Tech Regulation

Österreich: Die Koalition muss die Überwachung von verschlüsselten Nachrichten-Apps ablehnen

WIEN – Diese Woche enthüllte Innenminister Gerhard Karner von der ÖVP, dass er einen Gesetzesentwurf “schnell” durchsetzen möchte, der der Regierung die Befugnis geben würde, verschlüsselte Kommunikation in Nachrichten-Apps zu überwachen.

Obwohl Karner betont hat, dass die neuen Befugnisse nur sehr gezielt eingesetzt würden, ist unklar, ob die Entwickler und Anbieter von Nachrichten-Apps gezwungen werden sollen, die Verschlüsselung zu brechen, um die Anordnungen durchzuführen.

Wie der stellvertretende Direktor des Consumer Choice Center, Yaël Ossowski, erklärte, würde diese Befugnis bedeuten, die Verschlüsselung für Millionen von österreichischen Verbrauchern zu untergraben und zu brechen.

„Jeder Versuch, die Verschlüsselung für einige ausgewählte Personen zu brechen, gefährdet gleichzeitig die Privatsphäre von Millionen von Österreichern. Dies ist weniger eine Frage der angemessenen Polizeibefugnisse als vielmehr eine Frage der technischen und sicherheitsrelevanten Aspekte. Schwächere Verschlüsselung macht österreichische Nutzer weniger sicher“ sagte Ossowski.

„Verschlüsselungsstandards von Apps wie Signal, WhatsApp und sogar iMessage aufzuheben, würde der österreichischen Regierung außergewöhnliche Befugnisse einräumen, die das Risiko bergen, jede und alle Kommunikation zu kompromittieren, nicht nur die von Verdächtigen oder Terroristen.

„Um gegen kriminelle Akteure vorzugehen, sollte die Koalition das bestehende Justizsystem nutzen, um Haftbefehle auf Grundlage eines begründeten Verdachts durchzusetzen, anstatt Messaging-Dienste und Apps dazu zu zwingen, diese Aufgabe für sie zu übernehmen“ erklärte Ossowski.

Das Consumer Choice Center weist darauf hin, dass ähnliche Versuche, die Verschlüsselung mit polizeilicher Gewalt zu brechen, bereits im Vereinigten Königreich und in Frankreich unternommen wurden, wo sie von Bürgerrechtsgruppen abgelehnt wurden.

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Das Consumer Choice Center ist eine unabhängige, parteiunabhängige Verbraucherorganisation, die die Vorteile von Wahlfreiheit, Innovation und Wachstum im Alltagsleben für Verbraucher in über 100 Ländern fördert. Wir interessieren uns insbesondere für regulatorische Trends in Washington, Brüssel, Wien, Berlin, Ottawa, Brasília, London und Genf genau.

Erfahren Sie mehr auf consumerchoicecenter.org

How Donald Trump Can Beat Europe’s Tech Regulations

If there is one bright spot in Trump’s trade threats, it is that the conversation on how to improve the global regulatory space for the average consumer has been recalibrated. 

President Trump’s tariff-heavy trade agenda is quickly proving unpopular with Americans, which might explain why the administration worked overtime to rebrand tariffs as “liberation” from foreign partners who treated the United States unfairly. As part of the narrative switch, Trump’s team has at least one clever weapon that could ultimately serve to defend and strengthen free trade and innovation between the US and its allies like the European Union.

By framing any punitive regulation or excessive fine issued by foreign countries against U.S. firms as a legal device that “restricts, prevents, or impedes international trade,” President Trump has made a fresh case for how digital regulation and international diplomacy should work in the twenty-first century.

This idea is more interesting and impactful than many people may realize.

As anyone who casually observes the stock market can tell you, the U.S. economy is now bound at the hip with the fate of its technology companies. At a conservative estimate of 9 percent of GDP, our nation’s powerhouse tech firms based in Silicon Valley, Austin, and New York City have become a daily presence in our lives. For better or for worse, President Trump has taken notice.

