, inprint, and in-person transactions.”).

[xvii] Id.

[xviii] Christine S. Wilson, Dissenting Statement of Commissioner Christine S. Wilson, Notice of Proposed Rulemaking, Negative Option Rule 2 (Sept. 2021), https://www.ftc.gov/system/files/ftc_gov/pdf/p064202_commissioner_wilson_dissent_negative_option_rule_finalrevd_0.pdf.

[xix] Id. See also AMG Cap. Mgmt., LLC v. Fed. Trade Comm’n, 593 U.S. 67, 141 S. Ct. 1341, 209 L. Ed. 2d 361 (2021) (finding that the FTC cannot seek monetary relief based on the FTC § 13(b), which triggers permanent injunction when the § 5 is found to be violated)

[xx] Christine S. Wilson, Dissenting Statement, supra note xviii, at 2.

[xxi] 15 U.S.C. § 46(g). See also A Brief Overview of the Federal Trade Commission’s Investigative, Law Enforcement, and Rulemaking Authority, Fed. Trade Comm’n (May, 2021), https://www.ftc.gov/about-ftc/mission/enforcement-authority.

[xxii] 15 U.S.C. 45(a)(1). E.g. Negative Option Rule, 88 FR at 24735 (“In connection with promoting or offering for sale any good or service with a negative option feature, it is a violation of this Rule and an unfair or deceptive act or practice in violation of Section 5 of the FTC Act.”).

[xxiii] supra note xiii.

[xxiv] Id.

Call of Regulation: How Microsoft and Regulators Are Battling for the Future of the Gaming Industry

February 21, 2023
Administrative Law, Antitrust, EU Law, Regulatory, Telecommunication, Video Games

Caroline Moriarty, MJLST Staffer

In January of 2022 Microsoft announced its proposed acquisition of Activision Blizzard, a video game company, promising to “bring the joy and community of gaming to everyone, across every device.” However, regulators in the United States, the EU, and the United Kingdom have recently indicated that they may block this acquisition due to its antitrust implications. In this post I’ll discuss the proposed acquisition, its antitrust concerns, recent actions from regulators, and prospects for the deal’s success.

Background

Microsoft, along with making the Windows platform, Microsoft Office suite, Surface computers, cloud computing software, and of new relevance, Bing, is a major player in the video game space. Microsoft owns Xbox, which along with Nintendo and Sony (PlayStation) is one of the three most popular gaming consoles. One of the main ways these consoles distinguish themselves from their competitors is by categorizing certain games as “exclusives,” where certain games can only be played on a single console. For example, Spiderman can only be played on PlayStation, the Mario games are exclusive to Nintendo, and Halo can only be played on Xbox. Other games, like Grand Theft Auto, Fortnite, and FIFA are offered on multiple platforms, allowing consumers to play the game on whatever console they already own.

Activision Blizzard is a video game holding company, which means the company owns games developed by game development studios. They then make decisions about marketing, creative direction, and console availability for individual games. Some of their most popular games include World of Warcraft, Candy Crush, Overwatch, and one of the most successful game franchises ever, Call of Duty. Readers outside of the gaming space may recognize Activision Blizzard’s name from recent news stories about its toxic workplace culture.

In January 2022, Microsoft announced its intention to purchase Activision Blizzard for $68.7 billion dollars, which would be the largest acquisition in the company’s history. The company stated that its goals were to expand into mobile gaming, as well as make more titles available, especially through Xbox Game Pass, a streaming service for games. After the announcement, critics pointed out two main issues. First, if Microsoft owned Activision Blizzard, it would be able to make the company’s titles exclusive to Xbox. This is especially problematic in relation to the Call of Duty franchise. Not only does the Call of Duty franchise include the top three most popular games of 2022, but it’s estimated that 400 million people play at least one of the games, 42% of whom play on Playstation. Second, if Microsoft owned Activision Blizzard, it could also make its titles exclusive to Xbox Game Pass, which would change the structure of the relatively new cloud streaming market.

