Antitrust Modernization Commission Releases Revised Memo on Study Groups and Issues

2/25. The Antitrust Modernization Commission (AMC) released a revised draft of a memorandum [5 pages in PDF] on the formation of study groups, and issues selected for study.

The AMC last met on January 13, 2005. It next meeting is on March 24, 2005 from 10:00 AM - 12:00 NOON. This public meeting will be held at the Federal Trade Commission (FTC), Conference Center Rooms A & B, 601 New Jersey Ave., NW.

Two of the study groups are technology related. They are named "New Economy Issues" and "Regulated Industries".

The "New Economy Issues" study group will address "Antitrust analysis applied to industries characterized by significant technological innovation" and "Balancing the protection of IP rights and promotion of competition".

The memorandum identifies two intellectual property rights issues to be addressed by the new economy issues study group: "Should industries involving significant technological innovation be treated differently under the antitrust laws?" and "How does the current intellectual property regime affect competition?"

This study group will also examine single firm conduct, which would include such things as product design by companies like Microsoft. The memorandum states that this study group will examine the following: "Are there features of the modern (or ``new´´) economy that warrant different treatment -- whether harsher or more lenient -- of single-firm or vertical conduct in ``new economy´´ industries?"

The memorandum does not identity any regulated industries, or industry sector regulators that conduct antitrust related proceedings. However, the "Regulated Industries" study group would address communications and information technology industries, and the Federal Communications Commission (FCC).

The memorandum lists three issues to be studied by this regulated industries study group.

First, "How should responsibility for the enforcement of antitrust laws in regulated industries be divided between the antitrust agencies and other regulatory agencies?"

Second, "What is the appropriate standard for determining the extent to which the antitrust laws apply to regulated industries where the regulatory structure contains no specific antitrust exemption and/or contains a specific antitrust savings clause?"

And third, "Should Congress and regulatory agencies set industry-specific standards for particular antitrust violations that may conflict with general standards for the same violations?"

Finally, the memorandum identifies one more issue: "Undertake a comprehensive empirical examination of the effects of antitrust enforcement on consumers and the economy." However, it states that this issue is "Deferred for additional development".

People and Appointments

2/25. Dane Snowden will become VP, Strategic Relations at the Cellular Telecommunications and Internet Association (CTIA). He is currently Chief of the Federal Communications Commission's (FCC) Consumer & Governmental Affairs Bureau. See, CTIA release.

Sen. Specter Holds News Conference

2/24. Sen. Arlen Specter (R-PA), the Chairman of the Senate Judiciary Committee, held a news conference in the Capitol Building on Thursday morning, February 24, 2005, He addressed, and answered questions, on a wide range of issues, including judicial nominations, ChoicePoint, and the security of information in electronic databases. See, full story.

Senate Judiciary Committee Could Hold Hearings on ChoicePoint, Technology, Privacy and Security

2/24. Sen. Patrick Leahy (D-VT) wrote a letter on February 22 to Sen. Arlen Specter (R-PA), the Chairman of the Senate Judiciary Committee (SJC), in which he referenced ChoicePoint's sale of personal information of 145,000 individuals to identity thieves. He urged Sen. Specter to schedule hearings on this matter, and "and other important issues relating to technology, privacy and security protections", which he outlined in his letter. Then, Sen. Specter stated at a news conference on February 24 that, in response to Sen. Leahy's request, the SJC "could" hold a hearing.

Sen. Specter said that "I got a letter from Sen. Leahy yesterday on the identity theft issue. And, I immediately said we could hold a hearing. I don't have to preside on all of these hearings. We have subcommittees and subcommittee chairmen."

Sen. Leahy, who is the ranking Democrat on the SJC, began his letter by stating that "In recent days, we have learned that the personal information of 145,000 Americans was sold by a private corporation, ChoicePoint Inc., to criminals posing as legitimate businesses."

ChoicePoint wrote in its web site that "a small number of very organized criminals posing as legitimate companies gained access to personal information about consumers", and that this was "a fraud committed against us". ChoicePoint also estimated that it released information to identity thieves on 144,778 individuals. See, story titled "ChoicePoint Describes Its Sale of Data to Identity Thieves" in TLJ Daily E-Mail Alert No. 1,081, February 23, 2005.

