Tech

Why the next Big Tech battle is in the state capital

High-tech companies are turning their attention to state capitols across the country as the wave of draft lands opens new frontiers to limit Silicon Valley’s power.

Arizona, Maryland, and Virginia are one of the states where lawmakers are trying to limit the power of high-tech companies to:

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Google -2.50%

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Apple Co., Ltd.

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From online privacy and digital advertising App store charges.. State policy proposals have bipartisan support from lawmakers who want to mitigate the influence and financial influence of businesses that have grown during the pandemic.

According to state representatives, Google and Apple have hired local lobbyists to immerse themselves in the details of the legislation. Tech companies are faced with potential rules that limit platform reach, squeeze revenue with taxes, and force additional privacy disclosure.

Well-known tech companies are embracing remote work in the outflow of skilled workers from Silicon Valley. The WSJ finds out what that means for innovation and productivity, and what companies are doing to manage their impact.

While federal lawmakers are holding a hearing Discussing policies to regulate tech companies, Debate and voting can occur first in the state. State law is important because, if passed, it could become a de facto national standard without federal law. Similar to California’s 2018 Privacy ActThis gives consumers both the right to access the personal information collected by businesses and the right to request that the data be deleted and not sold.

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Initially opposed to California’s actions, Supported them after they came into effect..Companies such as

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We have chosen to respect the new rules across the country.

“Many things have happened since California passed the original. [data] The 2018 Privacy Act, said Sam McGowan, senior analyst at Beacon Policy Advisors LLC, a policy research firm. Parliamentarians’ concerns now extend far beyond privacy to topics such as anti-competitive behavior and how to do it. Social media companies crack down on content, He said.

In Arizona, a bill that is being closely monitored for app store payments has passed the state legislature and will be discussed in the Senate in the coming weeks. The law frees some software developers from the fees Apple and Google charge on their apps. This can account for up to 30% of revenue from paid apps and in-app purchases. App developers can bill people directly through the payment system of their choice. The bill applies to developers and consumers of Arizona-based apps, but it can set a broader precedent.

Republican Rep. Regina Cobb, the main sponsor of the bill, said the bill is about “consumer protection and transparency” and a final vote could take place next month. Mr Cobb said she believed she had enough votes to pass the bill in the narrowly divided Senate. According to Cobb, Apple and Google are heavily opposed to the bill.

Apple declined to comment on lobbying in Arizona. A spokeswoman for a company said Apple “created the App Store to be a safe and reliable place for users to download their favorite apps and a great business opportunity for developers. It could break a very successful model and undermine the strong protection we have given to our customers. “

Google refused to comment on state law and lobbying.

In February, Maryland Congressmen joined Google, Facebook,

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From digital advertising. This month, Virginia Governor Ralph Norsam signed a new privacy policy similar to California, adding restrictions to the consumer data businesses can collect online.

Washington has introduced privacy laws. Some states are targeting moderation of online content, and Texas is proposing measures to ban social media companies from banning users from the user’s perspective. The state of New York recently considered changing antitrust laws to make it easier to sue tech companies.

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Many state governments have fairly short legislative sessions that last weeks or months, so states may have an easier way to pass the bill than Congress, which means the bill goes through the committee. It means that you can vote.

Rapid growth and influence of technology companies According to Stanford University Business Administration Lecturer and Business Strategy Researcher Robert Siegel, the urgency increased at the state level during the pandemic.

The five biggest companies, Amazon, Google, Facebook, Apple and Microsoft, all grew tremendously in 2020. This is because home-based Americans and businesses have turned to online shopping, software and cloud computing services, smart devices, and video streaming. The total revenue of these companies increased by a fifth to $ 1.1 trillion, and the market capitalization surged to $ 8 trillion during the pandemic.

Given the interests and the view of the necessity of more regulation, tech companies need to play a more active role in influencing the law, Siegel said. Facebook and Google are one of the technology companies Currently seeking federal regulations on the issue Data privacy, artificial intelligence, etc.

“Large tech companies have to be involved,” Siegel said. “These companies make so much money that everyone is aiming for them. They have size and scale and have a reach that no one has.”

“While we continue to support good bills for consumers, our patchwork approach to privacy is consistent and clear that consumers and businesses need,” said Will Castlebury, Facebook’s Vice President of State and Local Policy. That’s why we want Congress to pass national privacy legislation. “

Technology company Increased legislative spending Recently, at various levels of government. The Wall Street Journal reported in January that Facebook and Amazon outperformed all other US companies in last year’s federal lobbying.

Facebook spent about $ 20 million, up about 18% year-on-year, and Amazon spent about $ 18 million, up about 11% last year. Apple disclosed $ 6.7 million in lobbying, down from a record $ 7.4 million in 2019, and Google also spent $ 7.5 million reporting the decline. Google and Facebook are facing multiple antitrust proceedings, and Amazon and Apple are under preliminary investigations that could go further under the Biden administration.

The state also uses courts to seek change. The Colorado-led coalition of Attorney Generals filed an antitrust proceeding against Google in December over its superiority in online search.Meanwhile, California is investigating how Amazon treats sellers in the online market, and Connecticut officials said Investigate how Amazon sells and distributes digital books..

Amazon declined to comment.

Write to Sebastian Elera Sebastian.Herrera@wsj.com And in Dan Frosch dan.frosch@wsj.com

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Why the next Big Tech battle is in the state capital

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