An 18-month congressional investigation turned up evidence that Apple is a major-league tax avoider, the New York Times reports — one that allegedly sheltered billions of dollars from taxation by moving the money through a web of subsidiaries, some of which had no employees and claimed to be exempt from taxes. Apple CEO Tim Cook will testify before the Senate Permanent Subcommittee on Investigations tomorrow; Apple has released an advance copy of his testimony.

The Senate will be taking on much-needed digital rights legislation in the new 113th Congress, including requiring law enforcement to have warrants before poking around online communications.

In a speech at Georgetown University Wednesday, Senate Judiciary Committee Chairman Patrick Leahy (D-Vt). stressed the need for defending civil liberties, protecting privacy, improving transparency and making a push to require a warrant before law enforcement has carte blanche to read people's emails, social media messages and other modes of online communication.

We're Trusting These Guys?

Congress has been questioned of late for implementing some eyebrow-raising initiatives that have thrown the Fourth Amendment under the bus and seemingly worked towards the opposite of Leahy's plans (think FISA, the Video Privacy Protection Act, and half a dozen other problematic regulations).  But if Leahy has his way, this new Congress could create legislation to help both consumers and creators protect their data. Leahy, who voted against FISA and was the chief proponent of last year's U.S. patent law reform, may be the right man to push these bills along.

In his speech, Leahy expressed concern over the potential loss of privacy that comes with the expanding use of drones in civilian life. The Federal Aviation Administration predicts that by the end of the decade, 30,000 commercial and government drones could be flying over U.S. skies. With that outcome literally on the horizon, Leahy plans on making drones the subject of Congressional hearings, indicating that legislators need to focus to make sure that technology will not be used to erode peoples’ privacy.

"I am concerned about the growing use of drones by Federal and local authorities to spy on Americans here at home," he said Wednesday. "We make a tragic mistake thinking that merely giving up more and more of our privacy will make us safer. It will not. Security and liberty are both essential in a free society, and we cannot forsake one for the other."

Leahy also spoke about insuring transparency, specifically referring to press freedoms. The son of Vermont printers said he has "concerns about the press being shut down." While he's against the release of classified government documents (think WikiLeaks), he says he will work to "make sure that legislative efforts to prevent classified leaks does not infringe upon our fundamental freedoms, including freedom of the press."

It's a pretty tricky balance Leahy is striking here, but this may be a way of saying he doesn't support penalizing journalists who publish formerly privileged documents.

Walling Off Our Data

The last, and perhaps most important, tenet of Leahy's plan was a promise to update outdated cyber security laws, specifically the 27-year-old Electronic Communications Privacy Act (ECPA). Right now the ECPA gives police and government agencies the ability to read people's emails and digital communications - without a warrant.

Leahy, who turns 73 in March, has said the reason he's stayed chairman of the Judiciary Committee is to reform ECPA. He says electronic documents should have the same legal protection as paper documents. It won't be easy to fix this, but he's making it a top priority.

"It is going to be a fight," he said in his speech. "But I think people are realizing they don't have to give up their ability to use the Internet while at the same time guarding their freedom."

What The Speech Didn't Say

However, for all the good will towards modifying these laws, a few major items were missing from Leahy's speech. Another potential change to the ECPA is currently on the table in the Senate, one which would require all text messages to be archived and available to law enforcement. This under-the-radar item is a proposal and yet to be brought to the Congressional floor. Let's hope Leahy can muster enough support to put the kibosh on this proposed legislation.

And let's not forget the thousand pound elephant in the room: Very much missing from the speech was an update on whether Congress will push for new versions of SOPA and PIPA. Leahy himself seems to have one foot in the pool and one out when you look at his record. This is the Senator who wrote PIPA and COICA (Combating Online Infringement and Counterfeits Act). Yet he was also behind a failed FISA amendment reform that would have shortened the law and decreased the enforcement period to three years -- which would have been good. Based on this track record, either he erred and learned from these past mistakes...or we're all buying what he's selling. And it's not worth it. Fingers crossed the truth is the former, not the latter. 

Today, Friday, is Internet Freedom Day. And as the the world celebrates the life of the too-soon-departed Aaron Swartz and the one year anniversary of the Internet blackout victory against SOPA and PIPA, big change looms. Let's hope Leahy has our best interests at heart when it comes to protecting our privacy. 

Image courtesy of Shutterstock.

It passed the House, the Senate, and just before the new year, the President signed it into law. In a significant shift in video privacy - online video rental companies can now share information about the movies you rent or buy. As you might expect, things are about to get more social.

According to the new law, companies have to ask only once. You can opt out, but if you don't, say goodbye to the rights to your video data for two full years. As per the change, Netflix will introduce new social features that basically link users' Netflix and Facebook accounts and share their viewing history with friends. Netflix was previously unable to do this in the U.S. by the 25-year-old Video Privacy Protection Act (VPPA), which banned the sharing of personal data for anything but law enforcement purposes (even now, Hulu remains in court for previously sharing viewers' info). 