The Regulators

Microsoft’s proposed acquisition has drawn scrutiny from the FTC, the European Commission, and the UK Competition and Markets Authority. In what the New York Times has dubbed “a global alignment on antitrust,” the three regulators have pursued a connected strategy. First, the European Commission announced an investigation of the deal in November, signaling that the deal would take time to close. Then, a month later, the FTC sued in its own administrative court, which is more favorable to antitrust claims. In February 2023, the Competition and Markets Authority released provisional findings on the effect of the acquisition on UK markets, writing that the merger may be expected to result in a substantial lessening of competition. Finally, the EU commission also completed its investigation, concluding that the possibility of Microsoft making Activision Blizzard titles exclusives “could reduce competition in the markets for the distribution of console and PC video games, leading to higher prices, lower quality and less innovation for console game distributors, which may, in turn, be passed on to consumers.” Together, the agencies are indicating a new era in antitrust – one that is much tougher on deals than in the recent past.

Specifically, the FTC called out Microsoft on its past acquisitions in its complaint. When Microsoft acquired Bethesda (another video game company, known for games like The Elder Scrolls: Skyrim) in 2021, the company told the European Commission that they would keep titles available on other consoles. After the deal cleared, Microsoft announced that many Bethesda titles, including highly anticipated games like Starfield and Redfall, would be Microsoft exclusives. The FTC used this in its complaint to show that any promises by Microsoft to keep games like Call of Duty available to all consumers could be broken at any time. Microsoft has disputed this characterization, arguing that the company made decisions to make titles exclusive on a “case-by-case basis,” which was in line with what it told the European Commission.

For the current deal, Microsoft has agreed to make Call of Duty available on the Nintendo Switch, and it claims to have made an offer to Sony, guaranteeing the franchise would remain available on PlayStation for ten years. This type of guarantee is known as conduct remedy, which preserves competition through requirements that the merged firm commits to take certain business actions or refrain from certain business conduct going forward. In contrast, structural remedies usually require a company to divest certain assets by selling parts of the business. One example of conduct remedies was in the Live Nation – Ticketmaster merger. The companies agreed not to retaliate against concert venue customers that switched to a different service nor tie sales of ticketing services to concerts it promoted. However, as the recent Taylor Swift ticketing dilemma proves, conduct remedies may not be effective in eliminating anticompetitive behavior.

Conclusion

Microsoft faces an uphill battle with its proposed acquisition. Despite its claims that Xbox does not exercise outsize influence in the gaming industry, the sheer size and potential effects of this acquisition make Microsoft’s claims much weaker. Further, the company faces stricter scrutiny from new regulators in the United States. Assistant Attorney General Jonathan Kanter, who leads the DOJ’s antitrust division, has already indicated that he prefers structural remedies to conduct ones, and Lina Khan, FTC commissioner, is well known for her opposition to big tech companies. If Microsoft wants this deal to succeed, it may have to provide more convincing evidence that it will act differently than its anticompetitive conduct in the past.

Twitter Troubles: The Upheaval of a Platform and Lessons for Social Media Governance

November 17, 2022
Administrative Law, Business Law, Ethics, Internet, Regulatory, Social Media, Telecommunication

Gordon Unzen, MJLST Staffer

Elon Musk’s Tumultuous Start

On October 27, 2022, Elon Musk officially completed his $44 billion deal to purchase the social media platform, Twitter.[1] When Musk’s bid to buy Twitter was initially accepted in April 2022, proponents spoke of a grand ideological vision for the platform under Musk. Musk himself emphasized the importance of free speech to democracy and called Twitter “the digital town square where matters vital to the future of humanity are debated.”[2] Twitter co-founder Jack Dorsey called Twitter the “closest thing we have to a global consciousness,” and expressed his support of Musk: “I trust his mission to extend the light of consciousness.”[3]

Yet only two weeks into Musk’s rule, the tone has quickly shifted towards doom, with advertisers fleeing the platform, talk of bankruptcy, and the Federal Trade Commission (“FTC”) expressing “deep concern.” What happened?

Free Speech or a Free for All?

