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FCC invites public comment on Trump’s attempt to nerf Section 230

FCC Chairman Ajit Pai has decided to ask the public for its thoughts on an attempt initiated in Trump in May to water down certain protections that arguably led to the creation of the modern internet economy. The nakedly retaliatory order seems to be, legally speaking, laughable, and could be resolved without public input — but the FCC wants your opinion, so you may as well give it to them.

You can submit your comment here at the FCC’s long-suffering electronic comment filing system, but before you do so, perhaps acquaint yourself with a few facts.

Section 230 essentially prevents companies like Facebook and Google from being liable for content they merely host, as long as they work to take down illegal content quickly. Some feel these protections has given the companies the opportunity to manipulate speech on their platforms — Trump felt targeted by a fact-check warning placed by Twitter on his unsupported claims of fraud in mail-in warning.

To understand the order itself and see commentary from the companies that would be affected, as well as Senator Ron Wyden (D-OR), who co-authored the law in the first place, read our story from the day Trump signed the order. (Wyden called it “plainly illegal.”)

For a bipartisan legislative approach that actually addresses shortcomings in Section 230, check out the PACT Act announced in June. (Sen. Brian Schatz (D-HI) says they’re approaching the law “with a scalpel rather than a jackhammer.”)

More relevant to the FCC’s proceedings, however, are the comments of sitting commissioner Brendan Starks, who questioned the order’s legality and ethics, likening it to a personal vendetta intended to intimidate certain companies. As he explained:

The broader debate about Section 230 long predates President Trump’s conflict with Twitter in particular, and there are so many smart people who believe the law here should be updated. But ultimately that debate belongs to Congress. That the president may find it more expedient to influence a five-member commission than a 538-member Congress is not a sufficient reason, much less a good one, to circumvent the constitutional function of our democratically elected representatives.

Incidentally, Starks may be who Pai is referring to in a memo announcing the commentary period. “I strongly disagree with those who demand that we ignore the law and deny the public and all stakeholders the opportunity to weigh in on this important issue. We should welcome vigorous debate—not foreclose it,” Pai wrote.

This may be a reference to Commissioner Starks’s suggestion that the FCC address the order quickly and authoritatively: “If, as I suspect it ultimately will, the petition fails at a legal question of authority, I think we should say it loud and clear, and close the book on this unfortunate detour,” he said. After all, public opinion doesn’t count for much if the order has no legal effect to begin with and the FCC doesn’t even have to consider how it might revisit Section 230.

Whatever the case, the proposal is ready for you to comment on it. To do so, visit this page and click, in the box on the left, “+New Filing” or “+Express” — the first is if you would like to submit a document or evidence in support of your opinion, and the second is if you just want to explain your position in plain text. Remember, this information will be filed publicly, so anything you put in those fields — name, address and everything — will be visible online.

To be clear, you’re commenting on the  NTIA proposal that the FCC draw up new rules regarding Section 230, which the executive order compelled that organization to send, not the executive order itself.

As with the net neutrality debacle, the FCC does not have to take your opinion into account, or reality for that matter. The comment period lasts 45 days, after which the item will likely go to internal deliberations at the Commission.

Daily Crunch: Microsoft-TikTok acquisition inches closer to reality

A possible Microsoft TikTok acquisition is causing plenty of drama, we review Google’s new budget Pixel and SpaceX’s Crew Dragon returns to Earth. Here’s your Daily Crunch for August 3, 2020.

Microsoft-TikTok acquisition inches closer to reality

This weekend, Microsoft confirmed reports that it’s in talks to acquire TikTok, the popular mobile video app currently owned by Chinese company ByteDance. It sounds like the outcome of those talks may ultimately have less to do with Microsoft and more with President Donald Trump.

“Following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump, Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States,” the company said in a statement. “Microsoft fully appreciates the importance of addressing the President’s concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury.”

And indeed, Trump said today that he’s not opposed to an acquisition, but that “a very substantial portion of that price is going to have to come into the Treasury of the United States.” Meanwhile, Chinese internet users are calling ByteDance’s CEO a traitor.