In a pair of presidential memoranda issued in February, Trump announced new measures to evaluate restrictive trade practices hamstringing U.S. tech firms abroad. Trump might not love or fully trust Big Tech. Still, he’s extended the umbrella of America-First to them anyway, vowing to fight “one-sided, anti-competitive policies and practices of foreign governments” that target the likes of Meta, Amazon, Google, Netflix, Apple, and others. 

While the idea of reciprocal tariffs should make any economist queasy, we should pay special attention to the details of the Trump administration’s policies. 

One memorandum mentions that, beginning in 2019, many trading nations enacted Digital Service Taxes (DST) that “foreign government officials openly admit are designed to plunder American companies.” The document also invokes the “extortive fines and taxes” that exist to “prop up failed foreign economies.”

Though the executive orders don’t mention the specific laws or fines by name, one can safely intuit the reference of several regulations enacted in the European Union, namely the Digital Services Act (DSA) and the Digital Markets Act (DMA), as well as the so-called “link tax” efforts in Canada and Australia.

Regulators in Brussels have ratcheted up the enforcement of these regulations and haven’t let up now that President Trump has turned up the heat on trade.

In March, the European Commission declared three separate violations of the DMA against Apple, Meta, and Google, threatening as much as 10 percent of global revenue for each of the tech behemoths. The violations relate to various aspects of self-preferencing on platforms, advertising consent rules, and interoperability as mandated by European legislation.

What matters about Trump’s framing of these issues is that he views these regulatory actions as harmful not just to American innovators but to the global economy and consumers as a whole. The EU’s regulatory regime has morphed into a diplomatic issue. 

Rather than just Meta vs. the EU or Apple vs. Brussels, Trump has taken it upon himself to view it as a broader United States vs. European Union regulatory fight. As a strategy, it is having some impact.

EU Trade Commissioner Maroš Šefčovič told an audience in Washington that the commission was open to a “dialogue on big tech,” while playing down claims of discrimination against American companies. 

Just a few weeks later, during a review of the European Commission’s “Omnibus” package, regulators inserted several amendments to ease ESG and sustainability reporting requirements on global firms with operations in the EU.

Reversing years of the European rulemaking process will be next to impossible. Still, these subtle pivots are a glimmer of hope that the EU and the United States can work together again on tech and innovation. 

At home, U.S. firms still face a hostile climate in Washington. Trump comes to their defense against antagonism abroad, only to dispense with the “Good Cop” routine and continue litigation against companies like Amazon and Google for alleged antitrust violations. The FTC lawsuit against Meta’s acquisitions of Instagram and WhatsApp over a decade ago will have its first court hearing next month. At the same time, a judge reviews remedies to force Google to sell off its popular Chrome browser. 

It is hardly consistent for Trump to fend off all foreign regulatory threats and tariffs against American tech while subjecting them to punitive lawfare in our own courts that will only harm consumers who like these products and services. At the same time, a trade war won’t help anyone.

If there is one bright spot in Trump’s cacophony of trade threats, it is that the conversation on how to improve the global regulatory space for the average consumer has been recalibrated. 

The ability to change the conversation has always been Trump’s most clever weapon, and it is providing a great opportunity to refine our tech and trade relationships for the better.

Originally published here

Experts Slam Government After “Disastrous” Apple Encryption Move

Security and consumer rights experts have urged lawmakers to hold the UK government to account, after Apple removed end-to-end encryption (E2EE) in iCloud following data access demands from the Home Office.

Although the access request was made in secret under the controversial Investigatory Powers Act (IPA), also dubbed the ‘Snooper’s Charter’, it was widely reported as happening earlier this month.

However, as long argued by Apple and other tech companies, it’s impossible to create an E2EE “backdoor” for government and law enforcement without putting all customers at risk.