Critics were quick to read Musk’s pre-purchase remarks about improving ‘free speech’ on Twitter to mean he would change how the platform would regulate hate speech and misinformation.[4] This fear was corroborated by the stream of racist slurs and memes from anonymous trolls ‘celebrating’ Musk’s purchase of Twitter.[5] However, Musk’s first major change to the platform came in the form of a new verification service called ‘Twitter Blue.’

Musk took control of Twitter during a substantial pullback in advertisement spending in the tech industry, a problem that has impacted other tech giants like Meta, Spotify, and Google.[6] His solution was to seek revenue directly from consumers through Twitter Blue, a program where users could pay $8 a month for verification with the ‘blue check’ that previously served to tell users whether an account of public interest was authentic.[7] Musk claimed this new system would give ‘power to the people,’ which proved correct in an ironic and unintended fashion.

Twitter Blue allowed users to pay $8 for a blue check and impersonate politicians, celebrities, and company media accounts—which is exactly what happened. Musk, Rudy Giuliani, O.J. Simpson, LeBron James, and even the Pope were among the many impersonated by Twitter users.[8] Companies received the same treatment, with an impersonation Eli Lilly and Company account writing “We are excited to announce insulin is free now,” causing its stock to drop 2.2%.[9]This has led advertising firms like Omnicom and IPG’s Mediabrands to conclude that brand safety measures are currently impeded on Twitter and advertisers have subsequently begun to announce pauses on ad spending.[10] Musk responded by suspending Twitter Blue only 48 hours after it launched, but the damage may already be done for Twitter, a company whose revenue was 90% ad sales in the second quarter of this year.[11] During his first mass call with employees, Musk said he could not rule out bankruptcy in Twitter’s future.[12]

It also remains to be seen whether the Twitter impersonators will escape civil liability under theories of defamation[13] or misappropriation of name or likeness,[14] or criminal liability under state identity theft[15] or false representation of a public employee statutes,[16] which have been legal avenues used to punish instances of social media impersonation in the past.

FTC and Twitter’s Consent Decree

On the first day of Musk’s takeover of Twitter, he immediately fired the CEO, CFO, head of legal policy, trust and safety, and general counsel.[17] By the following week, mass layoffs were in full swing with 3,700 Twitter jobs, or 50% of its total workforce, to be eliminated.[18] This move has already landed Twitter in legal trouble for potentially violating the California WARN Act, which requires 60 days advance notice of mass layoffs.[19] More ominously, however, these layoffs, as well as the departure of the company’s head of trust and safety, chief information security officer, chief compliance officer and chief privacy officer, have attracted the attention of the FTC.[20]

In 2011, Twitter entered a consent decree with the FTC in response to data security lapses requiring the company to establish and maintain a program that ensured its new features do not misrepresent “the extent to which it maintains and protects the security, privacy, confidentiality, or integrity of nonpublic consumer information.”[21] Twitter also agreed to implement two-factor authentication without collecting personal data, limit employee access to information, provide training for employees working on user data, designate executives to be responsible for decision-making regarding sensitive user data, and undergo a third-party audit every six months.[22] Twitter was most recently fined $150 million back in May for violating the consent decree.[23]

With many of Twitter’s former executives gone, the company may be at an increased risk for violating regulatory orders and may find itself lacking the necessary infrastructure to comply with the consent decree. Musk also reportedly urged software engineers to “self-certify” legal compliance for the products and features they deployed, which may already violate the court-ordered agreement.[24] In response to these developments, Douglas Farrar, the FTC’s director of public affairs, said the commission is watching “Twitter with deep concern” and added that “No chief executive or company is above the law.”[25] He also noted that the FTC had “new tools to ensure compliance, and we are prepared to use them.”[26] Whether and how the FTC will employ regulatory measures against Twitter remains uncertain.

Conclusions

The fate of Twitter is by no means set in stone—in two weeks the platform has lost advertisers, key employees, and some degree of public legitimacy. However, at the speed Musk has moved so far, in two more weeks the company could likely be in a very different position. Beyond the immediate consequences to the company, Musk’s leadership of Twitter illuminates some important lessons about social media governance, both internal and external to a platform.

