Hillicon Valley: DOJ opens tech antitrust probe | Facebook, Amazon set lobbying records | Barr attacks encryption as security risk | NSA to create new cybersecurity arm

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Welcome! Follow the cyber team, Olivia Beavers (@olivia_beavers) and Maggie Miller (@magmill95), and the tech team, Harper Neidig (@hneidig) and Emily Birnbaum (@birnbaum_e).

DOJ OPENS TECH ANTITRUST PROBE: The Department of Justice (DOJ) on Tuesday announced it is launching an investigation into whether the country's largest tech companies have stifled competition or harmed consumers, marking the department's widest-ranging inquiry into potential tech antitrust violations yet.

The DOJ's antitrust division is leading the probe, surveying "whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers," the DOJ said in a statement. 

Facebook, Google and Amazon – some of the largest and most powerful tech companies in the world – could all be implicated in the DOJ's probe. 

The department will "consider the widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online," according to the statement.

More here on this developing story.

BARR ATTACKS ENCRYPTION: Attorney General William BarrWilliam Pelham BarrGraham says he will call Papadopoulos to testify Pelosi, Democrats launch Mueller messaging blitz The Hill's Morning Report — Trump applauds two-year budget deal with 0 billion spending hike MORE in lengthy remarks on Tuesday said he believes encryption is allowing "criminals to operate with impunity" in the digital world, reopening a bitter fight between the U.S. government and tech industry over whether law enforcement should be given special access to encrypted messages.

Barr came out strongly against completely encrypted messaging, alleging that it has prevented U.S. law enforcement from tracking down criminals at the helm of drug cartels and even some responsible for murders.

"The [cost of encryption is] ultimately measured in a mounting number of victims -- men, women and children who are the victims of crimes, crimes that could have been prevented if law enforcement had been given lawful access to encrypted evidence," Barr told the crowd at a cybersecurity conference in New York City.

A new round in an old debate: The country's top law enforcement agencies for years have warned that encrypted communications and data could pose national security risks, considering investigators cannot tap into those messages between potential criminals or terrorists even with a court order.

Encryption converts messages and data into code to prevent unauthorized access. Messaging services like WhatsApp and Signal tout end-to-end encryption, a system of communication where only the senders can read the messages.

The tech industry and cyber experts have defended encryption as a necessary privacy measure that offers a method of protecting communications from outside intrusion and hacking. Proponents of encryption have said creating "backdoor" access for law enforcement would undermine the security of messaging systems.

"Making our virtual world more secure should not come at the expense of making us more vulnerable in the real world," Barr said on Tuesday. "But unfortunately, this is where we appear to be headed."

Read more here.

WYDEN PUSHES BACK: Sen. Ron WydenRonald (Ron) Lee WydenBarr warns encryption allows 'criminals to operate with impunity' Grassley, Wyden reach deal to lower drug prices Tech critics on both sides have it wrong: Section 230 is not a special privilege MORE (D-Ore.), a top privacy hawk, said Tuesday he believes the Trump administration would "knowingly" abuse its wide-ranging surveillance powers.

Wyden delivered his remarks on the Senate floor shortly after Attorney General William Barr came out strongly in favor of building a "back door" for law enforcement to access encrypted messages and data, an issue that Wyden has railed against due to cybersecurity and privacy concerns.

"Many times in the past I have warned that unnecessary government surveillance holds the potential to be abused," Wyden said. "But I have never done what I am doing today. Today, I fear -- rather, I expect -- that if we give this attorney general and this president the unprecedented power to break encryption across the board ... they will abuse those powers."

"I don't say that lightly," Wyden added. "And yet, when I look at the record, the public statements and the behavior of William Barr and Donald TrumpDonald John Trump5 things to know about Boris Johnson Conservatives erupt in outrage against budget deal Trump says Omar will help him win Minnesota MORE, it is clear to me that they cannot be trusted with this kind of power.

"Never before have I been so certain that the administration in power would knowingly abuse the massive power of government surveillance," he continued. "It is for that reason that building government backdoors into the encrypted communications of Americans now is uniquely dangerous and must be opposed at all costs."

Read more here.

NOT HAPPY WITH LAST WEEK'S ANSWERS: The House Democrat leading a congressional antitrust investigation into big tech companies has accused Facebook, Amazon and Google of giving deceptive answers to lawmakers at a hearing last week on their market power.

Rep. David CicillineDavid Nicola CicillineBig Tech has big credibility gap Two Democrats vow to press forward on Trump impeachment Democratic lawmaker calls asylum, refugee programs 'crown jewel' of immigration system MORE (D-R.I.), who chairs the House Judiciary subcommittee on antitrust, sent letters to the three companies on Tuesday demanding that they offer more complete testimony.

"I was deeply troubled by the evasive, incomplete, or misleading answers received to basic questions directed to these companies by Members of the Subcommittee," Cicilline said in a statement.

"While it is unclear whether these responses stemmed from their lack of preparation, purposeful evasion, or a failure by these companies to select appropriate witnesses for the hearing, we expect Google, Facebook, and Amazon to take this opportunity to provide responses to these questions raised during the hearing."

The three companies, along with Apple, sent executives to testify before Cicilline's panel last week, where they were grilled about whether their dominance has strangled potential competitors and hurt consumers.

None of the companies immediately responded when asked for comment.

Each letter is accompanied by a list of questions about the companies' respective business practices.

Read more here.