That’s why Apple has taken the decision to remove the opt-in Advanced Data Protection (ADP) feature for UK customers.

“We are gravely disappointed that the protections provided by ADP will not be available to our customers in the UK given the continuing rise of data breaches and other threats to customer privacy,” Apple said in a statement.

Read the full text here

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Steering away from dangerous Brussels digital bureaucracy is essential for economic growth

The beginning of a new year always marks some sort of introduction of a new regulatory framework. The EU welcomed Romania and Bulgaria to the Schengen Zone, and the common charger policy went live (including in Northern Ireland, raising concerns of a BINO again). In the UK however, we had one of the most consequential digital legislation going live: the Digital Markets, Consumers and Competition Act 2024 (DMCCA), which is the framework for digital markets here in the UK.

Not soon after, the Competition and Markets Authority (CMA) with its newfound power, decided to investigate Google for its market dominance as a search engine and in search ads. This investigation is to establish whether Google has a “Strategic Market Status” (SMS) in these fields. Once designated as such, the CMA will then have the power to impose conduct requirements (CRs) or Pro Competition Intervention (PCIs) on how Google can provide its service, which very much affects consumers.

An example of what these interventions might look like can be found in the EU. If you google a restaurant or a shop, a map may be displayed, but clicking on the map has been disabled and the Maps link in the Google search bar has also been removed. This is because the EU believes that Google is promoting its own product, Google Maps, and not allowing other map providers to compete against its product, a concept that is called self-preferencing.

The EU’s demands have been a great source of inconvenience to many consumers, where consumer interface and efficiency have been made worse off thanks to bureaucratic overreach. The CMA will also investigate other companies in due course and has now launched an investigation into Apple.

The CMA has now pulled one of the classic tricks to legitimise their proposed intervention, by launching a consultation and bombarding it with incomprehensible gibberish that throws off the everyday consumer from being able to voice their concerns. Also note that the background for this consultation is pretty much a copy-paste job from their investigation into Google in 2019-2020. Since then, the industry has had seismic changes, such as the introduction of AI in search engines.

The reality is that this investigation is a very loaded question, with the potential to have wide-ranging consequences that the everyday consumer will bear the impact of. If a new independent restaurant is not able to use one of the biggest search engines to locate itself on the map, then how will it be possible for the restaurant to succeed and consumers to enjoy this new restaurant?

I understand the CMA’s dilemma: It is being scapegoated as the institution that has to regulate digital activity with a small team (even smaller now having had to fire 10 per cent of its employees due to a budgeting error). This is an impossible task to achieve, even if you spend 100 per cent of the UK GDP in attempting so. Regulators react to innovation and not preempt it. This also leads to far more restrictive legislation.

The other dilemma is squaring competition with the network effect. What makes the internet an interesting market is the fact that it gains additional value as more people use it. The more people input their data in Google, the more it becomes useful for everyone else. This intuitively would lead to a conclusion that eliminates competition as everyone will be inclined to use Google.

However, this has not been the case. If anything we have seen fierce competition between all the big tech companies, enabling the creation of more innovative products. This is amplified by the introduction of AI, where more and more people are now using Chat-GPT instead of Google, forcing Google to introduce its own AI capabilities in its search engines. This is not a monopoly, this is competition.

Crucially, these regulatory interventions are so bureaucratically minded that these investigations did not even consider current consumer satisfaction with products owned and used, or even attempt to quantify the change of consumer satisfaction before and after such interventions. Meanwhile, for businesses to profit in this sector, they need to greatly factor in consumer satisfaction, an arguably better means of self-regulating consumer protection.

The reality is at a time when the UK has been stagnating economically, it has been due to these restrictive measures. The Whitehall bureaucratic mentality values its ability to control and impose itself over industry rather than working with the markets to encourage innovation and consumer protection and convenience.