First, social media is foremost a business and not the ‘digital town square’ Musk imagines. Twitter’s regulation of hate speech and verification of public accounts served an important role in maintaining community standards, promoting brand safety for advertisers, and protecting users. Loosening regulatory control runs a great risk of delegitimizing a platform that corporations and politicians alike took seriously as a tool for public communication.

Second, social media stability is important to government regulators and further oversight may not be far off on the horizon. Musk is setting a precedent and bringing the spotlight on the dangers of a destabilized social media platform and the risks this may pose to data privacy, efforts to curb misinformation, and even the stock market. In addition to the FTC, Senate Majority Whip, and chair of the Senate Judiciary Committee, Dick Durbin, has already commented negatively on the Twitter situation.[27] Musk may have given powerful regulators, and even legislators, the opportunity they were looking for to impose greater control over social media. For better or worse, Twitter’s present troubles could lead to a new era of government involvement in digital social spaces.

Notes

[1] Adam Bankhurst, Elon Musk’s Twitter Takeover and the Chaos that Followed: The Complete Timeline, IGN (Nov. 11, 2022), https://www.ign.com/articles/elon-musks-twitter-takeover-and-the-chaos-that-followed-the-complete-timeline.

[2] Monica Potts & Jean Yi, Why Twitter is Unlikely to Become the ‘Digital Town Square’ Elon Musk Envisions, FiveThirtyEight (Apr. 29, 2022), https://fivethirtyeight.com/features/why-twitter-is-unlikely-to-become-the-digital-town-square-elon-musk-envisions/.

[3] Bankhurst, supra note 1.

[4] Potts & Yi, supra note 2.

[5] Drew Harwell et al., Racist Tweets Quickly Surface After Musk Closes Twitter Deal, Washington Post (Oct. 28, 2022), https://www.washingtonpost.com/technology/2022/10/28/musk-twitter-racist-posts/.

[6] Bobby Allyn, Elon Musk Says Twitter Bankruptcy is Possible, But is That Likely?, NPR (Nov. 12, 2022), https://www.wglt.org/2022-11-12/elon-musk-says-twitter-bankruptcy-is-possible-but-is-that-likely.

[7] Id.

[8] Keegan Kelly, We Will Never Forget These Hilarious Twitter Impersonations, Cracked (Nov. 12, 2022), https://www.cracked.com/article_35965_we-will-never-forget-these-hilarious-twitter-impersonations.html; Shirin Ali, The Parody Gold Created by Elon Musk’s Twitter Blue, Slate (Nov. 11, 2022), https://slate.com/technology/2022/11/parody-accounts-of-twitter-blue.html.

[9] Ali, supra note 8.

[10] Mehnaz Yasmin & Kenneth Li, Major Ad Firm Omnicom Recommends Clients Pause Twitter Ad Spend – Memo, Reuters (Nov. 11, 2022), https://www.reuters.com/technology/major-ad-firm-omnicom-recommends-clients-pause-twitter-ad-spend-verge-2022-11-11/; Rebecca Kern, Top Firm Advises Pausing Twitter Ads After Musk Takeover, Politico (Nov. 1, 2022), https://www.politico.com/news/2022/11/01/top-marketing-firm-recommends-suspending-twitter-ads-with-musk-takeover-00064464.

[11] Yasmin & Li, supra note 10.

[12] Katie Paul & Paresh Dave, Musk Warns of Twitter Bankruptcy as More Senior Executives Quit, Reuters (Nov. 10, 2022), https://www.reuters.com/technology/twitter-information-security-chief-kissner-decides-leave-2022-11-10/.

[13] Dorrian Horsey, How to Deal With Defamation on Twitter, Minc, https://www.minclaw.com/how-to-report-slander-on-twitter/ (last visited Nov. 12, 2022).

[14] Maksim Reznik, Identity Theft on Social Networking Sites: Developing Issues of Internet Impersonation, 29 Touro L. Rev. 455, 456 n.12 (2013), https://digitalcommons.tourolaw.edu/cgi/viewcontent.cgi?article=1472&context=lawreview.

[15] Id. at 455.

