TLJ News from February 6-10, 2012

EC's Alumnia Addresses Patents and Communications Standards

2/10. Joaquín Almunia, the European Commission's (EC) VP for Competition Policy" gave a speech in Paris on February 10, 2012, titled "Industrial Policy and Competition Policy: Quo vadis Europa?"

He addressed, among other topics, communications standards and patents. He said that the EC will use antitrust enforcement to prevent misuse of patent rights.

See, full story.

Iran and the Internet

2/10. The Washington Post published a story on February 9, 2012, titled "Iran increasingly controls its Internet", by Thomas Erdbrink.

The Washington Post article states that "Iran's leaders are trying to get control over what is uploaded, posted and discussed on the Internet. And after a slow start, authorities are becoming more and more successful". In particular, software that enabled internet users in Iran to bypass the government's firewall "has stopped working".

Ed Black, head of the Computer and Communications Industry Association (CCIA), stated in a release on February 10 that "This appears to be another step toward creating a firewall in Iran to block access to the global Internet. Some have expressed concern this heralds the creation of a National Internet that would keep Iranian citizens within a walled-off domestic network much like an office Internet."

He wrote that "the US government and others who care about liberty need to speak out or sound alarms early when nations first place restrictions on the Internet so that the Internet is used as a tool for freedom not repression."

E-Rate Fraud

2/9. The U.S. District Court (EDLa) sentenced Gloria Harper to serve 30 months in prison for conspiring to defraud the Federal Communications Commission's (FCC) e-rate tax and subsidy program by providing bribes and kickbacks to school officials. The program has been plagued by waste, fraud and abuse since its creation by the FCC.

The Department of Justice (DOJ) stated in a release that "Harper conspired to provide bribes and kickbacks to school officials and employees responsible for the procurement of Internet access services at certain schools in Arkansas, Florida, Illinois and Louisiana."

The DOJ added that "in return, those individuals ceded control of the E-Rate competitive bidding process to Harper and a co-conspirator, ultimately allowing them to ensure E-Rate contracts at these schools were awarded to their companies."

See also, DOJ release of March 28, 2011, and "Tech Crime Report" in TLJ Daily E-Mail Alert No. 2,211, March 29, 2011, for information about prosecution of Harper's co-conspirators, Barrett White and Tyrone Pipkin.

FCC Chairman Julius Genachowski stated in a release that "The E-Rate program brings enormous benefits to students everywhere. I applaud today’s action by DOJ. This successful prosecution reflects the collaborative efforts of the DOJ and FCC to protect E-rate from waste, fraud, and abuse, and to deter future misconduct."

Rep. Lamar Smith Seeks Passage of E-Verify Bill

2/9. The Department of Homeland Security's (DHS) U.S. Immigration and Citizenship Services announced in a release on February 9, 2012, that "Self Check, a free online service of E-Verify that allows workers to check their own employment eligibility status, is now available in all 50 states".

Rep. Lamar Smith (R-TX), the Chairman of the House Judiciary Committee (HJC), which has jurisdiction over immigration legislation, stated in a release that "This will help U.S. workers make sure that their records are accurate so that they will have no problem getting a job if the employer uses E-Verify."

Rep. Lamar SmithRep. Smith added that "Twenty-three million Americans are currently unemployed or can't find full-time work. Meanwhile, seven million illegal workers hold jobs in the U.S."

Employer participation in the E-Verify program is currently voluntary. Rep. Smith wants to make participation mandatory.

The E-Verify program is an information technology (IT) based national identification system that is based upon accessing electronic databases that include names and social security numbers (SSNs). One of the purposes of this program is to transfer responsibility for enforcing immigration law to employers.

This bill is premised upon the assumptions that the government is capable of creating an IT based system that can enable employers to ascertain whether job applicants are eligible to be employed in the US, and that by effectively preventing ineligible persons from working, aliens will have little incentive to illegally enter into or stay in the US.

Rep. Smith also bylined an opinion piece published on February 6 in The National Review titled "Media Ignores Facts on Illegal Immigration". This piece states that "This web-based program quickly identifies individuals working illegally in the U.S. and protects jobs for legal workers by checking the Social Security numbers of new hires. Persons eligible to work in the U.S. are immediately confirmed 99.5 percent of the time, and it only takes a minute to run a new hire through E-Verify."