To grow, we need to encourage innovation and technological advancements, which will catalyze what resources we have now to increase our output exponentially. Rachel Reeves hinted at such measures when she mentioned the replacement of the CMA chair in her speech. However, amending such a bureaucratically restrictive mentality requires more than just words, which will be the Government’s challenge in the next few years.

To conclude, The First and Second Industrial Revolutions were spearheaded by Britain. Whilst notable British figures assisted in driving the Third Industrial Revolution, we were not in a position to lead, and now as we approach the Fourth Industrial Revolution, the era of Artificial Intelligence, it is the Americans who have created the petri dish for such innovation.

With the inauguration of Donald Trump, it is most likely that their permissive environment for innovation is amplified. Reeves said all the right things in her speech at Siemens, but for the UK to have a decent chance at being a playmaker in digital innovation, we need less investigations and EU alignment, and more entrepreneurial and realistic thinking.

Originally published here

Apple axes data protection tool after government security row

Apple has removed its advanced data protection (ADP) feature from the UK, following a dispute with the UK government over encryption and access to user data.

This comes after the Home Office requested access to encrypted iCloud data under the investigatory powers act (IPA), a law that requires leading tech firms to provide information to law enforcement when required.

ADP, which ensures that only account holders can access their stored data using end to end encryption, will no longer be available to UK users, making them more vulnerable to cyber and malware attacks.

From Friday afternoon, those trying to activate the feature received an error notification, while existing users will have their access revoked.

Read the full text here

The Government’s Spying Requests Force Apple to Phase Out Encryption for UK Users

As of 15:00, new Apple users in the UK can no longer enable Advanced Data Protection (APD) of their data, an end-to-end encrypted backup. In response to the government’s requests to secure a backdoor to Apple’s encrypted ecosystem, the company has decided to abandon this feature, and will still only provide data with law enforcement, if they have a warrant. 

In a statement, Mike Salem, UK Country Associate for the Consumer Choice Center (CCC), reacted to the news: 

“This unfortunate move is a direct result of the government’s own decision to force tech companies to hand over the keys to our data, giving them a blank cheque to access any of our information without proper due process.”

“Everyone in the UK should be extremely worried about what the government aims to access not just in the UK, but across the world. Over 40 public authorities, including police, intelligence agencies, HMRC, and even local councils can apply for such warrants with broad powers for communication and data surveillance, and with almost always guaranteed approval.”

Read the full text here

The royals coming after American free speech

The British royals are coming after American free speech, just days before Donald Trump is set to take office as president for the second time.

Prince Harry and Meghan Markle expressed outrage that Meta, owner of Facebook and Instagram, changed policy to rely on community notes versus a dedicated fact-checking department.

Ironically, the pair suggested Meta’s policy change “directly undermines free speech.” How exactly? Because, according to Harry and Meghan, Mark Zuckerberg is, allegedly, prioritizing those using social media “to spread hate, lies and division.”

What’s more, the pair suggest Meta’s decision is based on American politics which should “never determine whether freedom of expression and civil and human rights are protected in the online spaces so clearly shaping or destroying democracy.” So much for the War of Independence.

Trump campaigned on a promise to “Make America Great Again (Again).” The former president and now president-elect has made a name for himself with his uber-patriotism — some would say nationalism — and eschewing of more European-style policies on everything from high tax rates to “net zero” environmental and energy standards to immigration rules. In his first term, he battled European leaders on an array of policy matters, including NATO contributions and many European nations’ tendency to rely on the US for their security needs instead of standing up their own national defenses.

Read the full text here

Chargeur unique européen : l’emblème d’un continent en déclin

L’UE célèbre l’arrivée du chargeur unique, mais à quel prix ?

Le premier janvier, la règle de l’UE sur les chargeurs communs est entrée en vigueur, ce qui signifie que tous les nouveaux téléphones mobiles, tablettes, appareils photo numériques, écouteurs, haut-parleurs, claviers et de nombreux autres appareils électroniques vendus dans l’UE devront être équipés d’un port de charge USB type-C.

