Hey there What's Next readers! This week we'll look at a European Union copyright initiative that has critics crying foul over freedom of speech. Also up, attorneys general call out big tech for quietly creeping on users, including kids. And a host of crypto news and highlights from technology's collision course with the government.

For suggestions, feedback or just saying hi, don't be shy: get at me via @IanMichaelLopez or [email protected].

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Copyright v. Speech: EU's Move on “The Upload Filter”

When big tech meets the law, there's a tendency for unintended consequences to pop up. IE: Curbing free speech on the internet. That's what happened last week when the EU's parliament voted in favor of a controversial Directive on Copyright.

Now, the final vote isn't until Jan. 19, but The Verge reports the directive is unlikely to fail, and has “far reaching” implications. The focus of the free speech fervor is Article 13, dubbed “the upload filter” and the “meme ban,” requires platforms like Facebook to police the sharing of unlicensed copyrighted material.

This may seem like a straightforward request, but the reality is more nuanced. As Wired UK's Matt Reynolds writes, “no one can quite agree how these platforms are expected to identify and remove” content under the mandate. Though the directive itself refers to “proportionate content recognition technologies” as a route, Reynolds adeptly points out that “sounds an awful lot like it's asking platform owners to use automate filters to scan every piece of upload content and stop anything that might violate copyright from being uploaded.”

You copyright nerds may think this sounds familiar. That's because Google gave identifying copyright infringing content a go in the U.S., undertaking partnerships with third parties to automate Digital Millennium Copyright Act takedown notices, a process that resulted in the removal of some non-infringing content from Google searches.

The EU Parliament's own Julia Redia had content removed by a Google partner's automated takedown bot run amok, and didn't mince words in voicing her concerns over the EU's own Copyright Directive. As TechCrunch reports, Reda says the vote was “a severe blow to the free and open internet.”

“By endorsing new legal and technical limits on what we can post and share online, the European Parliament is putting corporate profits over freedom of speech and abandoning long-standing principles that made the internet what it is today.”

➤ Takeaway: The EU's move may not reshape the internet, but it's joining U.S. regulators in pushing big technology companies to make big changes they may not be ready for.

Protocol: Four Things to Know

➤ Crypto Cronies. Washington lawmakers are notoriously behind when it comes to innovative technology, and blockchain surely won't be the exception. Outfits may find a helping hand in the Blockchain Association lobbying group, an organization pushing for a little Guidance 101 from regulators. In the eyes of President Mike Lempres, who also serves as Coinbase's chief legal officer, crypto companies need guidance now, not in three years. “The biggest challenge we face, from a regulatory standpoint, is lack of clarity,” he told Corporate Counsel. “The rules aren't written yet. They want to do the right thing but it's sometimes not clear what the right thing is to do.”

➤ Blockchain for the Everyman. No one thinks of mom-and-pop outfits when they hear smart contracts. Well, maybe not everyone. LegalZoom seems convinced the technology is a fit for its on-demand legal services user base, and announced a partnership with Clause, a technology company with rockstar status on the smart contract circuit. The move essentially serves as a gateway for LegalZoom customers to edit and sign contractual agreements that can automatically execute on any blockchain, courtesy of Clause's technology. And it comes at an interesting time for consumer legal services—Rocket Lawyer recently announced its own moment on the bandwagon, partnering with ConsenSys for its own smart contract service.

➤ Groundbreaking Securities. A federal judge in Brooklyn gave the go ahead to try a defendant under federal securities law who's charged with defrauding investors via an ICO scheme. The move appears to be the first in a criminal lawsuit. It's also among the earliest instances of a federal judge weighing in on regulating the nascent marketplace. But it also appears to be “a bit of a bellwether,” says DLA Piper's Benjamin Klein, who defines it as “the groundwork for future prosecution and enforcement action for the SEC and DOJ.”