Rep. also stated in his release that "more should be done to encourage the use of E-Verify by American employers and employees."

Rep. Smith has introduced legislation to make employer participation in the e-verify program mandatory. He is the sponsor of HR 2164 LOC | WW] and the superseding HR 2885 [LOC | WW], both titled the "Legal Workforce Act".

The HJC amended and approved HR 2885 on September 22, 2012. See, story titled "Rep. Smith Introduces Bill to Mandate Use of Government Databases to Determine Employment Eligibility" in TLJ Daily E-Mail Alert No. 2,300, September 13, 2012. See also, HJC web page titled "Legal Workforce Act".

HR 2885 has 74 cosponsors. However, the HJC has not yet reported this bill, and the full House has not yet considered it. Nevertheless, Rep. Smith asserted in his National Review piece that "reporters from both the Wall Street Journal and USA Today portrayed the bill as unpopular. But these reporters failed to mention that 82 percent of likely voters -- including 78 percent of black voters and 72 percent of other minorities, primarily Hispanics -- think all U.S. employers should be required to use E-Verify. The truth is that E-Verify enjoys strong support from the American people".

The HJC has received testimony that the E-Verify program is error prone. Eligible workers are falsely not confirmed as eligible. Ineligible workers are falsely confirmed as eligible. See for example, February 10, 2011, prepared testimony of Richard Stana of the Government Accountability Office (GAO).

First, SSA databases contain errors. Second, an employee may list his or her name in a manner that is not consistent with the SSA's listing of that same person. Third, ineligible workers can circumvent the process by assuming the identity of eligible persons. Such identity fraud causes the E-Verify program to erroneously verify their eligibility for employment.

The Legal Workforce Act has some similarities to the notorious web sites bill, and the data retention bill. Rep. Smith is the sponsor of all three. All three relate to IT. All three would expand federal government authority. All three would impose mandates on businesses for the purposes of achieving governmental objectives.

Rep. Smith has expended a considerable amount of his own and the HJC's time and resources on these three bills. Yet, to date, Rep. Smith has failed to move any of these bills beyond the HJC.

The notorious web sites bill is HR 3261 [LOC | WW], the "Stop Online Piracy Act" or "SOPA". The data retention bill is HR 1981 [LOC | WW].

People and Appointments

2/9. The Senate confirmed Cathy Ann Bencivengo to be a Judge of the U.S. District Court for the Southern District of California, which district includes San Diego. See Congressional Record, February 9, 2012, at Page S544.

New York Drops Antitrust Action Against Intel

2/8. The Attorney General of the State of New York, or NYAG, and Intel entered into an Agreement [19 pages in PDF] under which the NYAG agrees to dismiss with prejudice its action against Intel in the U.S. District Court (DDel) alleging violation of federal and New York state antitrust law, and Intel agrees to make a payment of $6.5 Million.

The NYAG began its investigation of Intel in 2007. It filed its complaint [89 pages in PDF] on November 3, 2009. See, story titled "New York State Files Civil Antitrust Complaint Against Intel" in TLJ Daily E-Mail Alert No. 2,011, November 9, 2009.

The NYAG alleged that "Intel has engaged in a systematic worldwide campaign of illegal, exclusionary conduct to maintain its monopoly power and prices in the market for x86 microprocessors". It alleged that Intel violated Section 2 of the Sherman Act (15 U.S.C. § 2), and New York law (N.Y. Gen. Bus. Law § 340 et seq. and § 63(12) of the New York Executive Law).

On December 7, 2011 the District Court granted two of Intel's motions to dismiss claims. See, opinion and order regarding the New York Donnelly Act damages claim, and opinion and order regarding the NYAG's claims on behalf of non-state public entities. The District Court also granted a motion for partial summary judgment with respect to damages. See, opinion and order.

Doug Melamed, Intel's General Counsel, stated in a release that "Following recent court rulings in Intel's favor that significantly and appropriately narrowed the scope of this case, we were able to reach an agreement with New York to bring to an end what remained of the case. We have always said that Intel’s business practices are lawful, pro-competitive and beneficial to consumers, and we are pleased this matter has been resolved".

This case is State of New York v. Intel Corporation, U.S. District Court for the District of Delaware, D.C. No. Civ. No. 09-827-LPS.