Sen. Leahy continued that "We are in an era in which advanced technologies have opened up new possibilities that even a few years ago seemed out of reach. Among those advances is the rapid collection, sharing and analyzing of large amounts of data previously unavailable without great effort, if at all. These powerful tools have enhanced our law enforcement and homeland security efforts, as well as made our lives more convenient and enjoyable."

He added that "These advances also present new challenges that require vigilant congressional scrutiny. The American people have the right and the need to know and understand how their personal information is being used.  It is time for the sunshine of congressional oversight to begin clarifying some of these issues."

Sen. Leahy then enumerated five issues that he urged the Committee to examine -- data brokering, government access to commercial data, government data mining, the impact of new technologies on surveillance law, and data outsourcing.

"The rapid rise of database giants such as ChoicePoint, Acxiom, and LexisNexis has created new challenges for privacy and security.  These information brokers have amassed billions of private and public records on individuals that include sensitive information such as financial, travel, medical and insurance data", wrote Sen. Leahy. "Very little is known about the integrity and handling of this information, and there are insufficient rules and oversight to protect public privacy."

Sen. Leahy next addressed government use of commercial databases. "Increasingly, the FBI, DHS and many other agencies turn to information brokers to gather and analyze individuals’ personal data on their behalf for a variety of purposes -- e.g., to screen airline travelers or identify possible terrorists. ... The Committee should look at how to maximize the benefits of this capability for legitimate purposes, while ensuring that our legal protections on accessing and using such data keep pace."

He also wrote about data mining. "New technologies have allowed computers to rapidly sort and process information for a myriad of purposes, including identifying how people are related, recognizing patterns in human behavior and attempting to predict future actions." He asserted that data mining can present significant privacy issues that should be examined by the Committee.

Sen. Leahy also wrote that "Radio Frequency Identification (RFID) Technology, GPS, keystroke logging, spyware, and enhanced data storage are all developments that increase our ability to know and track individuals. These changes have created new opportunities, as well as challenges for law enforcement.  An important question for the Committee is whether our wiretapping and other applicable laws have kept pace as technology has broadened the type and nature of information collection."

The Senate Judiciary Committee (SJC) may hold hearings on this subject, but the Senate Commerce Committee (SCC) has jurisdiction over many of the legislative proposals that are likely to be advanced, and oversight authority with respect to the agency that would likely oversee any expanded or new regulatory regime for data aggregators, the Federal Trade Commission (FTC).

Also, the Senate Homeland Security and Government Affairs Committee has jurisdiction over the Department of Homeland Security's (DHS) data practices. The SJC does has limited jurisdiction in this area -- over legislation regarding crimes, criminal procedure, and surveillance by law enforcement entities. It also oversees the Department of Justice, which includes the FBI.

Nevertheless, any SJC hearings would serve the purpose of gathering and publicizing information related to this issue.

Also, Sen. Specter and Sen. Leahy are likely to be more favorably disposed to advancing this issue than their counterparts on the SCC, Sen. Ted Stevens (R-AK) and Sen. Patrick Inouye (D-HI).

Bush and Putin Discuss Russian Entry into the WTO

2/24. U.S. President Bush and Russian President Putin held a joint news conference in Bratislava, Slovakia, at which they discussed negotiations over Russia's accession to the World Trade Organization (WTO). Bush said that "We agreed to accelerate negotiations for Russia's entry into the WTO."

Putin said that "We have paid great attention to economic cooperation including, as has already been said, the possible accession of Russia to the WTO. We have reaffirmed our intention to continue our search for mutually acceptable solutions of the outstanding problems. Russia is ready for a reasonable compromise, but this compromise should not go beyond the usual responsibilities assumed by countries acceding to the WTO."

"I'm sure that not only Russian economy, but also the U.S. economy are interested in the positive outcome." Putin added that "We have also discussed the status and prospects of Russia's cooperation in science, high-tech; in particular, in the exploration of outer space."

The U.S. and Russia also issued a brief joint statement regarding their negotiations that references intellectual property rights. They wrote that the two nations "are committed to working together to complete our bilateral negotiations for Russia's accession".