[16] Brett Snider, Can a Fake Twitter Account Get You Arrested?, FindLaw Blog (April 22, 2014), https://www.findlaw.com/legalblogs/criminal-defense/can-a-fake-twitter-account-get-you-arrested/.

[17] Bankhurst, supra note 1.

[18] Sarah Perez & Ivan Mehta, Twitter Sued in Class Action Lawsuit Over Mass Layoffs Without Proper Legal Notice, Techcrunch (Nov. 4, 2022), https://techcrunch.com/2022/11/04/twitter-faces-a-class-action-lawsuit-over-mass-employee-layoffs-with-proper-legal-notice/.

[19] Id.

[20] Natasha Lomas & Darrell Etherington, Musk’s Lawyer Tells Twitter Staff They Won’t be Liable if Company Violates FTC Consent Decree (Nov. 11, 2022), https://techcrunch.com/2022/11/11/musks-lawyer-tells-twitter-staff-they-wont-be-liable-if-company-violates-ftc-consent-decree/.

[21] Id.

[22] Scott Nover, Elon Musk Might Have Already Broken Twitter’s Agreement With the FTC, Quartz (Nov. 11, 2022), https://qz.com/elon-musk-might-have-already-broken-twitter-s-agreement-1849771518.

[23] Tom Espiner, Twitter Boss Elon Musk ‘Not Above the Law’, Warns US Regulator, BBC (Nov. 11, 2022), https://www.bbc.com/news/business-63593242.

[24] Nover, supra note 22.

[25] Espiner, supra note 23.

[26] Id.

[27] Kern, supra note 10.

It’s Not Always Greener on the Other Side: Challenges to Environmental Marketing Claims

March 28, 2021
Environmental Law, Regulatory, Telecommunication

Ben Cooper, MJLST Staffer

On March 16, 2021 a trio of environmental groups filed an FTC complaint against Chevron alleging that Chevron violated the FTC’s Green Guides by falsely claiming “investment in renewable energy and [Chevron’s] commitment to reducing fossil fuel pollution.” The groups claim that this complaint is the first to use the Green Guides to prevent companies from making misleading environmental claims. Public attention has supported companies that minimize their environmental impact, but this FTC complaint suggests that a critical regulatory eye might be in the future. If the environmental groups convince the FTC to enforce the Green Guides against Chevron, other companies should review the claims they make about their products and operations.

A Morning Consult poll released in early December 2020 showed that nearly half of U.S. adults supported expanding the use of carbon removal practices and technologies. Only six percent of survey respondents opposed carbon removal practices. In response to the overwhelming public support for carbon reduction, hundreds of major companies are making some type of commitment to reduce their carbon footprint and curb climate change. One popular program, the Science Based Targets initiative, has over 1,200 participants who made various pledges to decarbonize (or offset the carbon within) their operations.

International and non-governmental organizations took the reins of climate change policy, especially once the Trump Administration withdrew the United States from the Paris Agreement in 2017. “Climate change seems to be the leading fashion statement for business in 2019,” declared a Marketplace story in October of 2019. Yet, as with fashion, style only gets one so far. Substance is key—and often lacking. One of the founders of the Science Based Targets initiative criticized fashionable but flimsy voluntary corporate commitments: “[T]here is not a lot of substance behind those [voluntary corporate] commitments or the commitments are not comprehensive enough.”

The voluntary commitments placated environmental groups when the alternative was the Trump Administration’s silence—but the Biden Administration presents an eager environmental partner: the FTC complaint “is the first test to see if [the Biden Administration] will follow through with their commitment to hold big polluters accountable,” said an environmental group spokesperson according to a Reuters report. The consensus of environmental groups, industry commentators, and regulatory observers appears to be that government oversight is imminent to encourage consistency and accountability—and to avoid “greenwashing.”

Should organizations that make environmental claims be concerned about enforcement action? It is too early to tell if the Chevron FTC complaint portends future complaints. In the Green Guides, the FTC declared that it seeks to avoid placing “the FTC in the inappropriate role of setting environmental policy,” which might suggest that it will stick to questions of misrepresentation and avoid wading into questions of evaluating environmental claims. It is also worth noting that the FTC is missing one of its five commissioners and Commissioner Rohit Chopra is expected to resign in anticipation of his nomination to head the Consumer Financial Protection Bureau. While the FTC might not be in a position at the moment to enforce the Green Guides, organizations that make environmental claims in marketing materials should monitor this complaint and ensure their compliance with FTC guidance as well as any policy changes from the Biden Administration.

