February 2023 Global Tech Policy Bulletin: From Terrorists on YouTube to the Chips Act and Its Discontents

Hello, and welcome back to Citizen Tech, InformationWeek’s monthly global policy roundup. For this past month we’re looking at the Chips Act and its discontents; the last Republican commissioner leaving the FTC; the European Parliament’s about-face on crypto; two cases before the Supreme Court; a spy scandal at the Munich Security Conference; bad bot poetry, and more.

Checking In With Chips

Across the United States and around the world, tech companies and governments have been sitting uneasily for six months, waiting to see how Biden’s monumental Chips Act will unfold. Over $52 billion in federal incentives are going to be dispersed for semiconductor manufacturing, but no one quite knows how yet, or to whom. But the wait is coming to an end. On February 23, commerce secretary Gina Raimondo spoke at Georgetown University to announce that the applications for funding will open the first week of March.

But there seems to be more grumbling among the potential beneficiaries of these incentives than enthusiasm. On the day Raimondo went to Georgetown, the New York Times published a leaked memo from an unnamed PR firm complaining that Intel was maneuvering behind the scenes to swallow up the lion’s share of federal monies -- and in bad faith, opening semiconductor plants in the US that they know will never be operational. Whether those allegations took place or not, they're not true; certainly Intel is far behind schedule in equipping its new plants, suffering from a severe drop in its stock values and lower demand for chips across the last quarter. But whether Intel is taking unfair advantage of the White House’s largesse, and whether they can live up to their promises as the American semiconductor champion, the doubts and malcontent have spread beyond American borders.

Former speaker of the House Nancy Pelosi gave a disquieting interview to POLITICO this month, detailing her state visit to Taiwan in the days after the Chips Act passed. She had gone to meet with Taiwan’s president, but more important than her host was the omnipresent guest at their meetings and state luncheons: the grim founder of the Taiwan Semiconductor Manufacturing Company (TSMC), Morris Chang. The 91-year-old Chang seems to have taken every opportunity to harangue Pelosi about the soundness of the Chips Act. As Pelosi recounted it to Politico, he warned that American companies would be starting from scratch in an industry so volatile it changed every day. America’s limited access to necessary minerals was another obstacle; another, in his view, is the general American distaste for manufacturing: young graduates preferred finance and other more lucrative fields, leaving an intellectual vacuum.

Was Chang bluffing, desperate to protect his empire from an upstart? (His empire and his country, of course: Chang’s suggestion to the then-Speaker was to invest those monies in fortifying Taiwan against Chinese aggression, which would in turn protect American access to chips.) His point about mineral access is undeniable. The US Geologic Survey notes that 80% of the world’s refined cobalt comes from China, and that “[g]allium is not produced in the United States, and demand is satisfied by imports.”

Pelosi seems to have held her own against Chang’s discouragement. Next week we’ll begin to see whether her sang-froid and the Biden administration’s can withstand the chaos that will accompany this herculean task. A whole industrial sector has to be built overnight. Nothing, at this point, is guaranteed.

At the Supreme Court

The Supreme Court heard arguments in two monumental tech cases this month, Gonzalez v. Google and Twitter, Inc. v. Taamneh.

The Gonzalez case asks whether a social media platform should be held responsible for illegal or extremist content its members host. The Gonzalez of the name is a California family whose daughter, a 23-year-old student, was murdered in the November 2015 terrorist attack in Paris. The terrorists that evening had been inspired by Islamic State propaganda videos hosted on YouTube (owned by Google). Is Google, then, responsible for Gonzalez’s death?