EPIC Sues FTC to Compel Enforcement of Google Privacy Order

2/8. The Electronic Privacy Information Center (EPIC) filed a complaint [9 pages in PDF] in the U.S. District Court (DC) against the Federal Trade Commission (FTC) alleging that the FTC has failed to enforce its Decision and Order [7 pages in PDF] dated October 13, 2011, which relates to Google's privacy related practices.

The EPIC seeks "injunctive relief compelling the FTC to enforce the consent order". The EPIC wants the FTC to block Google from implementing parts of its new privacy policy, scheduled to take effect on March 1.

The complaint does not name Google as a defendant.

The EPIC alleges that Google's pending changes to its privacy policies violate the October 13 order, that the FTC has failed to take action to prevent such violation, and that the District Court should compel the FTC to take action against Google, before March 1.

See, full story.

More News

2/8. The White House news office released a short item titled "Harnessing Innovation for Global Development".

2/8. The White House news office stated in a release that US Vice President Joe Biden and People's Republic of China Vice President Xi Jinping spoke by telephone on February 7, 2012. The release states that "Following up on their discussions during Vice President Biden's August trip to China, the two leaders previewed the agenda for Vice President Xi's visit to the U.S. next week -- including a broad range of economic and trade issues and regional and global developments. Vice President Biden emphasized the importance of building a U.S.-China relationship that addresses practical issues important to both countries, and expressed support for efforts during Vice President Xi’s visit to further develop bilateral cooperation."

2/8. The Information Technology and Innovation Foundation (ITIF) released a paper [24 pages in PDF] titled "Innovation in Cities and Innovation by Cities". The author is the ITIF's Robert Atkinson.

2/8. The Government Accountability Office (GAO) released a report [10 pages in PDF] titled "Information Technology: SBA Needs to Strengthen Oversight of Its Loan Management and Accounting System Modernization".

2/8. The U.S. District Court (NDIll) found Hanjuan Jin guilty in a bench trial of theft of trade secrets of her former employer, Motorola Solutions. The court found her not guilty of economic espionage. The U.S. Attorneys Office (USAO) for the Northern District of Illinois stated in a release that she was a software engineer for Motorola, and that she "possessed more than 1,000 electronic and paper Motorola proprietary documents when she was stopped by U.S. customs officials as she attempted to travel on a one-way ticket to China in February 2007". The USAO also stated that she worked for Motorola from 1998 through February of 2006, when she took medical leave. She then worked in the People's Republic of China (PRC) for Sun Kaisens, a Chinese telecommunications company that developed products for the Chinese military. She then returned to Motorola, for two days, during which time she accessed "technical documents belonging to Motorola on its secure internal computer network", and then attempted to flea to the PRC with Motorola documents.

FTC Sends FCRA Warning Letters to Mobile Apps Marketers

2/7. The Federal Trade Commission (FTC) send warning letters to the marketers of mobile apps that provide background screening apps. The letters warn that they may be violating the Fair Credit Reporting Act (FCRA), and that the FTC may take action against them.

See, letter to Everify, Inc., letter to InfoPay, Inc., and letter to Intelligator, Inc.

These letters warn the marketers that if they have reason to believe the background reports they provide are being used for employment screening, housing, credit, or other similar purposes, they must comply with the FCRA.

The FCRA is codified at 15 U.S.C. §§ 1681-1681x.

The letter to Everify states that "At least one of your company's mobile applications involves background screening reports that include criminal histories. Employers are likely to use such criminal histories when screening job applicants. If you have reason to believe that your reports are being used for employment or other FCRA purposes you and your customers who are using the reports for such purposes must comply with the FCRA." (Footnote omitted.)

"This is true even if you have a disclaimer on your website indicating that your reports should not be used for employment or other FCRA purposes. We would evaluate many factors to determine if you had a reason to believe that a product is used for employment or other FCRA purposes, such as advertising placement and customer lists."

The FTC letter adds that "At this time, we have not made a determination as to whether your company is violating the FCRA", and "reserves the right to take action against you based on past or future law violations". The other letters are substantially similar.