L’argument en faveur de cette nouvelle loi, qui a été élaborée pendant des années, est la normalisation des ports de recharge sur l’ensemble du continent et la prévention des déchets électroniques. En résumé, il s’agit de faciliter la vie des consommateurs tout en protégeant l’environnement.

Cela dit, voici pourquoi cela pose problème.

Même si l’USB-C semble être le chargeur le plus efficace à l’heure actuelle, nous ne pouvons pas prédire comment cette technologie évoluera à l’avenir. Prenons cet exemple : en 2009, lorsque l’Union européenne a proposé pour la première fois un chargeur commun, le micro-USB était considéré comme la norme. Si ce chargeur commun avait été adopté à l’époque, les consommateurs européens auraient-ils été privés des dispositifs USB-C, aujourd’hui plus populaires, qui constituent la nouvelle norme ?

Le temps nous a montré qu’il y a toujours de meilleures technologies qui arriveront sur le marché. En légiférant sur un chargeur commun, l’UE sera responsable du retard de l’innovation qui privera les consommateurs de choix, non seulement aujourd’hui, mais aussi à l’avenir. L’adoption de cette proposition par le Parlement européen et le Conseil pourrait prendre encore de nombreux mois, et d’ici là, de nombreuses entreprises pourraient même trouver de meilleures solutions que celles qui sont actuellement proposées.

Avec l’évolution rapide de la technologie, il n’est pas certain que l’USB-C soit toujours considéré comme la technologie de charge la plus efficace. De plus, comme de plus en plus d’entreprises expérimentent des chargeurs sans fil, il est très probable que les câbles de charge deviennent obsolètes. Si cette proposition est acceptée, les entreprises seront, quoi qu’il en soit, contraintes de fournir cette prise.

Lorsque Apple a décidé d’abandonner le port pour casque d’écoute pour les iPhone en 2016, beaucoup étaient sceptiques. Mais les consommateurs ont fini par apprécier la technologie sans fil et le fait de ne pas avoir à s’occuper de fils qui s’emmêlent toujours mystiquement dès qu’on les met dans sa poche. Si l’UE ou tout autre organisme gouvernemental avait tenté d’intervenir et de remédier à ce « désagrément », nous n’aurions probablement pas pu profiter des avantages qu’ils procurent.

La joie avec laquelle la Commission européenne célèbre la « victoire » tant attendue sur les entreprises technologiques grâce à la réglementation commune sur les chargeurs est terriblement révélatrice de l’état dans lequel se trouve actuellement l’Union européenne.

L’Europe produit-elle des géants de la technologie, à l’exception peut-être de Spotify ? Non, elle leur impose des taxes. L’Europe est-elle à l’avant-garde en matière de nouvelles fonctionnalités ? Non, et en réalité, en raison des réglementations européennes, les consommateurs européens ne bénéficient pas des nouvelles fonctionnalités du logiciel iOS. Résout-elle ses problèmes grâce à un environnement favorable aux entreprises ? Non, elle met en avant ses vertus par des réglementations mesquines et inutiles.

Une armée de bureaucrates se sont fait pression les uns sur les autres pendant près de 16 ans pour faire adopter ces règles. Des milliers de traducteurs l’ont traduite dans toutes les langues officielles de l’UE, les parlementaires ont perdu des milliers d’heures à en débattre, les machines de Bruxelles vont encore perdre des milliers d’heures à scanner les articles des fournisseurs de technologie non conformes, rendant ainsi impossible la vente de millions d’articles que les consommateurs auraient encore pu acheter et charger avec les câbles existants.

Notre obsession de la réglementation est le début de notre disparition en Europe. Nous ne voyons aucune opportunité dans la technologie, seulement des menaces pour notre mode de vie. Un mode de vie qui est de plus en plus statique.