"The results of the negotiations will enhance commercial opportunities between our two countries, support economic reforms that Russia has made a priority, and further integrate Russia into the world economy. Our trade ministers have made progress in pursuing our bilateral negotiations, and we have instructed them to accelerate these efforts."

The statement adds that "Russia and the United States will continue to work closely in bilateral and multilateral negotiations to resolve remaining issues in ways that benefit both countries. The rules-based system of the WTO will further strengthen our economic relationship in all areas, including agriculture, manufacturing, services, and the improved protection and enforcement of intellectual property rights."

It concludes that "We will work to identify areas for progress in our bilateral negotiations that will give momentum to Russia's accession to the WTO and to Russia's economic reform program."

European Trade Commissioner Addresses IPR in China

2/24. Peter Mandelson, the European Commission for Trade, gave a speech in Beijing, China, in which he discussed intellectual property, and other trade issues.

He said that "the Chinese market offers a huge opportunity for European companies. China is a voracious consumer of European goods, technology and services. China is also a competitor in many areas -- but competition, provided it is fair competition, is a good thing."

Mandelson (at right) continued, "But here is the caveat. If we are to build a stronger partnership, I believe Europeans need to have a clearer sense that China is assuming the responsibilities that accompany its new power within the global community. As we all learn in life, the greater our power the greater our responsibility."

He said that China can demonstrate responsibility and leadership in Doha Development Agenda negotiations, and in strengthening and enforcing intellectual property rights.

He argued that "China has an overwhelming interest in strengthening a rules based trading system. Those rules are already working in China's favour and they will continue to do so in the years ahead. In the Doha Round we need to deliver a better global environment for trade which will reinforce the WTO and its rules of opportunity across the globe."

Mandelson then alluded the Winton Churchill's November 10, 1942 speech about El Alamein being the "end of the beginning". Mandelson said that "I do wish to say today that your membership of the WTO was neither the end, nor the beginning of the end. It was the end of a beginning which has already brought you many advantages as foreign investment keeps pouring in and your economy continues to surge forward. So although I recognise the particular status of China as a ``recently acceded´´ WTO Member, we are looking to you to contribute again."

He then discussed intellectual property. "To put the Doha Round back in motion we need to move urgently to construct a balanced package covering agriculture, trade in industrial goods, and trade in services. And alongside this we need to strengthen the rules governing intellectual property and the use of anti-dumping measures."

Mandelson continued that "China has made remarkable progress in bringing its legislation on intellectual property up to date. But in many ways that is only the beginning. The real test is when you start to enforce intellectual property rights vigorously throughout the country. I wish to work with China urgently on this, to promote better enforcement. It is in your interest too, because you are fast becoming an innovation-based society and you want to attract more foreign technology. You cannot have the one without the other."

He added that "Other areas we need to work on together include liberalising the banking sector, strengthening accountancy standards and property rights more generally, and corporate governance. In some areas industrial policies continue to give undue privileges to domestic companies."

6th Circuit Rules in Cell Tower Case

2/24. The U.S. Court of Appeals (6thCir) issued its opinion [PDF] in Wireless Income Properties v. Chattanooga, a case regarding the construction of wireless communications towers, and the often litigated applicable section of the Communications Act, 47 U.S.C. § 332(c)(7). The Appeals Court also held that a violation of § 332 gives rise to an action for violation of 42 U.S.C. § 1983.

Wireless Income Properties (WIP) builds communications towers. It filed applications for building permits with the City of Chattanooga. The city then passed, and then extended, an ordinance imposing a moratorium on the issuance of building permits for new towers. It then passed an ordinance that repealed the moratorium, but rendered WIP's applications defective.

WIP filed a complaint in U.S. District Court (EDTenn) against the city and its administrator alleging violation of 47 U.S.C. § 332(c)(7)(B), which limits states' authority to regulate the placement, construction and modification of personal wireless service towers, and 42 U.S.C. § 1983, which provides a civil action for damages for deprivation of federal rights by states.

Section 332. § 332 provides in part that "The regulation of the placement, construction, and modification of personal wireless service facilities by any State or local government or instrumentality thereof--
  (I) shall not unreasonably discriminate among providers of functionally equivalent services; and
  (II) shall not prohibit or have the effect of prohibiting the provision of personal wireless services."

