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Spring 2014 iAWFUL List – Consumers in the Crosshairs

Twice a year, the team releases an updated iAWFUL list. The list provides a concise collection of both active and proposed legislation that would present a significant non-market barrier to Internet commerce.

This year’s list is full of legislative efforts run amok. As legislators and regulators fall over themselves in a race to regulate Internet services, many are doing more harm than good. In many cases unfamiliarity with technology or misinformation is driving action.

Data breaches and privacy concerns have whipped elected officials into action, but as the 2014 iAWFUL list finds, elected officials are making things worse. Read more

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States Tilting at LPR Privacy Windmills – at a cost to citizens safety

Like Don Quixote charging dragons that don’t exist, states like Maryland are tilting at license plate recognition (LPR) technology.

This week Maryland legislators, listening to over-the-top rhetoric, introduced a bill to restrict law enforcement’s use of LPR technology – significantly diminishing law enforcement’s ability to stop crimes and save lives.

These concerns take the shape of potential abuses of LPR.  Fortunately, existing police policies, federal laws, and the LPR providers already address the privacy concerns regarding the use of LPR.  Read more

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Reminder: The Constitution Protects Innovators, Too

This week, some businesses filed a constitutional challenge against Utah’s new law restricting license plate recognition technologies. The lawsuit, filed by NetChoice members DRN and Vigilant, seeks a critical precedent that would remind state legislatures that the Constitution protects innovators– just as it protects other citizens.

The businesses filing this suit offer license plate recognition (LPR) technology and services.  We first wrote about this last July, describing the LPR witch-hunt being run by privacy advocates. Read more

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The Cost of Collateral Damage from Data Breaches

Consumers come first.  The theft of data affecting thousands of shoppers from the servers of Target and Nieman Marcus could harm individuals. And the threat of identity theft has exploded, rising by more than 50 percent from 2005 through 2010.

Media and policymakers are right to focus on customer plight.  But we shouldn’t forget that data theft also costs retailers too and we shouldn’t resort to new legislation that penalizes the victim.

With any data breach, businesses face the obvious damage to trust and consumer confidence.  Consumers start shopping at competitors and become skeptical of loyalty cards.  But there’s also the monetary cost of a data breach cutting a business’s ability to meet investor expectations, grow and create jobs. Read more

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Walking Over the US Constitution – California’s New Privacy Law

You’ve probably been hearing about a bunch of new privacy laws coming out of California.  We’ve been warning you about the bills all year and now they’ve become law.

Aside from being bad ideas and costing consumers more than protecting them, one of these new laws, SB 568, is patently unconstitutional.

We’ve talked before about the importance of Section 230 and how it shields a website from content posted by a third-party.  Section 230 made possible the user-generated content side of the internet by removing liability from sites for the content posted by their users.

Read more

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Internet Dodges a Bullet in California

California’s Legislative Affairs Office (LAO) did innovators and their customers a huge service earlier this month, when it released a report that warned of the unforeseen costs of imposing a sweeping new privacy standard.

But while the LAO may have warded off one serious threat, in one state, it’s good work won’t be enough to hold back a rising tide of economically disastrous “privacy” measures nationwide.

The time is ripe to build on what the California LAO accomplished, by conducting a nationwide study that examines the economic impacts of all proposed privacy measures – not just to governments – but to the innovative industries that they target.

The focus of the LAO study was a draft ballot initiative – backed by former State Senator Steve Peace – that would have required all Internet companies to obtain affirmative, opt-in consent before sharing virtually any customer data — even for necessary functioning of services. Read more

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Protecting the Law that Protects the Internet

State Attorneys General are asking Congress to amend Section 230 of the Communications Decency Act, which some have called the “Constitution of the Internet” for how it cleared the way for social media and user-generated content.

In simplest terms, Section 230 protects website operators from liability for content or commerce posted by users.

That liability protection unleashed the development of sites like Facebook, Reddit, WordPress and many others that enable user-generated content (UGC). The whole Web 2.0 revolution was premised on innovators being allowed to provide technical platforms without fear that they would be held legally responsible for all of the words and actions of anyone using their platforms. Read more

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Chairman Goodlatte’s Principles Stop Durbin’s Internet Sales Tax From Taking Us Over the Cliff

Growing up I read comics about super-heroes stopping a trains before they went of the cliff.  Today, Chairman Bob Goodlatte showed his own form of heroics by stopping the internet sales tax train from taking us all over the cliff.  He released a set of principles which set this train on a new path…one without a cliff.

I boarded this train a decade ago when the states created a real effort to simplify tax collection on remote sales.  Back then it was called the Streamlined Sales Tax Project (SSTP).  While this train was on the right track, it wasn’t moving fast enough for some.  And like the bad guys in the comics, the big-box stores took over the train, switched the tracks, and set it full throttle on a collision course with mid-size businesses and over the cliff…enter the Marketplace Fairness Act (MFA). Read more

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Debunking the Phantom Threat of License Plate Recognition

Legislation that limits technology takes lots of different forms, but most often it arises when lawmakers want quick fixes to behavioral problems by knee-capping technology.   Sometimes just the fear of possible future bad behavior is enough to trigger knee-jerk legislative intervention.

That’s the case with the new crusade against Automated License Plate Technology (LPR). Driving the crusade is a slick campaign conceived by the American Civil Liberties Union. In it, the ACLU warns of a host of potential misuses with LPR tools, while conveniently neglecting to mention that none of them has actually occurred. Read more

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No Truth Serum Needed – Internet Sales Tax Opposed by Those Most Likely to Gain From It

Helping businesses comply with increasingly complex state tax laws can be a lucrative endeavor for certified public accountants. So, in the case of the proposed Internet sales tax system, one would think they’d be shouting with joy over guiding online businesses through state tax requirements – and, of course, increasing their bottom line. Yet the exact opposite is happening.

The American Association of Attorney-Certified Public Accountants (AAA-CPA) has recently come out against Internet sales tax under the Marketplace Fairness Act (MFA). Seems like taking this position – at the risk of profitability – would require some sort of truth serum, but not so. Its membership realizes this unfair and ill-defined tax system will overburden our national economy and ultimately cost more to administer than it raises. Read more