People and Appointments

2/7. Sen. Patrick Leahy (D-VT), the Chairman of the Senate Judiciary Committee (SJC), gave another of his periodic speeches in the Senate regarding the confirmation of President Obama's judicial nominees. He again complained that the pace is too slow, and blamed Republicans. He said that "Senate Republicans have been blocking votes on 18 of the President's judicial nominees since last year" and noted that "President Obama has not recess appointed a single judicial nominee". He added that Republicans are using the filibuster. The 18 nominees at issue include Jacqueline Nguyen (9th Circuit), Stephanie Thacker (4th Circuit), Adalberto Jordan (11th Circuit), Rudolph Contreras (USDC/DC), and Ronnie Abrams and Margo Brodie (USDC/SDNY). See, Congressional Record, February 7, 2012, at Pages S362-3.

More News

2/7. The Office of the U.S. Trade Representative (OUSTR) announced in a release that the US and Japan "held a senior-level bilateral consultation on Japan's interest in the Trans-Pacific Partnership (TPP) negotiations.

UK Reports on Violent Extremism on the Internet

2/6. The United Kingdom's House of Commons' Home Affairs Committee released a report [184 pages in PDF] titled "Roots of violent radicalisation".

It concludes that "it proved difficult for us to gain a clear understanding of where violent radicalisation takes place. In terms of the four sectors we explored -- universities, prisons, religious institutions and the internet -- we conclude that religious institutions are not a major cause for concern but that the internet does play a role in violent radicalisation, although a level of face-to-face interaction is also usually required. The role of prisons and universities was less obvious."

The UK's Terrorism Act 2006 includes a notice and take down provision under which service providers are required to take down content after the government has notified them that the content is illegal terrorist content under UK law.

However, this does not reach content hosted outside of the UK. Also, service providers have no duty to monitor and take down violent extremist content on their own initiative.

The just released report states that the UK's Counter-Terrorism Internet Referral Unit "does limited but valuable work in challenging internet service providers to remove violent extremist material where it contravenes the law."

It recommends that "the Government work with internet service providers in the UK to develop a Code of Conduct committing them to removing violent extremist material, as defined for the purposes of section 3 of the Terrorism Act 2006. Many relevant websites are hosted abroad: the Government should also therefore strive towards greater international cooperation to tackle this issue."

It further concludes that "Given the impossibility of completely ridding the internet of violent extremist material, it is important to support defences against it. We support the Government’s approach to empowering civil society groups to counter extremist ideology online. The whole area of communications technology and social networking is complex and extremely fast-moving. A form of interaction that is commonly used by thousands or even millions of people at one point in time may only have been developed a matter of months or even weeks earlier. It follows that legislation and regulation struggle to keep up and can provide a blunt instrument at best."

Obama Nominates Baer to Lead DOJ Antitrust Division

2/6. President Obama nominated William Baer to be Assistant Attorney General in charge of the Department of Justice's (DOJ) Antitrust Division. See, White House news office release and release.

Sharis Pozen is the acting AAG in charge of the Antitrust Division. The previous AAG was Christine Varney. See, story titled "Varney to Leave Antitrust Division" in TLJ Daily E-Mail Alert No. 2,255, July 11, 2011.

Baer has been an attorney in the Washington DC office of the law firm of Arnold & Porter since 1980, with the exception of 1995 through 1999. He is now chairman of its antitrust practice group.

He has represented Cisco Systems and Micron Technology. He also represented Intel in connection with its acquisition of McAfee. See, story titled "Intel to Acquire McAfee" in TLJ Daily E-Mail Alert No. 2,127, August 27, 2010.

During the Clinton administration he was head of the Federal Trade Commission's (FTC) Bureau of Competition (BOC), the antitrust arm of the FTC. He served under former FTC Chairman Robert Pitofsky.

While working at the FTC, Baer oversaw the FTC's review of numerous transaction, including Staples and Office Depot, and Time Warner and Turner Broadcasting System.

Baer was also head of the BOC when it filed a complaint against Intel charging it with violation of antitrust law. See, TLJ summary of that action, and TLJ stories:

And recently, Baer represented Intel in connection with the FTC's 2009 action against Intel. See, stories titled "FTC Files Antitrust Charges Against Intel by Administrative Complaint Under FTC Act" and "Commentary: FTC Antitrust Procedure" in TLJ Daily E-Mail Alert No. 2,204, December 17, 2009. See also, stories titled "FTC and Intel Settle Antitrust Claims", "Reaction to the FTC Intel Settlement", and "Commentary on Antitrust Processes" in TLJ Daily E-Mail Alert No. 2,018, August 4, 2010.

See also, speeches delivered by Baer while at the FTC.

Go to News from February 1-5, 2012.