The District Court ordered the city to act on WIP's pending applications within sixty days.

The Appeals Court reversed. It wrote that "Were we to affirm the district court's order giving the City sixty days to act upon the permit applications, we would subject the parties to further litigation. On remand the City would inevitably again reject Wireless's applications, albeit likely in a formal written decision. ... Wireless would then challenge this decision in federal court. Given the Congressional intent embodied in the TCA to avoid multiple rounds of litigation, we conclude that the proper remedy in this case is injunctive relief compelling the City to grant Wireless's permit applications."

Section 1983 and the Communications Act. § 1983 provides, in part, that "Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress ..."

Nothing in § 332, or elsewhere in the Communications Act, forecloses a § 1983 action based upon a state violation of rights granted by § 332. Also, § 332 provides for injunctive relief. § 1983 allows the recovery of monetary damages.

The District Court held that the remedy provided by § 1983 is not available for violations of the Communications Act. The Court of Appeals reversed. It reasoned that § 332 demonstrates by its insufficient remedial scheme that the Congress did not intend to preclude a § 1983 remedy.

Various circuits have reached different on this issue. For example, the U.S. Court of Appeals (3rdCir) held in Nextel Partners Inc. v. Kingston Township that there is no § 1983 remedy. The opinion in this case is reported at 286 F.3d 687. In contrast, the U.S. Court of Appeals (9thCir) held in City of Rancho Palos Verdes v. Abrams that there is a § 1983 remedy. See, 354 F.3d 1094.

The Supreme Court has granted certiorari in City of Rancho Palos Verdes. It heard oral argument on January 19, 2005. See, Supreme Court calendar. That proceeding is Sup. Ct. No. 03-1601. Hence, the conclusion of the Court of Appeals in the present case may not long be the rule in the 6th Circuit.

The Solicitor General weighed in on the side of state and local governments. It wrote in its amicus curiae brief that "Determining whether an alleged violation of a federal statute gives rise to a Section 1983 action generally involves a two-part inquiry. The court must first ask whether the plaintiff has shown that the statutory provision in question gives rise to a federal right. Where the existence of a federal right is established, Section 1983 is unvailable upon a showing that Congress either expressly shut the door to private enforcement or impliedly created a comprehensive remedial scheme that is incompatible with enforcement under Section 1983."

It then argued that "Section 332(c)(7)'s scheme is comprehensive in that it permits aggrieved persons to bring suit and obtain meaningful judicial relief for violations of the statutory requirements at issue in a way that is specifically targeted to the relevant context. A statutory scheme need not be complex in order to be sufficiently comprehensive to reflect an intent to foreclose resort to Section 1983. If a statute expressly creates a cause of action that provides for meaningful relief, it is "comprehensive" in the relevant sense."

This case is State of Tennessee ex rel Wireless Income Properties, LLC v. City of Chattanooga and William MacDonald, App. Ct. No. 03-6608, an appeal from the U.S. District Court for the Eastern District of Tennessee at Chattanooga, D.C. No. 02-00372, Judge Allan Edgar presiding. Judge Moore wrote the opinion of the Court of Appeals, in which Judges Siler and Cole joined.

5th Circuit Rules in Lanham Act Case Involving Erroneous Phone Directory Entries

2/24. The U.S. Court of Appeals (5thCir) issued its opinion [10 pages in PDF] in Dial One of the Mid-South v. BellSouth, a Lanham Act case regarding erroneous address listings in a telephone company's directories. At issue are what claims are capped by limitations in BellSouth's state tariff filings, and which claims are not capped, due to federal preemption by the Lanham Act.

Dial One of the Mid-South (Dial One) is a franchisee of Dial One of Indiana. Bell South publishes and distributes telephone directories. These directories have frequently contained erroneous listings for Dial One. In the present action, Dial One filed a complaint in U.S. District Court (EDLa) against BellSouth, and its publishing subsidiary, alleging federal and state trademark infringement, unfair competition, and violations of Louisiana Civil Code Article 2315 for the intentional publication of false information.

The District Court awarded Dial One $31,500 in damages for violation of the federal trademark statute with respect to the certain errors, and an additional $3000 in damages for six other BellSouth errors, which are tariff capped at $500 each.

