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UK Online Harms Bill, coming next year, will propose fines of up to 10% of annual turnover for breaching duty of care rules

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The UK is moving ahead with a populist but controversial plan to regulate a wide range of illegal and/or harmful content almost anywhere online such stuff might pose a risk to children. The government has set out its final response to the consultation it kicked off back in April 2019 — committing to introduce an Online Safety Bill next year.

“Tech platforms will need to do far more to protect children from being exposed to harmful content or activity such as grooming, bullying and pornography. This will help make sure future generations enjoy the full benefits of the internet with better protections in place to reduce the risk of harm,” it said today.

In an earlier partial response to the consultation on its Online Harms white paper ministers confirmed the UK’s media regulator, Ofcom, as its pick for enforcing the forthcoming rules.

Under the plans announced today, the government said Ofcom will be able to levy fines of up to 10% of a company’s annual global turnover (or £18M, whichever is higher) on those that are deemed to have failed in their duty of care to protect impression eyeballs from being exposed to illegal material — such as child sexual abuse, terrorist material or suicide promoting content.

Ofcom will also have the power to block non-compliant services from being accessed in the UK — although it’s not clear how exactly that will be achieved (or whether the legislation will seek to prevent VPNs being used by Brits to access blocked Internet services).

The regulator’s running costs will be paid by companies that fall under the scope of the law, above a threshold based on global annual revenue, per the government, although it’s not yet clear where that pay-bar will kick in (nor how much tech giants and others will have to stump up for the cost of the oversight).

The online safety ‘duty of care’ rules are intended to cover not just social media giants like Facebook but a very wide range of Internet services — from dating apps and search engines to online marketplaces, video sharing platforms and instant messaging tools, as well as consumer cloud storage and even video games that allow relevant user interaction.

P2P services, online forums and pornography websites will also fall under the scope of the laws, as will quasi-private messaging services, according to a government press release.

That raises troubling questions about whether the legal requirements could put pressure on companies not to use end-to-end encryption (i.e. if they face being penalized for not being able to monitor robustly encrypted content for illegal material).

“The new regulations will apply to any company in the world hosting user-generated content online accessible by people in the UK or enabling them to privately or publicly interact with others online,” the government writes in a press release.

The rules will include different categories of responsibility for content and activity — with a top tier (category 1) only applying to companies with “the largest online presences and high-risk features” which the government said is likely to include Facebook, TikTok, Instagram and Twitter.

“These companies will need to assess the risk of legal content or activity on their services with ‘a reasonably foreseeable risk of causing significant physical or psychological harm to adults’. They will then need to make clear what type of ‘legal but harmful’ content is acceptable on their platforms in their terms and conditions and enforce this transparently and consistently,” it said.

Category 1 companies will also have a legal requirement to publish transparency reports about the steps they are taking to tackle online harms, per the government’s PR.

While all companies that fall under the scope of the law will be required to have mechanisms so people can easily report harmful content or activity while also being able to appeal the takedown of content, it added.

The government believes that less than three per cent of UK businesses will fall within the scope of the legislation — adding that “the vast majority” will be Category 2 services.

Protections for free speech are also slated as being baked in — with the government saying the laws will not affect articles and comments sections on news websites, for example. 

The legislation will contain provisions to impose criminal sanctions on senior managers (introduced by parliament via secondary legislation). On this the government added that it will not hesitate to use the power if companies fail to take the new rules seriously (such as by not responding “fully, accurately and in a timely manner” to information requests from Ofcom).

Commenting on the plans in a statement, digital secretary Oliver Dowden said: “I’m unashamedly pro tech but that can’t mean a tech free for all. Today Britain is setting the global standard for safety online with the most comprehensive approach yet to online regulation. We are entering a new age of accountability for tech to protect children and vulnerable users, to restore trust in this industry, and to enshrine in law safeguards for free speech.

“This proportionate new framework will ensure we don’t put unnecessary burdens on small businesses but give large digital businesses robust rules of the road to follow so we can seize the brilliance of modern technology to improve our lives.”

In another supporting statement, home secretary Priti Patel added: “Tech companies must put public safety first or face the consequences.”

Also commenting, Ofcom CEO, Dame Melanie Dawes, welcomed its new broader oversight remit, adding in a statement that: “Being online brings huge benefits, but four in five people have concerns about it. That shows the need for sensible, balanced rules that protect users from serious harm, but also recognise the great things about online, including free expression. We’re gearing up for the task by acquiring new technology and data skills, and we’ll work with Parliament as it finalises the plans.”

The government has said it will publish Interim Codes of Practice today to provide guidance for companies on tackling terrorist activity and online child sexual exploitation prior to the introduction of legislation — which is unlikely to make it into law before late 2021 at the earliest to allow adequate time for parliamentary debate and scrutiny.

