Weekly review | Regulation overview

IN NEWS

• The U.S. House of Representatives voted 279-136 to approve the 21st Century Financial Innovation and Technology Act, a bill that would create criteria for classifying digital assets, determine which federal agencies will regulate different assets and create a digital asset registry. The bill will now go to the Senate. President Biden did not threaten to veto the bill if it passed the Senate, but he made it clear that he opposed it.
• The new rules adopted by the U.S. Federal Trade Commission on February 15, 2023, took effect on Tuesday. The new rule, commonly known as the T+1 rule, reduces the number of days required to settle securities transactions from two days to one. Trade settlement occurs when the buyer receives security and the seller receives payment. Regulators hope a faster settlement process will reduce risk and improve efficiency. This rule came in response to the GameStop “herd meme” frenzy of 2021. U.S. Securities and Exchange Commission Chairman Gary Gensler said the change would make U.S. financial markets more resilient.
• The U.S. Environmental Protection Agency (EPA) has issued a final rule amending the existing drinking water safety data reporting regulation to increase the transparency and accuracy of these reports. This rule requires states, territories, and tribes with primary enforcement responsibilities for drinking water safety to report monitoring data to EPA. With this data, EPA can make more informed public health decisions. EPA expects that the revised regulations will help inform citizens about the quality of their water and increase the availability of information. The rule is also intended to enhance EPA’s ability to meet the requirements of the Safe Drinking Water Act.
• The U.S. Fish and Wildlife Service (FWS) has issued a final rule designating habitat in Oregon and California for the coastal marten, an endangered mammal species, as “critical” under the Endangered Species Act of 1973. Critical habitat includes the territory occupied by the species and specified areas in addition, a territory with features important for the protection of the species. The rule designates more than one million acres of land in Siuslaw National Forest, Siltcoos National Forest, Coos Bay, Cape Blanco and the Klamath Mountains as critical habitat for the coastal marten.
• The Department of Housing and Urban Development (HUD) has proposed changing the rules governing the HOME Investment Partnerships Program, which awards grants to state and local governments to help people find affordable housing and offers rental assistance to low-income households. The proposed changes to the regulations are intended to streamline and modernize the program, increase the flexibility of its requirements and encourage investment in the most vulnerable communities. Proposed changes include those that would strengthen protections for tenants receiving rental assistance under the program, as well as easing requirements for nonprofits to qualify as “social housing development organizations” and receive matching funding under the program.
• The U.S. Environmental Protection Agency (EPA) has proposed a new regulatory framework that would require states to identify and evaluate restructuring alternatives for public water systems that have repeatedly violated drinking water regulations. The rule would require state regulators to develop plans to evaluate water systems and implement strategies to improve water services, which could include consolidating multiple suppliers or transferring ownership of a failing system. These state plans would be subject to EPA oversight.
• The Federal Communications Commission has proposed a rule that would require wireless carriers to implement georouting for calls made to the 988 Suicide & Crisis Lifeline. Currently, many calls to 988 Lifeline are routed to regional crisis centers based on the caller’s telephone area code. Instead, the rule would require system operators to route calls based on the geographic locations they originate from. Caller geolocation is already available for 911 calls, and if expanded to 988 calls, it would allow crisis counselors to “provide callers with support tailored to their needs.” The proposal reflects the use of the 988 emergency line, with approximately 80 percent of calls being made from mobile devices.
• The U.S. Coast Guard has issued a final regulation implementing a new operating schedule and safety requirements for all movable bridges on the Cuyahoga River, a major commercial waterway in the Great Lakes. The regulation, which responds to complaints from ship operators about unclear sailing schedules and long waiting times, includes requirements regarding a “countdown clock, (…) display of a telephone number, mandatory use of a VHF-FM marine radio by the bidder and mandatory signage.” ” These communications requirements are intended to provide mariners with the ability to more effectively navigate bridge openings and increase the ability of emergency services to reach emergencies.

WHAT WE ARE READING THIS WEEK

• In a recent essay published in the journal ” Yale Journal on RegulationAlan Z. Rozenshtein, a professor at the University of Minnesota, argued that Art. 230 – a law that protects online platforms from liability for third-party content – ​​is “deeply ambiguous” due to a “series of errors” made by Congress in writing the law and the courts in interpreting it. Rozenshtein proposed that courts instead narrowly interpret immunity under Art. 230, which would prompt big tech companies to pressure Congress to clarify the scope of immunity for online platforms. Rozenshtein acknowledged, however, that significant disruptions could occur online in the period between the court’s narrow reinterpretation of Section 230 and Congress’s subsequent response.
• In a recent Brookings Institution article, Benjamin Cedric Larsen of the World Economic Forum and Sabrina Küspert of the European Office of Artificial Intelligence compared the efforts of the EU and the US to regulate general-purpose artificial intelligence (AI). The EU adopted an Artificial Intelligence Act in 2024, which focuses on regulating general-purpose AI and ensuring transparency between AI providers. In the United States, President Joseph Biden issued an “Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence” in 2023, which proposed a licensing structure that includes independent oversight of companies’ use of general-purpose AI models in high-risk situations . Larsen and Küspertk argue that the key difference between regulations imposed by the EU and the US are the mandatory elements in the former and the voluntary nature of the latter.
• In a recent essay published in the journal ” Northwestern University Law ReviewChristopher S. Yoo, the John H. Chestnut Professor of Law at the University of Pennsylvania, argued that courts and legislatures should avoid classifying social media as common carriers for telecommunications services. Calls to regulate social media are coming from both ends of the political spectrum, and cases involving differing views on common carrier classifications have been affirmed by the Supreme Court. Proponents argue that classifying social media as common carriers would make restrictions on their right to exclude users more constitutionally permissible under the First Amendment. Yoo argues that social media cannot be considered a common carrier under either the statutory or common law definitions of common carriers. Even if social media could qualify as a common carrier under either of these definitions, Yoo explains that such a reclassification would have no impact on the case-by-case analysis required by the First Amendment to justify social media restrictions.

EDITORS’ CHOICE

• In the essay in Regulation overviewHerbert Hovenkamp, ​​James G. Dinan University Professor at the Wharton School of the University of Pennsylvania, argued that courts should re-evaluate their approach to remedies for antitrust violations to focus on remedies that focus on consumer welfare principles, and not on police powers serving as limits on the power and size of enterprises. Hovenkamp explained that previous antitrust cases end in failure at the problem-solving stage due to unclear guidelines of antitrust regulations. Hovenkamp discussed that effective remedies should aim to increase competition and consumer welfare, with options including injunctions, interoperability requirements and governing boards overseeing decision-making processes, rather than splitting up entities, which can lead to inefficiencies and loss of benefits for consumers.