On the surface, sharing viewing history may not seem like a big deal, but the law undermines the privacy of Internet users, and takes away user control over significant amounts of potentially sensitive personal data. 

Looking back, it's ironic this new law even passed, as the VPPA was originally enacted in the 1980s in response to a local Washington newspaper publishing a list of Supreme Court nominee Robert Bork's rented videotapes during his nomination process. At that time, Congress was up in arms over this privacy breach, which helped scuttle Bork's appointment and led to the phrase "borked" entering the language. But less than a month after Bork's passing on December 19, 2012, it seems that Netflix investment of roughly half a million dollars in lobbying Congress to update the law was enough to do the trick. 

The Privacy Issue

Almost one year ago to the day, Marc Rotenberg, the executive director and president of the Electronic Privacy Information Center (EPIC), testified in Congress against the bill, citing his organization's interest in "supporting the rights of Internet users to control the disclosure of their data held by private companies."

"The debate over online privacy and Netflix does not exist in a vacuum," Rotenberg stated at the hearing. "It is becoming increasingly clear that only privacy laws actually safeguard the privacy rights of Internet users."

In an interview with ReadWrite, Rotenberg said he urged the Senate Judiciary Committee to update the law with new safeguards. His warnings were not heeded. "Senator Franken (D-Minn.) and Senator Feinstein (D-Calif.) made some improvements to the House bill but it was still a step backward for online privacy," Rotenberg said. 

So...is sharing bad for online privacy? The experts ReadWrite talked to seemed to think so.

Jules Polonetsky, the director and co-chair of the Future of Privacy Forum, said the the real issue is that people don't know they're sharing. When that sharing is done without user consent and system settings are unclear, it's bad for the public. "This is about the sharing of your records of video rental history, as opposed to on a clear, permission basis, enabling people to key-in sharing mode," he said. "Sharing should be in a clear opt-in basis."

Polonetsky compares the risk to what social video sites Viddy and Socialcam did when they first launched, gaming the Facebook system so anyone playing those companies' videos automatically alerted their Facebook friends to what they were watching. That accidental sharing is a major problem, Polonetsky warned.

"I saw a rabbi I know sharing a fairly raunchy video about girls on bikes, falling off bikes... a conservative, corporate lawyer sharing a somewhat offensive video, none of them clearly understanding that by clicking on some filthy link shared by their friends, to see what the attraction was, they'd be letting hundreds of their friends know and sullying their reputation."  

Rainey Reitman, the Electronic Frontier Foundation's activism director agreed. She said the move is bad for the public because unclear sharing undermines the "strong legal protections put in place to protect video watchers... A major concern is that individuals will enable the function and not realize that it is continuing to broadcast their video watching habits to social networks - for years."

Selling Your Video History?

Another potential problem stemming from the law, Reitman said, is whether video companies will use that information as a commodity and sell it. "Once data is combined with our social media profiles, it can be part of the data used by the online advertising industry for advertising purposes and we'll be forced to rely on the often confusing privacy settings on social networks to protect our video watching history."

Polonetsky said that turning on this stream of sharing data on a service like Facebook would likely increase targeted ads. He added that although this change tot he law has been pushed by Netflix, not Facebook, social sharing is a huge business driver, and ultimately a win for that site. 

"Generally [Facebook's] motto has been, we want a lot of data so advertisers can reach you," he said. "Facebook can and will make available what you're doing, what you're watching, what you're reading, to be used to tailor ads to you on Facebook - and increasingly off of Facebook."

Not All Bad?

The new law is not all bad, said Polonetsky. When it comes to sharing information people do want known, like live Television, sports and films while they tweet or post, it can be a boon for both users and entertainment companies. But it's only positive if people have an on-off switch, and awareness of what they're sharing.

"If you can actually draw together the eyes now watching this video, this game, and comment, I think there's a real positive," he said. Still, he warned that the way the new systems get set up will be critical to the law's long term effects. Again, the key is that people have to know the settings in order for the sharing to benefit them and not inadvertently spread information they'd rather keep to themselves. "It's got to be cut in a way that very affirmatively makes clear that you are in sharing mode so there's no cause for accidents. That's UI design."

Polonetsky isn't the only one who sees the glass half full. Privacy expert and attorney Alan Chapell of Chapell & Associates thinks the old VPPA law was out of date. He pointed to the fact that the law treated the video differently from other content, such as music services like Spotify, which are able to share. 

"The VPPA created a rule set that treated movie consumption differently from book and music consumption," he said. "Drawing that type of distinction in a digital world doesn't make sense. If a consumer wants to be able to tell friends, via Facebook or some other platform, which movies he's streamed via Netflix he should be able to do so."

Chapell is right, people should have the right to share when they want to do so. But the underlying issue is that this new law creates a system where the public could easily end up sharing personal data without their informed consent. 

Photo courtesy of Shutterstock.