And while a noisy political push to ‘protect kids’ online can expect to enjoy plenty of tabloid-level support, the wide-ranging application of the duty of care rules the government is envisaging — with large swathes of the UK’s tech sector set to be impacted — means ministers can expect to attract plenty of homegrown criticism too, from business groups, entrepreneurs and investors and legal and policy experts, including over specific concerns about knock-on impacts on privacy and security.

Its plan to push ahead with an Online Safety Bill that will impact scores of smaller digital businesses, instead of zeroing in on the handful of platform giants that are responsible for generating high volumes of harms, has already attracted criticism from the tech sector.

Coadec, a digital policy group that advocates for startups and the UK tech sector, branded the plan “a confusing minefield” for entrepreneurs — arguing it will do the opposite of fostering digital competition, counteracting other measures recently announced by the government in response to concerns about market concentration in the digital advertising sphere.

“Last week the Government announced a new unit within the CMA [Competition and Markets Authority] to promote greater competition within digital markets. Days later they have announced regulatory measures that risk having the opposite effect,” said Dom Hallas, Coadec’s executive director in a statement. “86% of UK investors say that regulation aiming to tackle big tech could lead to poor outcomes that damage tech startups and limit competition — these plans risk being a confusing minefield that will have a disproportionate impact on competitors and benefit big companies with the resources to comply.”

“British startups want a safer internet. But it’s not clear how these proposals, which still cover a huge range of services that are nowhere near social media from ecommerce to the sharing economy, are better targeted than the last time government published proposals nearly a year and a half ago,” he added. “Until the Government starts to work collaboratively instead of consistently threatening startup founders with jail time it’s not clear how we’re going to deliver proposals that work.”

One gap in the government’s proposal is financial harms — with issues such as fraud and the sale of unsafe goods explicitly excluded from the framework (as it says it wants the regulations to be “clear and manageable” for businesses and to avoid the risk of duplicating existing rules).

Some “lower-risk” services may also be exempt from the duty of care requirement, per the government, to avoid the law being overly. burdensome.

Email services will also not be in scope, it confirmed.

And while it says some types of advertising will be in scope (such as influencer ads posted on social media) ads placed on an in-scope service via a direct contract between an advertiser and an advertising service (such as Facebook or Google Ads) will be exempt because “this is covered by existing regulation” — which looks set to let the adtech duopoly off the harmful ads hook without good clear reason.

After all, existing UK regulations do not seem to have done much to stem the tide of crypto scam ads running on Facebook (or served via Google’s ad tools) in recent years — which led to a campaign by a consumer advice personality to get Facebook and other companies to clean up their act, for example.

Consumer group Which? has criticized the lack of government attention to financial scams in the Online Safety Bill. In a response statement, Rocio Concha, its director of policy and advocacy, said: “It’s positive that the government is recognising the responsibility of online platforms to protect users, but it would be a big missed opportunity if online scams were not dealt with through the upcoming bill. Our research has shown the financial and emotional toll of scams and that social media firms such as Facebook and search engines like Google need to do much more to protect users.

“We look forward to the detail and hope to see a clear plan to give online platforms greater responsibility for fraudulent content on their sites, including having in place better controls to prevent fake adverts from appearing, so that all users can be confident that they will truly be safe online.”

European Union lawmakers are due to unveil their own pan-EU policy package to regulate illegal and harmful content later today — but the Digital Services Act will tackle the sale of illegal goods online as well as proposing to harmonize rules for reporting troublesome content on online services.

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President Joe Biden commits to replacing entire federal fleet with electric vehicles

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President Joe Biden said Monday the U.S. government would replace the entire federal fleet of cars, trucks and SUVs with electric vehicles manufactured in the United States, a commitment tied to a broader campaign promise to create 1 million new jobs in the American auto industry and supply chains.

The commitment, if it bears out, could give a boost to U.S. automakers, particularly those that have diverse portfolios that include passenger cars, commercial vans and light trucks.

Biden made the comments prior to signing the Made in America executive order, which places stricter rules on the federal government’s procurement practices. The government has existing “buy American” rules, which states that a certain amount of a product must be made in the U.S. for a purchase to qualify for a federal contract.

Biden said this order closes loopholes and aims to increase purchases of products made in the United States. The executive order increases that product threshold and the price preference for domestic goods — meaning the difference in price from which the government can buy a product for a non-U.S. supplier. It also updates the process for how the government decides if a product was sufficiently made in America.

In the midst of his speech, Biden said the buy American directive would extend to the federal government’s massive fleet of vehicles.

“The federal government also owns an enormous fleet of vehicles, which we’re going to replace with clean electric vehicles made right here in America, by American workers, creating millions of jobs — a million auto worker jobs.”

