New York State Sen. Michael Gianaris was ecstatic when Amazon named Long Island City in 2018 as the first leader for its new headquarters, a project that will bring 25,000 jobs and $ 2.5 billion in construction costs. in his district of Queens.
But his support quickly faded when he learned that state and city leaders had promised one of the world’s richest companies $ 3 billion in tax cuts in secret negotiations. A public reaction led Amazon to cancel the investment altogether, but for Gianaris the episode still shed light on the massive power of technology companies dominating their industries, overwhelming traditional businesses and using that leverage to further expand their coverage.
Consumer activists, small business owners and state lawmakers in the US are increasingly calling for measures to curb companies such as Amazon, Apple, Facebook and Google that have such an influence over such a long period of their daily lives.
This is normally the responsibility of the federal government. But while the Justice Department and the Federal Trade Commission have filed major antitrust lawsuits against Google and Facebook – both with broad state support – Congress remains stuck when it comes to passing new Big Tech laws.
So dozens of so-called “techlash” bills are being debated in dozens of state houses, where lawmakers from both major parties are proposing new antitrust regulations, consumer privacy, app store fees and digital ad sales taxes. Republican lawmakers also push back against what they claim without evidence that it is an attempt to stifle conservative voices on social networks.
Gianaris, a Democrat, is promoting an important antitrust bill in the New York Legislature. It would set a new legal antitrust standard – “abuse of a dominant position” – and allow collective action lawsuits under state law.
“Our antitrust laws have atrophied and are not equipped to deal with the 21st century and anti-competitive practices,” he said. “The traditional antitrust application doesn’t work because Big Tech has become too big and too strong.”
Technical companies are not content to play defense. Their lobbyists are pushing state lawmakers to oppose the restrictions they consider onerous. In other cases, companies work to write their own more favorable invoices. In many ways, they would also prefer federal law to a package of state laws.
A major concern for two of the largest companies is that the legislation is being considered in several state-owned houses that would limit Apple and Google’s ability to collect large shares of consumer transactions in their app stores.
Critics say the two US smartphone companies are using their position as application gatekeeper to fatten their profits with taxes and undermine rivals competing with their own music, video and other services.
Leading the way are companies like Epic, which owns the popular video game Fortnite, Spotify and Match.com. They want to force Apple and Google to allow them to keep revenue from subscriptions and in-app sales without taking a discount.
In an attempt to avoid potential government reforms, Apple last year reduced the standard 30% commission for app purchases for most developers. Google recently followed suit with discounts coming into effect in July.
State Representative Regina Cobb, a Republican who sponsors Arizona app store legislation, said app makers and their customers are being held hostage.
“It’s a kind of Chicago-style mafia:” You pay us 30 percent or you can’t play. We will take you off our platform; your company is over, ”Cobb said.
Similar legislation is being considered in Georgia, Massachusetts, Minnesota and Wisconsin. North Dakota app store legislation died in February as a result of intense lobbying by both sides. Apple’s chief privacy engineer, Erik Neuenschwander, spoke out against the bill, saying it “threatens to destroy the iPhone as you know it,” calling for changes that would undermine privacy and security.
Movements in three states – California, Nevada and Virginia – to adopt their own comprehensive data privacy laws have encouraged others to follow suit.
In Oklahoma, a bipartisan bill would require companies to obtain prior consent before collecting and selling data to state residents. In Florida, the law would give consumers ownership of the digital information that companies collect through spending, social interactions, news and travel habits.
The Florida bill would require companies to disclose what data they collect, force them to delete it at the consumer’s request, and prohibit them from distributing or selling it when they are told not to do so. They could be sued if they do not comply.
One of its sponsors, Republican State Representative Fiona McFarland, said it was a response to the collection, exchange and sale of ubiquitous personal information.
“It’s everything, from these apps on our phones, to exchanges, to calendars,” she said.
Facebook says it accepts some online privacy laws and provides as much information as possible while writing invoices. The Internet Association, the main trading group in the technology industry representing Amazon, Facebook, Google and dozens of other technology companies, declined to comment.
In California, a bill called the anti-listening law seeks to limit how smart speakers can potentially penetrate private lives. His sponsor, Republican Assemblyman Jordan Cunningham, unplugged a smart device in his bedroom six months ago after it turned on unexpectedly.
“The only thing preventing all these records from being in the hands of the government is a search warrant,” he said. “These things are hacked all the time, so you know, your data can get to Russia.”
His bill would extend existing limits to smart TVs and require companies such as Amazon, which sells Echo smart speakers, to obtain permission before they can record, transcribe or sell information from any conversation.
The disruption of traditional business by companies – and the tax revenues they once provided to governments – have also not gone unnoticed.
Maryland lawmakers this year overturned a veto by Republican Gov. Larry Hogan to create a law that would require digital advertising. The measure, originally approved last year, prompted a number of other states – including Connecticut, Indiana, Massachusetts, Montana and New York – to consider similar legislation.
Proponents say the law seeks to modernize the state’s tax system and force thriving technology companies to pay their fair share. It would estimate the income tax of technology companies made by digital advertising companies in the state, raising about $ 250 million a year for education.
“Companies like Amazon, Facebook and Google have seen their profits rise sharply during the COVID-19 pandemic, as our Main Street business struggles to keep up,” said Maryland Senate President Bill Ferguson, a Democrat who sponsored the measure.
Opponents have challenged the law in federal court and say it violates the Internet Tax Freedom Act, which prohibits states from imposing “multiple and discriminatory taxes on e-commerce.”
The wave of state law follows the growing public awareness of Big Tech power and the ever-expanding influence of companies, said Samir Jain, policy director at the Center for Democracy and Technology in Washington, DC.
“This has led to a growing backlash against technology companies in terms of their power and the way they exercise it,” he said.
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Calvan reported from Tallahassee, Florida; Gordon reported from Washington, DC
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Associated Press Writers Jonathan J. Cooper of Phoenix, Arizona; Michael Liedtke in San Ramon, California; Barbara Ortutay in Oakland, California; and Brian Witte of Annapolis, Maryland, contributed to this report.
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Follow Gordon to https://twitter.com/mgordonap and Calvan at https://Twitter.com/BobbyCalvan.