The Court of Appeals largely affirmed the District Court.

This case is Dial One of the Mid-South, Inc. v. BellSouth Telecommunications, Inc., et al., App. Ct. No. 03-31132, an appeal from the U.S. District Court for the Eastern District of Louisiana.

DHS Appoints Data Privacy and Integrity Advisory Committee

2/24. The Department of Homeland Security (DHS) announced the appointment of twenty people to its Data Privacy and Integrity Advisory Committee.

The members, in alphabetical order, are Joseph Alhadeff (Chief Privacy Officer of Oracle, a database software maker), Ramon Barquin (President of Barquin International, a data management company), Howard Beales (George Washington University, and former Director of the Federal Trade Commission's Bureau of Consumer Protection), Reed Freeman (CPO of Claria Corporation), James Harper (Editor of Privacilla.org and Director of Information Policy Studies at the Cato Institute), Kirk Herath (CPO of Nationwide, an insurance and financial services company), David Hoffman (Director of Privacy at Intel), Lance Hoffman (George Washington University, School of Engineering and Applied Science), Tara Lemmey (CEO of Lens Ventures), Joseph Leo (VP of SAIC), John Marsh (George Mason University School of Law), Joanne McNabb (California Department of Consumer Affairs), Charles Palmer (IBM), Richard Purcell (Corporate Privacy Group), Paul Rosenzweig (Heritage Foundation), John Sabo (Computer Associates), James Sheehan (Milton Hershey School), Lisa Sotto (law firm of Hunton & Williams), Michael Turner (Information Policy Institute), Samuel Wright (Cendant Corporation).

In addition, the DHS announced that Nuala Kelly, the Chief Privacy Officer of the DHS, will be the sponsor of this advisory committee, and Rebecca Richards, the Director of Privacy Compliance in the DHS Privacy Office, will be the Executive Director of this advisory committee.

The advisory committee will hold its first meeting on April 6, 2005 in Washington DC.

People and Appointments

2/24. Joseph Hall was named Managing Executive for Policy at the Securities and Exchange Commission (SEC). Before going to work at the SEC in 2003, he was a partner in the law firm of Davis Polk & Wardwell in New York City, New York. See, SEC release.

2/24. Martha Peterson was named Counselor to the Chairman at the Securities and Exchange Commission (SEC). See, SEC release.

More News

2/24. The U.S. Court of Appeals (2ndCir) issued its opinion [PDF] in Cubatabaco v. Culbro, a trademark infringement case brought under Section 43(a) of the Lanham Act. The U.S. District Court (SDNY) held that Empresa Cubana del Tabaco (Cubatabaco), a Cuban company, owned the U.S. trademark COHIBA for use on cigars under the famous marks doctrine. The Court of Appeals reversed. It wrote that "even were the famous marks doctrine to be recognized -- an issue we do not decide here -- Cubatabaco is barred by the United States’ embargo in force against Cuba from acquiring property rights in United States trademarks via the famous marks doctrine". This case is Empresa Cubana del Tabaco v. Culbro Corporation, et al., App. Ct. Nos. 04-2527-cv (L) and 04-3005-cv (XAP), appeals from the U.S. District Court for the Southern District of New York.

2/24. The Federal Trade Commission (FTC) announced that the FTC and Spain's Agencia Española de Protección de Datos (AEPD) signed a Memorandum of Understanding (MOU) [9 pages in PDF] regarding spam. The MOU states that the two countries "recognize that it is in their common interest to share Evidence that will: facilitate effective enforcement against Spam Violations; facilitate research and user and business education on spam; promote a better understanding by each Participant of economic and legal conditions and theories relevant to enforcement against Spam Violations and related activities; and keep each other informed of developments in their respective countries having a bearing on this Memorandum.". See also, FTC release.

FCC Orders AT&T to Pay Access Charges and USF Payments on Some Calling Cards

2/23. The Federal Communications Commission (FCC) released an Order and Notice of Proposed Rulemaking [30 pages in PDF] pertaining to universal service fund (USF) payments, access charges, and prepaid calling cards. It orders AT&T to make USF payments and pay access charges on certain prepaid calling cards. It defers decision on related issues by initiating a rulemaking proceeding. AT&T said that it will seek judicial review. See also, FCC release [PDF]. See, full story.