The opportunity is a large one. The U.S. government had more than 645,000 vehicles in its fleet in 2019, the most recent data available from the General Services Agency. Of those, about 224,000 are passenger vehicles and more than 412,000 are trucks.

“GSA is committed to exploring opportunities to leverage the purchasing and leasing power of the federal government to address the climate crisis, including greening the federal fleet,” a GSA spokesperson told TechCrunch in an emailed statement. “GSA currently manages over 224,000 passenger vehicles in its fleet to support the Federal Government’s mission. By leveraging clean energy vehicle technologies, GSA will support the President’s climate goals, while working with the American automotive manufacturing industry to ensure that these next generation vehicles are built in America by American workers.”

The directive won’t be easy to fulfill. Many of these federal vehicles are leased, which could slow the transition depending on the contract lengths. There are other obstacles, including charging infrastructure and supply. And while it doesn’t appear to be a requirement, Biden has publicly stated numerous times — including Monday — that he supports union automotive jobs.

Tesla is considered the dominant U.S. manufacturer of electric vehicles. However, the company’s lack of union workers and the higher cost of its vehicles — even the less expensive Model 3 — could be a barrier.

Ford and GM might not have a vast supply of electric vehicles at the moment, but they do have union shops and both automakers are investing heavily to expand their EV offerings.

GM launched a new business unit earlier this month to offer commercial customers an ecosystem of electric and connected products as part of the company’s $27 billion bid to become a leading electric automaker. The new business, called BrightDrop, will begin with two main products: an electric van called the EV600 with an estimate range of 250 miles and a pod-like electric pallet dubbed EP1.

GM has said it plans to bring 30 new electric vehicles to a global market through 2025. More than two-thirds of those launches will be available in North America and every one of GM’s brands, including Cadillac, GMC, Chevrolet and Buick, will be represented, according to the automaker.

Meanwhile, Ford revealed in November a configurable all-electric cargo van called the E-Transit as part of its $11.5 billion investment in electrification. Ford has largely focused its electrification efforts on the consumer market, notably the Mustang Mach-E. The E-Transit, which will be built at its Kansas City Assembly Plant in Claycomo, Missouri, is aimed at the commercial sector.

There are a growing number of newer EV entrants as well, including Rivian, Lordstown Motors and Fisker. Rivian is expected to begin producing and delivering its electric pickup truck in July, followed by its all-electric SUV. Rivian is also developing and assembling electric vans for Amazon.

Biden’s call to transform the fleet supports statements he made throughout his campaign. Biden pledged to “use all the levers of the federal government,” including purchasing power, R&D, tax, trade, and investment policies to position the U.S. to be the global leader in the manufacture of electric vehicles and their input materials and parts.

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Facebook News launches in the UK, the first international market for its curated news portal

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As the United Kingdom prepares to sharpen its focus on how it regulates big tech companies, Facebook is taking a big step up in the role it plays in presenting media to the U.K. public, and into how it works with the country’s media industry.

Today it is launching Facebook News in the U.K., Facebook’s first market outside of the U.S. for its dedicated, curated news portal — accessed, like the U.S. version, through a tab in the Android or iOS app menu.

The portal will launch with content from hundreds of local and national media organizations including Channel 4 News, Daily Mail Group, DC Thomson, Financial Times, Sky News and Telegraph Media Group. The Economist, The Guardian, The Independent, STV and hundreds of local news sites from Archant, Iliffe, JPI Media, Midlands News Association, and Reach, as well as “lifestyle” titles GQ, Cosmopolitan, Glamour, Vogue and others were announced in an earlier list of partners last year.

Again, as with the U.S. version, users will be provided a list of curated top stories of the day; a list of personalized stories based on news sources you might already follow or interests you have (these might be from publications you don’t already follow); and dedicated news sections for sports, entertainment, health and science and technology. Users can indicate when they like stories, or when they want to hide them to train the algorithms better.

Facebook has confirmed to us that it will be working with a service called Upday to curate the stories that appear on News. “The product is a mix of curated, top stories and personalized links chosen by algorithm,” a spokesperson said. Upday appears to be a joint collaboration between German publisher Axel Springer and Samsung, which also runs a news service on its phones powered by it.

It is not clear what the financial terms of the deal is between Facebook and Upday, but reportedly, the licensing deals Facebook is cutting with publishers to place their content in News collectively run into the tens of millions of pounds, with the biggest publishers making millions a year from the the agreements. While those figures might pale to what Facebook makes in ad revenues globally — that reaches into the tens of billions of dollars quarterly — they represent significant sums for the beleaguered U.K. media industry.