The tech giants

Google’s budget Pixel 4a addresses its premium predecessor’s biggest problem — Brian Heater reviews the new $349 handset.

Facebook launches commerce and connectivity-focused accelerator programs — Facebook’s Commerce Accelerator will select 60 startups from the EMEA and LATAM regions, while Connectivity will feature 30 startups from LATAM and North America.

Adobe’s plans for an online content attribution standard could have big implications for misinformation — The project was first announced last November, and now the team has a whitepaper going into the nuts and bolts about how its system would work.

Startups, funding and venture capital

YC-backed Artifact looks to make podcasts more personal — Using professionally contracted interviewers, Artifact conducts short interviews with a person’s closest friends or family and turns them into a personal podcast.

Founded by a lifelong house-flipper, Inspectify is a marketplace for home inspections and repairs — Through the platform, buyers can instantly book inspections and receive repair estimates.

Mobile banking startup Varo is becoming a real bank — The company announced that it has been granted a national bank charter from the Office of the Comptroller of the Currency and secured regulatory approvals from the FDIC and Federal Reserve to open Varo Bank, N.A.

Advice and analysis from Extra Crunch

The essential revenue software stack — Tim Porter and Elise La Cava of Madrona Ventures outline the set of services used by sales, marketing and growth teams across their portfolio to identify and manage their prospects and revenue.

Is the 2020 SPAC boom an echo of the 2017 ICO craze? — Alex Wilhelm looks at two new pieces of SPAC news.

After Shopify’s huge quarter, BigCommerce raises its IPO price range — BigCommerce now intends to price its IPO between $21 and $23 per share.

(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

SpaceX and NASA successfully return Crew Dragon spacecraft to Earth with astronauts on board — SpaceX’s Crew Dragon appears to have performed exactly as intended throughout the mission, handling the launch, ISS docking, undocking, de-orbit and splashdown in a fully automated process that kept the astronauts safe and secure throughout.

Original Content podcast: Netflix’s ‘Say I Do’ offers a wedding-focused twist on the ‘Queer Eye’ formula — I’m not someone who cares about weddings, but this show made me cry. Multiple times!

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

EventGeek relaunches as Circa to help marketers embrace virtual events

EventGeek was a Y Combinator-backed startup that offered tools to help large enterprises manage the logistics of their events. So with the COVID-19 pandemic essentially eliminating large-scale conferences, at least in-person, it’s not exactly surprising that the company had to reinvent itself.

Today, EventGeek relaunched as Circa, with a new focus on virtual events. Founder and CEO Alex Patriquin said that Circa is reusing some pieces of EventGeek’s existing technology, but he estimated that 80% of the platform is new.

While the relaunch only just became official, the startup says its software has already been used to adapt 40,000 in-person events into virtual conferences and webinars.

The immediate challenge, Patriquin said, is simply figuring out how to throw a virtual event — something for which Circa offers a playbook. But the startup’s goals go beyond virtual event logistics.

“Our new focus is really more at the senior marketing stakeholder level, helping them have a unified view of the customer,” Patriquin said.

He explained that “events have always been kind of disconnected from the marketing stack,” so the shift to virtual presents an opportunity to treat event participation as part of the larger customer journey, and to include events in the broader customer record. To that end, Circa integrates with sales and marketing systems like Salesforce and Marketo, as well as with video conferencing platforms like Zoom and On24.

Circa screenshot

Image Credits: Circa

“We don’t actually deliver [the conference] experience,” Patriquin said. “We put it into that context of the customer journey.”

Liz Kokoska, senior director of demand generation for North America at Circa customer Okta, made a similar point.

“Prior to Circa, we had to manage our physical and virtual events in separate systems, even though we thought of them as parts of the same marketing channel,” Kokoska said in a statement. “With Circa, we now have a single view of all our events in one place — this is helpful in planning and company-wide visibility on marketing activity. Being able to seamlessly adapt to the new world of virtual and hybrid events has given our team a significant advantage.”