Il suffit de se rendre dans de nombreux pays comme la Corée ou le Japon pour se rendre compte que nous ne sommes qu’un musée destiné à être apprécié par les touristes. Oui, nous produisons des fromages et des vins fantastiques – et nous devons continuer à le faire – mais cela ne peut pas être l’essence même de l’Europe. Nous étions autrefois un continent d’innovation et d’esprit d’entreprise, et nous semblons avoir tout abandonné pour avoir une chance de paraître vertueux et respectueux de l’environnement, aux yeux de ceux qui nous rabaissent. Il est temps que nous nous libérions de notre désir de ne jamais laisser l’innovation se produire.

Originally published here

Consumers Aren’t Protected By Virginia’s social media ‘KYC’ Law

To the Delegates of the Virginia General Assembly,

As a consumer advocacy group representing consumers and Internet users who favor tech innovation, lifestyle freedom, and freedom of choice, we write to you with reservations about the bill you are soon to consider.

HB1624 requires that social media networks identify their users to classify those under 18 years of age and require parental consent if said platforms provide what the legislation broadly declares are “addictive feeds”. The bill also restricts social media firms from offering alternative products to minors.

The goal of protecting children online and steering them toward healthy uses of technology and social media is an important and noble goal that we also champion.

However, due to the language in this bill and the effects it would have on practically all users of social media, the measure would cause more harm than good. HB1624 would have a worrying impact on the ability of anyone – minor or adult – to freely use certain social platforms and participate online.

Our concerns on this bill are summarized in four points:

1. PRIVACY

For social media providers to determine who is a minor, they will also be forced to determine who is an adult. The bill stipulates that covered platforms must use “commercially reasonable methods to determine that the user is not a minor”. This introduces more technical complexity to social media access, but also legally requires a Know Your Customer regime that is antithetical to a free and open Internet.

Suppose users are required to provide verifiably personal details to sign up for certain websites. In that case, this will remove a user’s ability to access social media websites without providing sensitive information including their name, date of birth, identity documents, facial recognition, address, and much more.

The Internet has evolved to be the global marketplace for ideas and content, bringing people together and allowing for the freedom to explore, connect, and learn. Forcing 

users to provide private data scraps anonymity and privacy on the Internet, which may be required, necessary, or desired by the consumer. This is what’s most consistent with our own First Amendment rights to freedom of speech and association. The Supreme Court’s 2011 ruling in Brown v. Entertainment Merchants Association stands as a good example of young people’s right to receive information, whether it be from video games, chat rooms, or social media apps. 

Online users should be able to use services or apps while providing or not providing whatever personal information they so choose, ensuring they can remain private and secure.

2.   SECURITY

Because any platform using algorithmic feeds to deliver content would be required to collect personal and age-identifying information, it’s not difficult to see how attractive this data would be to potential hackers and bad actors. The more social media platforms a consumer uses, the worse this vulnerability would be for them. 

The more that online services and state and federal regulations require users to submit online to access certain websites, the more risk there is of that information falling victim to coordinated hacks and unlawful disclosures. Any cursory search online can find hundreds of terabytes of hacked and leaked data that has been exposed, often due to lax security procedures or improper storage of data.

Though the legislation aims to outsource the process of age identification to a “commercially reasonable” method, there is no failsafe method for determining identity, storing that information, and ensuring it will not become accessible to the wider Internet. Requiring such a process by law does not render these systems hack-proof. Rather, it opens the floodgates and creates even more incentives for criminal activity online. 

3. PARENTAL RIGHTS AND EDUCATION

Rather than government bureaucrats, it should be up to parents and guardians to guide their teenagers and educate them on how to use certain social media sites and applications. We applaud the notion of parental consent for minors accessing certain sites, but this should be a decision within households and independent of Virginia state statutes.

Forcing age identification for social media sites will impact every age group, therefore state resources could be better used to educate minors on the advantages and disadvantages of different social media activities and behaviors.