People have long used newsfeeds on Facebook and other social sites to catch up with news while also browsing posts from friends, Groups and Pages that they follow. Facebook News aims to take that a step further, as a curated page for links and headlines from hundreds of publications in the country to provide users of its mobile apps a one-stop place to read the stories of the moment.

Social media continues to be a major source of news for consumers, but as we’ve seen, a very skewed and flawed source at that.

Within that context, Facebook says that its intention with Facebook News is to provide a more balanced and dedicated mix of news to people beyond what they might encounter in their newsfeeds, while also tailoring it to users’ interests.

It also helps that Facebook News provides yet another way for Facebook — which has made efforts in video, entertainment content, mentoring and job-hunting, Nextdoor-style community listings, peer-to-peer selling, and more — to continue diversifying away from the Newsfeed for those who have grown bored with that: now, people can come to the Facebook app to browse news, too.

Still, this international expansion has been a long time coming: Facebook News first launched as a test in the US more than a year ago, in October 2019, before rolling out to all users last June.

No word from Facebook on how many users or engagement the U.S. version of Facebook News has picked up, except that “it has grown steadily,” according to a spokesperson.

It’s not clear why there’s been such a long gap between its first efforts in the U.S. and the U.K. launch today, but Facebook has had more going on in addition to securing those licensing deals to roll out in this market.

Launching a new news portal, with the message that it’s designed to “help” publishers, takes on a new dimension when you consider that Facebook has also been in the crosshairs of regulators in Europe, who have been on a long-term mission to scrutinize the reach of big tech companies. In the UK, that is soon taking the form of a new “pro-competition” Digital Market Unit that will re-examine the role companies like Facebook and Google play in advertising, media and more. 

Whether those regulatory moves will impact how a service like Facebook News works, or what revenue cuts and usage data are shared with news partners, remains to be seen.

In the meantime, it’s full speed ahead for more scaling: Facebook confirmed plans last year that its long-term aim is for a bigger international expansion for Facebook News, with the longer list of countries including Brazil, France, Germany, and India. In a blog post today, Facebook’s director of news partnerships in Europe, Jesper Doub, confirmed France and Germany were next in line for Facebook News, although no launch dates were specified.

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Daily Crunch: Twitter unveils Birdwatch

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Twitter pilots a new tool to fight disinformation, Apple brings celebrity-guided walks to the Apple Watch and Clubhouses raises funding. This is your Daily Crunch for January 25, 2021.

The big story: Twitter unveils Birdwatch

Twitter launched a new product today that it says will offer “a community-based approach to misinformation.”

With Birdwatch, users will be able to flag tweets that they find misleading, write notes to add context to those tweets and rate the notes written by others. This is supposed to be a complement to the existing system where Twitter removes or labels particularly problematic tweets, rather than a replacement.

What remains to be seen: How Twitter will handle it when two or more people get locked into a battle and post a flurry of conflicting notes about whether a tweet is misleading or not.

The tech giants

Walking with Dolly — Apple discusses how and why it brought Time to Walk to the Watch.

Google pledges grants and facilities for COVID-19 vaccine programs — The tech giant is one of several large corporations that have pledged support to local government agencies and medical providers to help increase vaccinations.

Facebook will give academic researchers access to 2020 election ad targeting data — Starting next month, Facebook will open up academic access to a data set of 1.3 million political and social issue ads.

Startups, funding and venture capital

Clubhouse announces plans for creator payments and raises new funding led by Andreessen Horowitz — While we try to track down the actual value of this round, Clubhouse has confirmed it will be introducing products to help creators on the platform get paid.

Taboola is going public via SPAC — The transaction is expected to close in the second quarter, and the combined company will trade on the New York Stock Exchange under the ticker symbol TBLA.

Wolt closes $530M round to continue expanding beyond restaurant delivery — The Helsinki-based online ordering and delivery company initially focused on restaurants but has since expanded to other verticals.

Advice and analysis from Extra Crunch

Qualtrics raises IPO pricing ahead of debut — After being acquired by SAP, Qualtrics announced it would spin out as its own public company.

Fintechs could see $100 billion of liquidity in 2021 — The Matrix Fintech Index weighs public markets, liquidity and a new e-commerce trend.

Unpacking Chamath Palihapitiya’s SPAC deals for Latch and Sunlight Financial — There’s no escaping SPACs, at least for a little while.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

Moderna says it’s making variant-specific COVID-19 vaccines, but its existing vaccine should still work — Moderna has detailed some of the steps it’s taking to ensure that its vaccine remains effective in the face of emerging strains of the SARS-CoV-2 virus that leads to COVID-19.

Original Content podcast: ‘Bridgerton’ is an addictive reimagining of Jane Austen-style romance — Did I mention that the cast is insanely good-looking?

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

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