The Unfair Advantage of Web Television

March 26, 2018
Data, Internet, New Technology, Regulatory, Telecommunication

Richard Yo, MJLST Staffer

Up to a certain point, ISPs like Comcast, Verizon, and AT&T enjoy healthy, mutually beneficial relationships with web content companies such as Netflix, YouTube, and Amazon. That relationship remains so even when regular internet usage moves beyond emails and webpage browsing to VoIP and video streaming. To consume data-heavy content, users seek the wider bandwidth of broadband service and ISPs are more than happy to provide it at a premium. However, once one side enters the foray of the other, the relationship becomes less tenable unless it is restructured or improved upon. This problem is worse when both sides attempt to mimic the other.

Such a tension had clearly arisen by the time Verizon v. FCC 740 F.3d 623 (D.C. Cir. 2014) was decided. The D.C. Circuit vacated, or rather clarified, the applicability of two of the three rules that constituted the FCC’s 2010 Open Internet Order. The D.C. Circuit clarified that the rule of transparency was applicable to all, but the restrictions on blocking and discrimination were applicable only to common carriers. The FCC had previously classified ISPs under Title I of the Communications Act; common carriers are classified under Title II. The 2014 decision confirmed that broadband companies, not being common carriers, could choose the internet speed of websites and web-services at their discretion so long as they were transparent. So, to say that the internet’s astounding growth and development is due to light touch regulation is disingenuous. That statement in and of itself is true. Such discriminatory and blocking behavior was not in the purview of broadband providers during the early days of the internet due to the aforementioned relationship.

Once web content began taking on the familiar forms of broadcast television, signs of throttling were evident. Netflix began original programming in 2013 and saw its streaming speeds drop dramatically that year on both Verizon and Comcast networks. In 2014, Netflix made separate peering-interconnection agreements with both companies to secure reliably fast speeds for itself. Soon, public outcry led to the FCC’s 2015 Open Internet Order reclassifying broadband internet service as a “telecommunications service” subject to Title II. ISPs were now common carriers and net neutrality was in play, at least briefly (2015-2018).

Due to the FCC’s 2018 Restoring Internet Freedom Order, much of the features of the 2015 order have been reversed. Some now fear that ISPs will again attempt to control the traffic on their networks in all sorts of insidious ways. This is a legitimate concern but not one that necessarily spans the entire spectrum of the internet.

The internet has largely gone unregulated thanks to legislation and policies meant to encourage innovation and discourse. Under this incubatory setting, numerous such advancements and developments have indeed been made. One quasi-advancement is the streaming of voice and video. The internet has gone from cat videos to award-winning dramas. What began as a supplement to mainstream entertainment has now become the dominant force. Instead of Holly Hunter rushing across a busy TV station, we have Philip DeFranco booting up his iMac. Our tastes have changed, and with it, the production involved.

There is an imbalance here. Broadcast television has always suffered the misgivings of the FCC, even more than its cable brethren. The pragmatic reason for this has always been broadcast television’s availability, or rather its unavoidability. Censors saw to it that obscenities would never come across a child’s view, even inadvertently. But it cannot be denied that the internet is vastly more ubiquitous. Laptop, tablet, and smartphone sales outnumber those of televisions. Even TVs are now ‘smart,’ serving not only their first master but a second web master as well (no pun intended). Shows like Community and Arrested Development were network television shows (on NBC and FOX, respectively) one minute, and web content (on Yahoo! and Netflix, respectively) the next. The form and function of these programs had not substantially changed but they were suddenly free of the FCC’s reign. Virtually identical productions on different platforms are regulated differently, all due to arguments anchored by fears of stagnation.

Telecommunication

Peyton Soethout, MJLST Staffer

Su Young Lee, MJLST Staffer

Contact Information