➤ SEC Trendsetters. Speaking of the SEC, a new report finds the agency is igniting a rise in securities lawsuits involving cryptocurrencies. Analytics group Lex Machina pegs the SEC as responsible for 30 percent of the cases filed in 2018up to June 30. But when it comes to the most cases filed, that honor goes to law firm Levi & Korinsky, which Lex Machina's Owen Byrd says is “aggressively expanding” its practice in plaintiffs-side securities work.

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Big Data, Big Problems: AGs Crack Down on Clandestine Collection

Big tech's wheeling and dealing of user data isn't new, but more people are lining up to force the industry to keep its eyes off their daily activities. Among them is New Mexico AG Hector Balderas, who filed a lawsuit against a handful of tech companies—Google and Twitter among them—over a scheme to collect children's data and push them with tailored advertisements.

Sound creepy? It depends on how you look at it. Much of the suit stems from alleged violations of the Children's Online Privacy Act, aka COPPA, which levies restrictions against collecting data on kids under 13. Defendant Tiny Labs, a company behind several children's apps, said they deny the charges “as far as we know.” As per their website, Tiny Labs has “an age gate” where users are asked their birth date “per FTC guidelines,” which cuts collection from users claiming to be 13 and younger, an approach they say is totally in-line with compliance mandates.

Balderas and co., however are singing a different tune. The AG tells the New York Times that tech companies “are not policing themselves,” and that he hopes the Federal Trade Commission and other agencies follow his lead in holding them accountable. “This is as much a black eye on the federal government as the tech space,” he said. “I'm trying to get lawmakers at the federal level to wake up.”

Meanwhile, state lawmakers aren't sleeping on the issue. Arizona AG Mark Brnovichlaunched his own probe, this one into whether an undisclosed tech firm is violating state residents' privacy rights by tracking their location via cell phones. Mum's the word on the tech company's name, a la Arizona law, though all signs point toward Google (note the outside counsel contract was signed a week after the Associated Press dropped its piece on Google's clandestine user tracking).

Even Brnovich couldn't help being tongue-in-cheek when asked whether Google was the target, telling Arizona Daily Star, “I can't say anything other than you don't need a weatherman to know which way the wind blows.” (He acknowledges the Dylan quote, FWIW.)

➤ Takeaway: These state-level actions are not isolated, and may be the way forward in addressing U.S. privacy concerns at the consumer level.

Also On the Radar

➤ Deep State v. Deep Fakes. Many of you are likely familiar with deepfakes—artificial intelligence-powered software that's good at tweaking video to make it look like something occurred that actually didn't (see for yourself). Three of its members of Congress sent a letter to National Intelligence Director Dan Coats asking for an assessment of the technology's potential to threaten national security. The lawmakers warn that the technology, which made waves earlier this year via fake porn videos, could be used “by foreign or domestic actors to spread misinformation,” with “implications for offensive active measures campaigns targeting the United States.”

➤ It's Not You, It's Us. That's the FTC's vantage point in hearings to determine whether the agency should change its policies to reflect new technologies and the potential threats they pose. Thursday marked the launch of 15 to 20 hearings over next the several months and are among efforts at both the state and federal levels to curb big tech's seemingly unencumbered growth in the U.S. And while the country isn't likely to see a federal GDPR any time soon, the FTC's move marks “a major shift” for U.S. regulators, as the NY Times' Cecilia Kang writes. As former FCC chief of staff Blair Levin told Kang, “It will be a slow-moving ship, faster on privacy than on antitrust, but it's an important moment.”

➤ Paper at the Polls. Last week, I wrote about research indicating the U.S. should stick to paper voting ballots given hacking concerns. That debate played out in a federal courtroom in Atlanta last week in a lawsuit brought by voters urging the state of Georgia to go all-paper come the midterms. Georgia understandably wasn't hot on the idea, with Secretary of State Brian Kemp's office dubbing any such change “reckless,” though presiding Judge Amy Totenburg took a more nuanced approach. She denied plaintiffs motions for preliminary injunction on Monday, citing insufficient time for “thoughtful, though expedited remedial relief.” However, she also noted the state and defendants “buried their heads in the sand,” regarding hacking concerns, advising “further delay is not tolerable.”