Newsletter of the Internet Law Center

1. 6/22/2018 Mail - bennetkelley@outlook.com
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Cyber Report - Online Sales Tax and Dangerous Cal Email Bill
June 22, 2018
Read Online Version
TOP STORIES
Supreme Court Approves Online Sales Tax and
Dangerous Email Bill Advances in California
Also included are (i) Landmark California Supreme Court Decision Establishes New Test for
Employees v. Independent Contractors; (ii) Will Europe Break the Internet; (iii) Net Neutrality is
Dead, Sort of; (iv) New FTC to Reexamine Big Tech; (v) 50 State Data Breach Rules and
LabMD; (vi) CLBR Update - ADA Compliance and Toxic Twitter; and (vii) Happy Bring Your Dog
to Work Day.
TOP STORIES
Supreme Court Approves Online Sales Tax and
Dangerous Email Bill Advances in California
Supreme Court Decision Authorizes Online
Sales Taxes
In South Dako ta v Wayfair, Inc., a divided Supreme
Court has reversed a 1992 ruling that limited states
from collecting sales taxes to only those businesses
with an in-state physical presence. The Court,
instead, adopted a more flexible nexus standard of
whether the merchant had availed itself of the
“‘substantial privilege of carrying on business’ in that
jurisdiction.” While states are now free to assess
online sales taxes for merchants having a substantial
nexus, most state legislature have already adjourned for the year. As a result, the impact of this
ruling may not be felt until 2019. (Read More)
Dangerous California Email Bill Advances
Bennet Kelley <bkelley@internetlawcenter.net>
Fri 6/22/2018 7:29 AM
To:bennetkelley@gmail.com <bennetkelley@gmail.com>;

2. 6/22/2018 Mail - bennetkelley@outlook.com
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Legislative being pushed by Plaintiff's lawyer Dan
Balsam is seeking to rewrite and greatly expand
California's existing commercial email law to impose
liability on legitimate email operations. AB 2546,
introduced by Assemblyman Ed Chau, narrowly
passed the Assembly on May 31st.
On Monday, the Internet Law Center testified at a
Senate Business, Professions and Economic
Development hearing on the bill (pictured above), arguing that it would lead to job losses among
e-commerce companies that rely on email. The Committee forced Assemblyman Chau to scale
back the bill, but even the amended version contains job-killing provisions.
The bill will next be heard before on Tuesday before the Senate Judiciary Committee. Click here
for more information about the bill and how to oppose it.
Landmark Cal Supreme Court Decision Establishes New
Test for Employees v. Independent Contractors
In April, the California Supreme Court issued a unanimous decision
designed to stop the misclassification of employees as independent
contractors. The unanimous decision is certain to have a huge impact in
the tech sector where startups too often rely on the independent
contractor classification to cut costs and in the sharing economy which
relies heavily on the status of their workers as independent contractors.
The court embraced the “ABC test” applied in many states that a worker can be properly
considered an independent contractor only if the hiring entity establishes:
(A) that the worker is free from the control and direction of the hirer in connection
with the performance of the work, both under the contract for the performance of
such work and in fact;
(B) that the worker performs work that is outside the usual course of the hiring
entity’s business; and
(C) that the worker is customarily engaged in an independently established
trade, occupation, or business of the same nature as the work performed for the
hiring entity.
Cyber Report Named a Finalist for LA Press Club Awards for the 9th Time
In May, the Los Angeles Press Club announced the finalists for the 60th Southern California
Journalism Awards and once again our Cyber Report newsletter has been named as a
finalist. Cyber Report was named for its July 2017 newsletter Cyber Attacks Inflict Billions in
Damages, It is the 9th time Cyber Report has been nominated in the category of in-house
publication. Cyber Report won First Prize in 2011, Second Prize in 2012 and 2009; and 3rd
Prize in 2015.
Winners will be announced at a June 24, 2018 gala that will honor NBC’s Lester Holt and jailed
Saudi blogger Raif Badawi.
Will Europe Break the Internet?

