Why the Big-Tech struggles in the state capitals follow

Google, Apple and others are hiring local lobbyists and delving into the details of the proposed legislation, according to state officials. Technology companies face potential rules that limit the coverage of their platforms, hinder tax revenues or force them to facilitate additional disclosures of confidentiality.

While federal lawmakers have held hearings and are discussing technology companies’ regulatory policies, debates and votes could take place in the states first. If enacted, state laws matter because they can become de facto national standards in the absence of federal action, as in the 2018 California Privacy Act, which gave consumers both the right to access personal information that companies collect from as well as the right to request such data. to be deleted and not sold.

Facebook Inc.

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initially opposed the California measures, but supported them after they came into force. Companies like Microsoft Body.

they opted to honor the new rules across the country.

“So much has happened since California passed the original [data] confidentiality act ”in 2018, said Sam McGowan, senior analyst at political research firm Beacon Policy Advisors LLC. Parliamentarians’ concerns now extend beyond confidentiality to topics such as anti-competitive behavior and how social media companies control content, he said.

In Arizona, a closely monitored bill on payments in app stores has eliminated the State House and is expected to be debated in the Senate in the next few weeks. The law would release some software developers from the fees Apple and Google pay for apps, which can generate up to 30% of paid app sales and in-app purchases. Application developers could charge people directly through the payment system of their choice. The bill will apply to application developers and consumers in Arizona, but could set a broader precedent.

Republican State Representative Regina Cobb, the main sponsor of the legislation, said the bill was about “consumer protection and transparency” and said a final vote could take place next month. Ms Cobb said she believed there were enough votes to pass the bill in the narrowly divided Senate. Apple and Google have strongly lobbied against the bill, Ms. Cobb said.

Apple declined to comment on the Arizona lobby. A company spokeswoman said that Apple “created the App Store to be a safe and reliable place for users to download the apps they love and a great business opportunity for developers. This legislation threatens to break that very successful model and undermine the strong protections we have implemented for customers. ”

Google declined to comment on the legislation or any lobbying efforts in the state.

In February, Maryland lawmakers passed laws that would tax the revenues of companies such as Google, Facebook and Amazon.com Inc.

from digital advertising. This month, Virginia Gov. Ralph Northam signed the law with new privacy rules similar to those in California, with added limits on consumer data that companies can collect online.

Washington has introduced privacy legislation. Some states have aimed to moderate online content, with Texas proposing a measure that would prohibit social media companies from banning users based on their views. New York State recently considered amending its antitrust laws to make it easier for it to sue technology companies.

States may have an easier way to pass laws than Congress does, Mr. McGowan said, because many state governments have fairly short legislative sessions that last several weeks or months, which means bills they can make their way quickly through committees and votes.

The growth and growing influence of technology companies during the pandemic has urgently increased statewide, according to Robert Siegel, a lecturer in management and a researcher in business strategies at Stanford University.

The top five companies – Amazon, Google, Facebook, Apple and Microsoft – all saw staggering growth in 2020, as Americans and home-based businesses turned to online shopping, software and cloud computing, smart devices. and video streaming. The combined revenues of these companies increased by one-fifth to $ 1.1 trillion, and their collective market capitalization increased to $ 8 trillion during the pandemic.

Given the stakes and what some consider the inevitability of more regulation, technology companies need to play a more active role in influencing legislation, Mr Siegel said. Facebook and Google are among the technology companies that are now calling for federal rules on issues such as data privacy and artificial intelligence.

“The big tech companies have no choice but to get hired,” Mr Siegel said. “So much money has been made by these companies and that’s what drives everyone. They have a size and a scale and a coverage that no one has ”.

Facebook’s vice president of state and local policy, Will Castleberry, said the company “will continue to support bills that are good for consumers, but a confidentiality approach does not provide the consistency or clarity that consumers or businesses need.” Therefore, we hope that Congress will pass a national law on confidentiality. ”

Technology companies have recently stepped up legislative spending at various levels of government. Facebook and Amazon surpassed all other US federal lobbying companies last year, The Wall Street Journal reported in January.

Facebook spent nearly $ 20 million, up about 18 percent from a year earlier, while Amazon spent about $ 18 million last year, up about 11 percent. Apple revealed $ 6.7 million in lobbying spending, down from a record $ 7.4 million in 2019, and Google also reported a drop, spending $ 7.5 million. Google and Facebook are facing multiple antitrust lawsuits, and Amazon and Apple have been the subject of preliminary investigations that could further advance under the Biden administration.

States also use the courts to seek change. A Colorado-led coalition of attorneys general filed an antitrust lawsuit against Google in December over its dominant position in online search. Meanwhile, California is looking at how Amazon treats sellers in its online marketplace, and Connecticut authorities are investigating how Amazon sells and distributes digital books.

Amazon declined to comment.

Write to Sebastian Herrera at [email protected] and Dan Frosch at [email protected]