Parents should not have their roles or responsibilities curbed because of legislation that aims to do good for minors. We must ensure that Virginians have the freedom to choose how they educate and raise their children. Those parents and guardians are best suited to structure the technological needs and wants of their children. This bill undermines that. 

4.   A SETBACK FOR INNOVATION

Last, the process laid out in HB1624 restrains social media websites from creating any alternative experience on a social media app if a user is determined to be a minor.

What this means in practice is that any algorithm used in social media content delivery would be de facto restricted, and any social media platform would be prohibited from offering paid services, ad-free versions, or other alternatives to better suit select audiences. If this is carried through in Virginia, it would necessarily require social media networks to create different versions of apps or sites for Virginia residents – minor or adult – which creates an undue burden that many firms will actively avoid rather than attempt to comply with.

Rather than imposing age-gating on social media networks that will degrade and restrict the experience for users of all ages, we call on Virginia’s elected officials to consider alternative means to educate young people about social media and safety in the online world. 

As consumer advocates, we at the Consumer Choice Center believe the answer to concerns about youth access to social media is not overly broad regulation that impacts users of all ages, but rather, developing guidance and educational resources that uphold the primary duty of care for parents and guardians.

Protecting kids online is a noble goal worthy of praise.

However, in its current form, HB1624 and its counterpart in SB854, are untenable and would ultimately make Virginia residents worse off.

Sincerely yours,

Stephen Kent (Manassas, VA)

Media Director

Biden admin’s Christmas wish for a Google split should get a lump of coal

Washington, D.C. – The Consumer Choice Center (CCC) expresses deep concern over the DOJ’s proposed remedies in the case of United States v. Google LLC that aim to completely dismantle the US tech company, deprive consumers of any future innovation, and set a dangerous precedent for American competitiveness.

Following the Department of Justice’s proposed remedies filed with the court on last month, the California-based search and ad tech giant had its chance to respond with their own filing Friday evening, blasting the government’s demands.

Yaël Ossowski, deputy director of the Consumer Choice Center, responds:

“Breaking apart a cornerstone of the American Internet economy is truly without precedent and beyond the pale for a country that is supposed to revere innovation,” said Ossowski.

“The government wants to forever restrict the company’s abilities to compete in evolving industries like artificial intelligence, where the US is facing massive competitive pressure from more authoritarian countries like China.

“Giving the government a regulatory razor blade to carve up a central node of our tech sector does not bode well for consumers who can already choose from a host of different products fit to their taste,” added Ossowski.

“Rather than picking winners and losers, the government should tamper down its trustbusting and let consumers vote with their clicks, rather than having that decision made for them. The DOJ is continuing to advance an ideological campaign that ignores consumer choice and makes a mockery of antitrust law,” concluded Ossowski.

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The Consumer Choice Center is an independent, nonpartisan consumer advocacy group championing the benefits of freedom of choice, innovation, and abundance in everyday life for consumers in over 100 countries. We closely monitor regulatory trends in Washington, Brussels, Ottawa, Brasilia, London, and Geneva.

CFPB’s fraud lawsuit against peer-to-peer payment apps reeks of regulation by enforcement that will harm consumers

WASHINGTON, D.C. – Today, the Consumer Finance Protection Bureau filed a lawsuit in the District Court of Arizona against the owners of the payment platform Zelle, alleging that app has not done enough to combat payment frauds committed by scammers.

Zelle, jointly owned by seven of the nation’s largest banks, is a popular FinTech peer-to-peer payment platform used by consumers to easy send and receive money without additional fees.

Yaël Ossowski, deputy director of the consumer advocacy group Consumer Choice Center, responds to the suit:

“In the waning days of the Biden Administration, the CFPB is overstepping its authority in suing a peer-to-peer payment app used by millions of consumers to send and receive payments and ignoring the thousands of scammers they could easily reach,” said Ossowski.