And as Patriquin looks ahead to a world where large conferences are possible again, he predicted that there’s still “a really big opportunity for the events industry and for Circa.”

“As in-person events start to come back, there’s going to be a phase where health and safety are going to be paramount,” he continued. “After that health and safety phase, it’s going to be the age of hybrid events — where everything is virtual right now, hybrid will provide the opportunity to bring key [virtual] learnings back into the in-person world, to have a lot more data and intelligence and really be able to personalize an attendee’s experience.”

What Microsoft should demand in exchange for its ‘payment’ to the US government for TikTok

In one of the crazier news stories (and in 2020, that is saying something), President Donald Trump said today during a media availability event that in order for the U.S. government to sign off on a potential Microsoft/TikTok deal, “a very substantial portion of that price is going to have to come into the Treasury of the United States,” based on my colleague Alex Wilhelm’s rough transcript.

That seems nearly impossible to actually execute in reality (corporations don’t just quote-unquote bribe the U.S. government to get their docs signed), but let’s actually take it at face value: Should Microsoft pay, and if so, what should they demand in any bargain with the U.S. government?

First and foremost, some context. ByteDance, TikTok’s parent company, has been valued at more than $100 billion. ByteDance owns a suite of apps, including TikTok’s China-focused and extraordinarily popular sister app Douyin, as well as Toutiao, an extremely successful news reader, so teasing out TikTok’s valuation by itself is difficult. Adding to the ambiguity is the regulatory chaos of the deal, and the fact that many big-pocketed buyers like Facebook are out of the running on straight antitrust grounds.

So let’s say for illustration that the price is at least $10 billion, if not tens of billions of dollars. How should Microsoft be thinking about a negotiation with the government here?

The overriding objective should be reducing Microsoft’s post-acquisition regulatory headaches. TikTok has well-documented privacy problems, which also involve teens — an area where regulations are acutely sensitive. When Facebook faced privacy problems on its own platform, it finally agreed to a settlement of $5 billion last year with the Federal Trade Commission to unify all the different cases and bring them to a conclusion. It also agreed to a set of restrictions as well as a monitoring mechanism to ensure compliance. TikTok (formerly Musical.ly) actually agreed to an FTC privacy settlement of $5.7 million last year.

On top of privacy, you have the export licensing issues from Treasury, data protection concerns on Capitol Hill due to the app’s China provenance and potential antitrust issues from Justice.

So, it’s time to cut a deal. Offer the U.S. government a beefy sum — perhaps even a few billion depending on the final purchase price — as a “settlement fine” in exchange for immunity to all claims regarding privacy, trade and antitrust regulations prior to TikTok’s acquisition. Perhaps have a setup where Microsoft has 180 days post-acquisition to clear up privacy issues, move data to presumably its own Azure cloud in the United States, and put in even better parental controls than TikTok has already introduced in the past few months.

Far from being an atrocious setup, this could massively limit Microsoft’s long-term liabilities, and also allow the company to avoid a lot of the escrow and holdbacks typical of large M&A deals, where an acquirer will not pay out the full acquisition price upfront lest future lawsuits bear significant costs.

It’s terrible for the president himself to get involved in such a matter in such a direct and indelicate way. But now that President Trump has opened the door — it’s actually perhaps not as bad of a path forward as it looks like at first glance. He has the power to push for an inter-agency process, line up all the government stakeholders and accept a level of immunity in exchange for a “fine.”

A settlement can’t solve every problem. TikTok, like all internet apps in the United States, is not just governed by federal law but also by state laws around privacy, such as the California Consumer Privacy Act. A settlement with the federal government may still conflict with relevant state laws. In addition, agreeing to a large payment in the heart of election season would be deeply controversial, possibly on both sides of the aisle.

Nonetheless, this deal is by no means typical, and no one should think it will have a typical M&A process. While few lawyers would recommend engaging with the federal government over what is effectively a strange form of highway robbery — there are decent fiduciary reasons to just pay the toll, acquire some liability protection and move on.