10th Circuit Rules in Qwest II

2/23. The U.S. Court of Appeals (10thCir) issued its opinion in Qwest v. FCC, a case regarding the Federal Communications Commission's (FCC) mechanism for providing universal service support subsidies to non-rural telecommunications carriers under 47 U.S.C. § 254.

Petitioners filed petitions for review of the FCC's order on remand, which followed the Court of Appeals' July 31, 2001 opinion in Qwest v. FCC, reported at 258 F.3d 1191, which vacated the FCC's previous order.

In the present opinion, the Court of Appeals wrote that "In the Order on Remand the Commission sought to address the issues we identified in our previous decision. Today, we grant in part and deny in part the petitions for review.  We hold that the FCC relied on an erroneous, or incomplete, construction of 47 U.S.C. § 254 in defining statutory terms and crafting the funding mechanism for non-rural, high-cost support. That construction of the statute is fatal to the cost support mechanism at issue in this case. However, we affirm that portion of the Order on Remand creating a mechanism to induce state action to assist in implementing the goals of universal service."

This case is Qwest Communications, Inc. v. FCC and USA, et al., U.S. Court of Appeals for the 10th Circuit, App. Ct. Nos. 03-9617, 04-9518, and 04-9519, petitions for review of a final order of the FCC.

People and Appointments

2/23. President Bush announced his intent to designate Harvey Rosen to be Chairman of the Council of Economic Advisers (CEA). Rosen is already a Member of the CEA. Before that, he was a professor of economics at Princeton University. See, White House release.

2/23. President Bush announced his intent to name 25 people to the Advisory Committee for Trade Policy and Negotiations. The 25, in alphabetical order, are James Berges (President of Emerson Electric Co.), JoAnn Brouillette (President of Demeter LP, an Indiana agribusiness), Thomas Donohue (P/CEO of the U.S. Chamber of Commerce), former Rep. Calvin Dooley (D-CA), former Rep. Jennifer Dunn (R-WA), Edward Emma (Jockey International, Inc.), John Engler (President of the National Association of Manufacturers), former Rep. William Frenzel (R-MN), Allen Gant, Jr. (P/CEO of Glen Raven, Inc., and Chairman of the National Council of Textile Organizations), Nicholas Giordano (Affinity Group), Terry Growcock (Ch/CEO of Manitowoc Company), Herbert Fisk Johnson, former Rep. Scott Klug (R-WI), Charles Kruse (President of the Missouri Farm Bureau Federation), Larry Liebenow (P/CEO of Quaker Fabric Corp. and former Chairman of the U.S. Chamber of Commerce), Tracy Mullin Moroney, James Winston Morrison (Small Business Exporters Association), Edward Joseph Perkins, Kevin Rollins (CEO of Dell), Lea N. Soupata (UPS), Jose Antonio Villamil (Spanish Broadcasting System), Joseph P. Ward, Wythe Willis Willey (cattle industry), and Wendell L. Willkie, II.

More News

2/23. The U.S. Court of Appeals (8thCir) issued its opinion [18 pages in PDF] in Kemp v. Bumble Bee Seafoods, a dispute between food businesses involving the trademark issues of likelihood of confusion and dilution. The Appeals Court reversed the judgment of the District Court. This case is Louis E. Kemp, et al. v. Bumble Bee Seafoods, Inc., U.S. Court of Appeals for the 8th Circuit, App. Ct. No. 02-3797, an appeal from the U.S. District Court for the District of Minnesota.

2/23. Securities and Exchange Commission (SEC) Commissioner Paul Atkins gave a speech in Atlanta, Georgia, to the Atlanta Chapter of the National Association of Corporate Directors, in which he addressed the Sarbanes Oxley Act, SEC regulations, and the stifling of investment and innovation by securities regulation. He said that "I do have concerns about the Act and what we have done to implement it. Underlying all my other concerns is a basic philosophical one, namely that we must not allow the American economy to be unduly encumbered by a web of regulations that stifles investment, innovation, and entrepreneurship." He added that "Although Sarbanes-Oxley has federalized corporate governance issues to some extent, we must continue to acknowledge that a variety of approaches to corporate governance is acceptable and indeed desirable. Flexibility encourages innovation."

