States Lead the Way in Proposing Laws to Regulate Big Tech

Arizona, Maryland and Virginia are just three states pushing legislation to limit Big Tech companies such as Google and Apple on issues including digital advertisements, app-store fees and online privacy. Their actions appear to highlight a growing trend: that state capitals are emerging at the forefront of potentially regulating Silicon Valley behemoths. While the federal government is holding hearings and suing some Big Tech companies, states may beat them to passing laws that will become de facto national standards.

The Wall Street Journal reports that, “in Arizona, a closely watched bill regarding app-store payments has cleared the state House and is expected to be debated in the Senate in the next several weeks.” Prominent app developers have long complained of the high fees that Apple and Google charge paid apps and in-app purchases.

The Arizona bill, which would apply to that state’s developers and consumers, allows app developers to choose which payment system to use to charge users. Representative Regina Cobb (R-Arizona), the law’s chief sponsor, said the final vote, which could come within the next month, will likely pass the bill despite heavy lobbying from Apple and Google.

This month, Virginia governor Ralph Northam inked a new law establishing privacy rules similar to California’s 2018 privacy law, “with added limits on the consumer data that companies can collect online.” In February, Maryland legislators passed a law to tax advertising revenue of Amazon, Facebook, Google and their ilk.

Texas is “proposing a measure that would prohibit social-media companies from banning users based on their viewpoints … [and] New York state recently looked into changing its antitrust laws to make it easier for it to sue tech companies.” Beacon Policy Advisors senior analyst Sam McGowan noted that, unlike federal legislative bodies, “many state governments have fairly short legislative sessions … meaning bills can swiftly make their way through committees and to votes.”

According to Stanford University management and business lecturer Robert Siegel, “tech companies’ soaring growth and influence during the pandemic has raised urgency at the state level.” In 2020, the biggest “companies — Amazon, Google, Facebook, Apple and Microsoft — all saw staggering growth,” with their combined revenue growing to $1.1 trillion, and their collective market capitalization to $8 trillion.

“Large technology companies have no choice but to engage,” said Siegel. “So much money has been made by these companies, and that has everyone gunning for them. They have a size and scale and reach that nobody has.”

Facebook vice president of state and local policy Will Castleberry echoed other Big Tech companies when he stressed that a state-by-state “patchwork approach to privacy doesn’t give the consistency or clarity that consumers or businesses need.” “That’s why we hope Congress will pass a national privacy law,” he said.

WSJ reported earlier that, “Facebook and Amazon outspent all other U.S. companies in federal lobbying last year,” with Facebook spending almost $20 million, up 18 percent from 2019 and Amazon spending $18 million, up from about 11 percent.

Related:
Facebook and Amazon Dropped the Dime on Google, Politico, 3/16/21