“In targeting the platform rather than punishing those who perpetuate fraud, the agency is regulating by enforcement, hoping to introduce backdoor liability for FinTech firms and payment services that hasn’t been endorsed or approved by Congress. This could make debanking and offloading of customers even worse.

“Payment services already employ strict anti-fraud and scam measures that allow consumers to get their money back. Using lawfare to enact new policies will result in costly and intrusive rules that will degrade the consumer experience, make it more difficult for consumers to use or even qualify for these apps, and likely create more amenable conditions for bad actors to steal,” concluded Ossowski.

Earlier this month, the Consumer Choice Center launched a policy primer to evaluate legislative solutions for combatting and alleviating the harm caused by payment scams and frauds.

This primer analyzes the Protecting Consumers From Payment Scams Act, and whether the liability remedies proposed would help combat consumer fraud and scams or would ultimately create unintended consequences for consumers that do not punish wrongdoers.

The primer includes key policy suggestions for legislators to help consumers avoid frauds and scams while demonstrating the errors that would come with expanded institutional liability:

  • Shifting liability to financial institutions and payment apps will ultimately backfire on consumers, leading to more expansive financial surveillance, higher costs due to more compliance and reimbursements, and a generally degraded consumer experience that eradicates the advantage of popular financial tech and banks.
  • Consumer financial education is the most effective way to prevent scams.
  • A national privacy law fostering innovation while protecting consumers
  • Stiffer penalties for individuals committing frauds and scams

READ THE PRIMER HERE

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva, Lima, Brasilia, and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org.

“Kids Online Safety Act” Is Still A Bad Deal For Consumer Privacy and Speech

Congress is moving quickly to revive the Kids Online Safety Act (KOSA), which passed the US Senate in August, by attaching the controversial bill to the year-end Continuing Resolution by the House of Representatives. Revisions have been made to KOSA, now championed by X CEO Linda Yaccarino, and Don Trump Jr.

Yaël Ossowski, Deputy Director of the Consumer Choice Center, reacted to the renewed push to pass KOSA, saying, “At the same time Republicans and Democrats are coming together in support of Elon Musk’s DOGE initiative, they’re slyly advancing KOSA which would massively expand online regulation power and necessitate more bureaucracy. In the end, kids still get no added online safety, and adults lose their privacy.”

The inclusion of the Kids Online Safety Act in the Continuing Resolution (CR) comes as Congress faces a looming deadline to avoid a government shutdown. This prompted Senator Rand Paul (R-KY) to criticize KOSA’s new iteration and demand that it not be tacked onto larger legislation such as defense and government spending.

The Consumer Choice Center opposes the most current iteration of KOSA and the mechanism its sponsors aim to use to pass the bill. Stephen Kent, Media Director of the Consumer Choice Center, responded, “A bill with such large implications for free speech and the First Amendment should not be rolled into a CR with government spending and defense. Members of Congress must be able to vote their conscience and represent their constituents without being strongarmed into voting for KOSA to keep the government open.”

The Consumer Choice Center urges Congress to remove KOSA from the Continuing Resolution and reintroduce it as a standalone bill for proper debate. Public trust in government depends on lawmakers crafting policies that are transparent and evidence-based. Consumers of online platforms and services deserve better than what KOSA proposes. 

Yaël Ossowski concluded, “We remain concerned about how KOSA still grants the Federal Trade Commission (FTC) a blank check on rulemaking authority, allowing them to create content moderation guidance while giving plaintiff lawyers an avenue to sue most tech companies out of existence. There’s also nothing sufficient in KOSA to guard online privacy, retention of data, and provide liability for breaches of consumer’s personal information.”

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The Consumer Choice Center is an independent, nonpartisan consumer advocacy group championing the benefits of freedom of choice, innovation, and abundance in everyday life for consumers in over 100 countries. We closely monitor regulatory trends in Washington, Brussels, Ottawa, Brasilia, London, and Geneva. Find out more at www.consumerchoicecenter.org

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