People and Appointments

2/22. David Freeland was named Chief Information Office of the U.S. Patent and Trademark Office (USPTO). See, release.

2/22. President Bush announced his intent to nominate John Dugan to be Comptroller of the Currency at the Department of the Treasury for a five year term. He is a partner at the law firm of Covington & Burling who focuses on financial institutions regulation, including privacy issues.. He was Assistant Secretary for Domestic Finance during the administration of the elder President Bush. He was also Republican General Counsel to the Senate Banking Committee. See, White House release.

2/22. Amy Levine was named Legislative Council to Rep. Rick Boucher (D-VA), a senior member of the House Commerce Committee, and its Subcommittee on Telecommunications and the Internet, and the House Judiciary Committee, and its Subcommittee on Courts, the Internet and Intellectual Property. She previously worked for the law firm of Covington & Burling.

2/22. Laura Zuckerman joined the Cellular Telecommunications and Internet Association (CTIA) as Director of Government Affairs. She previously worked as Communications Director and Legislative Assistant to Rep. Steve Buyer (R-IN), who is a member of the House Commerce Committee. See, CTIA release.

More News

2/22. The Supreme Court returned from a long recess. It issued two opinions and a long order list [36 pages in PDF]. However, it decided nothing in any major technology related case.

2/22. A publication in France named Le Figaro published articles regarding complaints expressed by Jean-Noel Jeanneney, President of the Bibliothèque Nationale de France (BNF), about Google's plans to put books in the public domain online. The gist of the French worry is that Google's "gigantesque bibliothèque virtuelle" will be "massivement anglophone". On December 14, 2004, Google announced that it "is working with the libraries of Harvard, Stanford, the University of Michigan, and the University of Oxford as well as The New York Public Library to digitally scan books from their collections so that users worldwide can search them in Google." See, Google release.

2/22. President Bush and others held a news conference in Brussels, Belgium on Tuesday, February 22, 2005, at which they discussed, among other topics, trade. Jose Manuel Barrosa, President of the EC, stated that "The United States and Europe are the two largest economies in the world. We are determined to deepen the transatlantic economic partnership. Trade and investment are the bedrock of transatlantic relations. We want to build on this. Our common objective must be to remove obstacles to transatlantic trade and investment, as well as making a success of Doha development round, which is a catalyst for global growth. Europe is committed to promote growth and jobs, through knowledge, innovation and opportunity. That is what the Lisbon agenda stands for." See, transcript [4 pages in PDF].

2/22. The U.S. Court of Appeals (11thCir) issued its opinion [7 pages in PDF] in BellSouth v. Georgia PSC, a dispute involving interconnection agreements, rate setting by the Georgia Public Services Commission (PSC), 47 U.S.C. § 252, and the Federal Communications Commission's (FCC) triennial review order. The District Court reversed a rate setting order of the Georgia PSC. The Court of Appeals affirmed the District Court on all issues. This case is BellSouth Telecommunications, Inc. v. Georgia Public Services Commission, et al., U.S. Court of Appeals for the 11th Circuit, App. Ct. No. 04-12310, an appeal from the U.S. District Court for the Northern District of Georgia, D.C. No. 03-03222-CV-CC-1.

WTO Panel Concludes US DRAM Countervailing Duties Order Violates SCM

2/21. A dispute settlement panel of the World Trade Organization (WTO) issued its report [121 pages in PDF] regarding its investigation of U.S. countervailing duties on dynamic random access memory (DRAM) semiconductors made in Korea. It finds that the U.S. is in violation of the Agreement on Subsidies and Countervailing Measures (SCM).

The panel concluded that the U.S. Department of Commerce's (DOC) "Final Subsidy Determination", and the U.S. International Trade Commission's (ITC) "Final Injury Determination, and the Final Countervailing Duty Order based thereon, are inconsistent with Articles 1, 2 and 15.5 of the SCM Agreement. We therefore conclude that the US is in violation of those provisions of the SCM Agreement." (Emphases in original.)