In the era before social media, websites could rebuff these kinds of lawsuits by citing Section 230 of the Communications Decency Act, which holds that an “interactive computer service” is not the same as a publisher (see The Verge’s explainer for a deeper dive). But “interactive computer services” are much more complicated today than they were in 1996, especially since automated algorithms now try to drag users down rabbit holes of recommended content. If you’re watching cat videos, these recommendations aren’t particularly dangerous; but if you happened on ISIS propaganda, you could potentially end up spending the next few hours immersing yourself in extremist content, which is enough to occasionally make terrorists and murderers out of casual users -- see the Bataclan killers. In the words of the complaint, “by recommend[ing] ISIS videos to users, Google assists ISIS in spreading its message and thus provides material support to ISIS.” The court is currently considering whether to believe this line, or whether, on the other hand, Section 230 is broad enough to encompass modern algorithms.

The Twitter case -- in fact the Twitter, Google, and Facebook case, as all three of those tech giants are listed as respondents -- is closely related, although it hinges on the Anti-Terrorism Act (ATA) instead of the Communications Decency Act. The ATA allows for victims of terrorist attacks to sue anyone who “aids and abets, by knowingly providing substantial assistance, or who conspires with the person who committed such an act.” The plaintiffs in this case are a much more varied group than the Gonzalez family, and include the families of victims of various, sometimes unconnected terrorist attacks. If the court decides in their favor, Big Tech firms will have to scramble to clean up their platforms to avoid the inevitable wave of copycat lawsuits. It’s unclear what that kind of content moderation will look like, whether it will be automated, or whether and to what degree the government advises its rolling out.

Huawei Sees You, Munich

OpSec, operational security, is a well-known principle in defense circles. “Loose lips sink ships” -- so do unencrypted emails, carelessly placed phone calls, links clicked without thinking, and using unsafe telecoms infrastructure. You would think they’d understand that fairly well at the Munich Security Conference that took place this month, an event whose invitees included Emmanuel Macron, Kamala Harris, and countless defense ministers and generals. But according to a POLITICO investigation, and despite the organizers’ reticence, telecoms masts from the Chinese company Huawei surrounded the Munich hotel where the conference was held. There may have been a Huawei antenna in the hotel itself, although this has not been confirmed.

Huawei insists that their services are safe, and that they do not spy on their allies. This is hard to materially refute: neither POLITICO nor anyone else has seen evidence that the Chinese government was spying in Munich. But it’s not a good look for Beijing, after they did exactly that to the African Union headquarters in 2018, and in the same month that a Chinese observation balloon was shot down over the United States, and in the midst of the TikTok spy scandal (covered in Citizen Tech in December). Maximilian Funke-Kaiser, a German MP for the centrist Liberal Democratic Party, told POLITICO that “the use of Huawei technology in the mobile network here runs counter to Germany's security policy goals.” But his government’s reluctance to break ties with Huawei and other Chinese companies in the face of provocation exposes a major rift in the European political class. Can Europe break its dependence on other, major geopolitical blocs -- Chinese telecoms, Russian liquid gas, American digital commerce? Should it? If so, how soon?

War Bulletin no. 13

It’s been a few months since Citizen Tech covered Elon Musk. This month, Musk made another one-man incursion into the Ukrainian War, this time effectively on behalf of Russia. Musk’s SpaceX firm had initially promised Starlink satellite internet access to Ukraine, free of charge at the point of use, and sent several thousand terminals. But Musk’s bitter arguments with the Pentagon over who should foot the bill for this service, as well as his apparent shift in sympathies toward Russia, have led him to doubt his initial largesse. Reuters reported that early this month that SpaceX was taking unspecified efforts to keep the Ukrainian military from using Starlink. SpaceX’s president, Gwynne Shotwell, told reporters that Starlink “was never meant to be weaponized.” For almost a year it had served the Ukrainians for everything from reconnaissance to drone strikes. Shotwell said that Starlink will remain operable for “comms” purposes but seemed uneasy. She refused to answer questions about recent service outages, and never explained the means by which SpaceX will restrict Ukrainian military use. It’s not clear how grave an impact this cutting-off will have on Ukraine’s operational success, or where exactly Musk stands anymore, in this fight he’d chosen to wade into.