I WONDER WHAT THEY'RE WORRIED ABOUT: Facebook and Amazon both set quarterly records for federal lobbying over the last three months, leading a pack of tech giants that are increasingly under siege in Washington, according to federal disclosure forms filed Monday.

Each company spent a little more than $4 million on lobbying in the second quarter, the first time either firm has spent that much on their influence operations in the capital.

The surge in spending comes as Congress and regulators are scrutinizing tech giants' market power and handling of user data.

"Amazon provides a wide range of products and services for our customers, and we're always looking for ways to innovate on their behalf," an Amazon spokeswoman said in an emailed statement to The Hill. "Our Washington, D.C. team is focused on ensuring we are advocating on issues that are important to our customers, our employees and policymakers."

Facebook declined to comment.

Google, which has also seen its fortunes change in Washington, spent just $2.9 million in the second quarter -- the least it's spent on lobbying since 2011. Google declined to comment.

Read more here.

NSA STEPS UP CYBER MISSION: The National Security Agency (NSA) announced Tuesday that it will form a cybersecurity arm in October to unify its foreign intelligence and cyber defense missions.

The new directorate will be responsible for defending against "threats to National Security Systems and the Defense Industrial Base," the NSA said in announcing the new initiative.

NSA Director Paul Nakasone, who is expected to formally unveil the initiative later Tuesday, said the directorate will allow the agency to "redefine its cyber mission."

"What I'm trying to get to in a space like cyberspace is speed, agility, and unity of effort," Nakasone said in a statement released by the agency.

The directorate will be led by Anne Neuberger, who has previously served as the NSA's first chief risk officer. Neuberger has also worked as the NSA's deputy director of operations and the lead of the "Russia Small Group," the NSA and U.S. Cyber Command task force created last year to thwart Russian cyber interference.

Read more here.

ANOTHER COMPLAINT FOR THE PILE: Leading consumer group Public Citizen on Tuesday asked federal regulators to probe whether Amazon associates misled and deceived customers by failing to disclose they receive money to recommend certain products.

According to the complaint with the Federal Trade Commission (FTC), multiple participants in Amazon's "associates" program -- which allows individuals and businesses to make money for promoting products on Amazon -- published Amazon product recommendations without adequately disclosing their business relationship during the company's annual Prime Day 48-hour sale last week.

"Leading up to and through Amazon Prime Day on July 15-16, Americans' email inboxes were stuffed with recommendations for Amazon Prime Day best buys, their Instagram feed replete with suggestions of what to buy on Amazon, their internet and blog reading lists overflowing with pointers for the best deals," Public Citizen President Robert Weissman wrote in the complaint, addressed to the FTC's consumer protection bureau chiefs.

"Some substantial portion of this publicity and recommendations for Amazon Prime Day were paid endorsements, but in a great number of cases, the endorsement relationship was either not disclosed to consumers or was communicated with inadequate disclosures," the group wrote.

Public Citizen is asking the FTC to look into the issue further and potentially push Amazon to clarify what it expects of its "affiliates."

Amazon's affiliates program allows individuals and businesses to make money in exchange for promoting Amazon products. It's unknown how many Amazon affiliates there are, but estimates have pinned the number in the hundreds of thousands. Participants in the program receive commission for sales of the items they promote.

Read more here.

FACIAL RECOGNITION BILL INCOMING: A group of House lawmakers this week will introduce a bill banning facial recognition technology from public housing, the first federal proposal of its kind.

Reps. Yvette ClarkeYvette Diane ClarkeHere are the 95 Democrats who voted to support impeachment The Hill's Morning Report — Trump retreats on census citizenship question CBC lawmakers rip Justice Democrats for targeting black lawmakers for primaries MORE (D-N.Y.), Ayanna PressleyAyanna PressleyCNN, MSNBC said 'racist' more than 4,100 times from July 14-21 Trump says 'Squad' and Dems have 'Trump Derangement Syndrome' over impeachment 2020 RNC host city Charlotte condemns Trump's 'racist and xenophobic' remarks MORE (D-Mass.) and Rashida TlaibRashida Harbi TlaibCNN, MSNBC said 'racist' more than 4,100 times from July 14-21 Trump says 'Squad' and Dems have 'Trump Derangement Syndrome' over impeachment 2020 RNC host city Charlotte condemns Trump's 'racist and xenophobic' remarks MORE (D-Mich.) are planning to introduce the bill by the end of this week, a source familiar with the legislation told The Hill.

The No Biometric Barriers to Housing Act would prevent facial recognition technology from being installed in housing units that receive funding from the Department of Housing and Urban Development (HUD).

It would also require HUD to submit a report to Congress about how facial recognition technology is "impacting tenants, how it's impacting vulnerable communities, what it means, why housing units are using it, so then they can determine really the best course of action here."

The bill emerges as the House ramps up its scrutiny of the sensitive technology, which scans people's faces for the purposes of identifying them, over the past several months. Lawmakers on both sides of the aisle have pledged they will work up legislation that would limit, or even impose a temporary ban, on facial recognition technology.

Read more here.

AN OP-ED TO CHEW ON: Big Tech has big credibility gap.

A LIGHTER CLICK: The UK's new prime minister.

NOTABLE LINKS FROM AROUND THE WEB:

Your data were 'anonymized'? These scientists can still identify you. (The New York Times)

A new copyright proposal would protect designers online -- but at what cost? (The Verge)

Apple dominates app store search results, thwarting competitors. (The Wall Street Journal)

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