3. 6/22/2018 Mail - bennetkelley@outlook.com
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Within hours of the European Commission’s new
General Data Protection Regulation (GDPR) going
into force on May 25th, a new non-profit – the
European Center for Digital Rights (aka “noyb” for
none of your business) – filed actions Facebook,
Google, Instagram and WhatsApp seeking between
1.3 to 3.7 billion euros in penalties.
But GDPR is no longer the top internet story coming
from the EC. Earlier this month, a committee of the
European Parliament passed a measure calling for
the termination of the US-EC Privacy Shield unless
the US demonstrates compliance by September 1st. The Privacy Shield acts as a mechanism to
allow the sharing of EU citizens’ personal data with US companies.
This week, another European Parliament committee voted to approve a sweeping change to
European copyright law that includes a provision that may require organizations like Facebook
and Twitter to pay a license fee for links to content shared on their platform. In addition, the
proposal requires that "information society service providers" take measures to prevent the
availability of infringing content. It is feared that the requirement will force platforms to use
automatic filtering technologies that would be unable to detect fair comment, satire, criticism and
parody (including memes like the one above).
An open letter signed by 70 of the leading pioneers of the internet, including the creator of the
world wide web, Tim Berners-Lee and the Wikipedia founder, Jimmy Wales, argued that the bill
would take “an unprecedented step towards the transformation of the internet from an open
platform for sharing and innovation, into a tool for the automated surveillance and control of its
users”. The UN’s special rapporteur on freedom of expression, David Kaye, warned that the
proposal would lead to “prepublication censorship”. (Read More)
The full European Parliament is expected to vote on the privacy shield and copyright proposals
in July.
Net Neutrality is Dead, Sort Of
From 2003 to June 10, 2018, Federal
Communications Commission (FCC) policy
supported Net Neutrality principals - with Democratic
and Republican FCC members disagreeing on
enforcement. On June 11th, FCC Chairman Ajit Pai's
"Restoring Internet Freedom" Order, which actually
permits paid prioritization and throttling if disclosed,
took effect.
Net Neutrality is not entirely dead yet. The Senate
did vote to reverse the "Restoring Internet Freedom Order," giving the House until the end of this
session to pass the resolution which would still require President Trump's signature.
A number of states have also taken measures to preserve net neutrality. Washington state has
adopted its own net neutrality proposal while six states have adopted rules prohibiting states
from contracting with broadband providers that do not adhere to net neutrality principles.
New FTC to Reexamine Big Tech
Now that the Federal Trade Commission has a full
slate of Commissioners for the first time since 2016, its
new Chairman Joe Simons announced the launch of a
series of hearings beginning in September to examine
whether broad-based changes in the economy,
evolving business practices, new technologies, or
international developments might require adjustments
to competition and consumer protection law,
enforcement priorities, and policy. Simons explained
that "every so often there’s some very disruptive thing
that happens in the economy, and we want to take a look and see what does that mean for
antitrust enforcement."

4. 6/22/2018 Mail - bennetkelley@outlook.com
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Among the topics being addressed include (i) competition and consumer protection issues in
communication, information, and media technology networks; (ii) market power and entry
barriers, and the evaluation of collusive, exclusionary, or predatory conduct in markets featuring
“platform” businesses; (iii) the intersection between privacy, big data, and competition; and (iv)
the role of intellectual property and competition policy in promoting innovation.
50 State Data Breach Rules and LabMD decision
In March Alabama became the 50th state to enact data breach notification rules (see NCSL list
of state of data breach laws). Given this fact, it is important for companies to develop a data
breach plan of action before the breach occurs. The FTC blog has some helpful tips for
developing such a plan.
The FTC's ability to remedy data breaches, however, suffered a setback in the 11th Circuit where
the court overturned the FTC's order since it mandated "a complete overhaul of LabMD’s data-
security program and says precious little about how this is to be accomplished." There are
concerns this ruling may limit FTC enforcement.
CLBR Update - ADA Compliance and Toxic
Twitter
Is your website compliant with the American with
Disabilities Act? Last year alone, there were over
800 federal lawsuits over website accessibility. We
tackled this issue last week on Cyber Law and
Business Report.
Next Wednesday, we talk with Amnesty International
about their landmark report on its 16-month
investigation of abuse of women on Twitter entitled
“Toxic Twitter - A Toxic Place for Women,” which charges that Twitter’s failure to safeguard
women on its platform is a human rights violation. Listen live at 10AM Pacific on
WebmasterRadio.fm. Shows are also available via podcast channels iTunes, Podbay,
Spreaker and Stitcher.
CLBR has now passed the 300 show milestone and other recent shows of note include the
fallout from the Facebook scandal, addressing the status of ICANN's WhoIs Registry under
GDPR, the downside of the sharing (platform) economy, an interview with UCLA Law Professor
Adam Winkler on his new book, "We The Corporations," and my interview with former Bobby
Kennedy aide Peter Edelman on the 50th anniversary of RFK's presidential campaign and
assassination.
Happy Bring Your Dog to Work Day
Gidget and I are happy to celebrate Bring Your Dog to Work Day.

5. 6/22/2018 Mail - bennetkelley@outlook.com
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ABOUT THE INTERNET LAW CENTER
& CYBER REPORT
The Internet Law Center is a law firm dedicated to helping
businesses navigate the evolving legal standards for today's
digital economy. Today the firm serves a diverse client base
that includes startups and public companies both online and
offline across four continents on issues ranging from online
marketing, e-commerce, privacy, domain names to cyber
harassment, as well as entertainment, general transactional and
litigation matters.
The Internet Law Center was founded by Bennet Kelley, who
has been named as among the nation's top internet lawyers by
several publications including the Los Angeles Business Journal which named him
one of the Most Influential Lawyers in Digital Media and E-Commerce. We are actively
licensed in California and Washington, D.C.
Cyber Report is the award-winning newsletter of the Internet Law Center. It is for
information purposes only and is not meant to express any legal opinion or advice (not
even if read backward). No attorney-client or preacher-penitent relationship has been or
will be formed by any communication in connection with this newsletter. The
occasionally snarky views expressed herein do not necessarily reflect the views of the
firm nor any ILC client.
100 Wilshire Blvd, Suite 700, Santa Monica, CA 90401
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Bennet Kelley
Internet Law Center
Internet Law Center 100 Wilshire Blvd Suite 700
Santa Monica, CA 90401
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