The panel also wrote that "We note that Korea requests the Panel to recommend that the US terminate the countervailing duty order immediately. Any such recommendation is precluded by Article 19.1 of the DSU, which restricts us to recommending that the US bring the relevant measures into conformity with the relevant agreement. Accordingly, in light of the conclusions above, we recommend that the US bring the DOC’s Final Subsidy Determination, the ITC’s Final Injury Determination, and the DOC’s final countervailing duty order, into conformity with the SCM Agreement." (Emphases in original. Footnote omitted.)

Micron Technology, Inc. is a company based in Boise, Idaho that makes semiconductors, including DRAMs. It complained to various U.S. executive branch agencies, including the DOC and the USITC, and the Congress, regarding DRAM related subsidies made by the Korean government.

The DOC and USITC took the actions referenced in the WTO report. This is USITC Investigation No. 701-TA-431.

Then, Korea filed a complaint with the WTO. In WTO terminology, it "requested consultations". Korea alleged that the DOC and USITC actions violated U.S. obligations under the SCM Agreement and the GATT 1994.

ChoicePoint Describes Its Sale of Data to Identity Thieves

2/21. ChoicePoint issued a statement regarding its sale of individuals' personal data to identity thieves. It wrote that "a small number of very organized criminals posing as legitimate companies gained access to personal information about consumers", and that this was "a fraud committed against us".

ChoicePoint stated that "This incident was not a breach of ChoicePoint’s network or a ``hacking´´ incident."

ChoicePoint explained that "In October 2004, we detected possible signs of fraudulent activities in several small business accounts based in the Los Angeles area. We alerted the Los Angeles County Sheriff’s Department and they subsequently confirmed our suspicions and began an investigation. In November, we received a letter from the lead criminal investigator asking us to delay consumer notification until January 2005 as he was concerned that earlier disclosure could compromise the investigation."

ChoicePoint continued that "These criminals were able to pass our customer authentication due diligence processes by using stolen identities to create and produce the documents needed to appear legitimate. As small business customers of ChoicePoint, these fraudsters accessed products that contained basic telephone directory-type data (name and address information) as well as a combination of Social Security numbers and/or driver’s license numbers and, at times, abbreviated credit reports. They were also able to obtain other public record information including, but not limited to bankruptcies, liens, and judgments; professional licenses; and real property data."

ChoicePoint also estimated that it released information to identity thieves on 144,778 individuals.

On February 18, 2005, the Electronic Privacy Information Center (EPIC), a Washington DC based group, wrote a letter to ChoicePoint, with copies for the Federal Trade Commission (FTC), the House Commerce Committee, and the Senate Commerce Committee.

The EPIC stated that "we are writing to urge you to make available to the 145,000 people the information that was sold by your company last fall to the crime ring. It is not only a matter of fairness, but also a critical public safety concern that these individuals have in their possession the same information about them that you gave to criminals."

It continued that "Choicepoint should send letters to all people affected and allow them to obtain copies of their files and find out all of the info Choicepoint has about them. Choicepoint should allow every person to have access to all records and data that you maintain about them and to receive all reports for free by making just one request."

The EPIC also stated that "your recent security breach demonstrates the profound importance of having the Choicepoint AutoTrackXP and Customer Identification Programs databases regulated by the Fair Credit Reporting Act" (FCRA).

The EPIC and ChoicePoint have exchanged frank and spirited correspondence in the past on ChoicePoint's databases, and merits of extending FCRA regulation. See for example, story titled "EPIC Seeks Congressional Hearing and FTC Workshop on Data Products and FCRA" in TLJ Daily E-Mail Alert No. 1,052, January 10, 2005, and "EPIC Urges FTC to Open Investigation on Data Products and FCRA" in TLJ Daily E-Mail Alert No. 1,042, December 22, 2004.

This EPIC letter was signed by Marc Rotenberg (EPIC's President), Chris Hoofnagle (EPIC Senior Counsel), and Dan Solove (EPIC Advisory Board member).

Solove is also professor at the George Washington University Law Center, and the author of the recently published book titled The Digital Person: Technology And Privacy In The Information Age [Amazon]. Derek Smith, ChoicePoint's Chairman and CEO, also recently published a book, titled Risk Revolution: Real Threat Facing America & the Promise of Technology for a Safer Tomorrow [Amazon].

Go to News from February 16-20, 2005.