(More) Drama at the FTC

The last Republican commissioner at the Federal Trade Commission announced, in the Wall Street Journal op-ed section, that she could no longer abide the leadership of Lina Khan, and that she was quitting. Christine Wilson accused the 33-year-old Khan of “disregard for the rule of law and due process” and “abuses of government power,” specifically in blocking Wilson from making public anything that would embarrass the Democratic Party and the antitrust hawks who control the Commission.

If this sounds familiar, it’s because Citizen Tech covered the second-to-last Republican commissioner’s exit in August. Of the five commissioner seats, three are now held by Democrats; two are empty. The Times wonders whether a well-disposed centrist Republican might satisfy both the GOP and Khan’s supporters, someone along the lines of Rebecca Kelly Slaughter, a Democratic Trump appointee re-endorsed this month by the White House.

In any case, the fact that the FTC is currently an outright Democratic monopoly -- an antitrust monopoly, as it were -- may not be much consolation to Khan. She lost her suit against Meta this month, failing to block the company’s acquisition of the virtual reality gaming company Within.

In Strasbourg: Crypto Welcome (?!)

An evergreen theme in these pages: The Atlantic alliance has never precluded a bit of rivalry. This time, the field of combat is crypto. As the Biden administration stares at the industry balefully, unable quite to tame it and unwilling to run unrestricted, the European Parliament has been working to invite crypto investments to the EU. A proposed law called the Markets in Crypto-Assets (MiCA) passed last year with the idea of making crypto trading rules consistent, and “make the most of the opportunities [cryptocurrencies] create.” Just having a clear, consistent line on crypto is attractive, and would likely shift the base of the industry to the European Union from its home in the States.

A high-level lawyer at Ripple, a crypto industry group, told POLITICO that “Europe is clearly outpacing the US by establishing holistic regulatory frameworks for the cryptoasset industry … We fully expect Europe to become a natural hub for responsible participants going forward.” This will put more pressure on US regulators to clarify their maddening rules, which give both the industry and its enemies a headache. MiCA will pass into law this year.

At the Office of Strategic Capital

Don’t worry, it’s brand new; no one else has heard of it either. The Office of Strategic Capital is the US Department of Defense’s new office to encourage private sector R&D, offering what they call “patient capital” for quantum computing, AI, biotech, and other solutions with a possible military application. Breaking Defense, reporting from a meeting this month of the Defense Innovation Board, described the two-month-old Office’s strategy as being split between normal investment and what they call, in fine bureaucratese, “leveraging”: lowering the cost of capital for smaller tech companies who might otherwise founder in the “valley of death,” unable to sell their new solutions.

It’s part of the Biden administration’s show of optimism in the future of public-private cooperation. It’s also one more wave radiating from the passing of the Chips Act. The director of the Office said, at the aforementioned meeting, that “technology areas such as semiconductors … are just as critical as those defense technologies that we consider -- such as hypersonics and directed energy -- these are technology areas are ones that we spend billions of dollars of funding.” Applications for patient capital investments will open this summer.

Recommend Watch: AI Is a Miserable Poet

Here’s a video that ought to relieve anyone who sits up at night wondering whether a computer will eventually drive poets and painters and composers out of business. Damian Boeselager, MEP for the center-left, pan-European youth party Volt, used ChatGPT to write him a speech on the need for a legal framework to regulate AI, rather in the spirit of Ted Lieu’s New York Times op-ed last month -- but in “Shakespearean English.” The AI produced a serviceable enough speech, but as you’ll here, the poetry is dreadful. It starts out all right (although in four beats per line instead of five). But from there it goes to the dogs.

“We cannot stand idle and let it be / but regulate it, lest it harm thee.” The first line is almost anapestic, and so cavalier enough with the final stutter of “let it be” as to sound vaguely like Byron. But “lest it harm thee?” Come on. “Transparency must be its guiding light / and accountability, with all its might; / And not just some, but all shall gain / Equality and fairness shall not be in vain.” The first line is decent, digestible pentameter; the second line isn’t bad, but it isn’t pentameter by any stretch. The bot didn’t even try on the last line. Perhaps the New Yorker will pick it up.

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