States, not Congress, could pose the biggest threat to tech companies

By Ailan Evans

Despite calls for increased regulation of the tech industry, Congress has yet to pass any major legislation, leaving it up to the states to take action curbing tech companies’ power and influence.

Meanwhile, state legislatures have introduced and enacted legislation on data privacy, antitrust, and content moderation, while state attorneys general have issued a number of legal challenges alleging anticompetitive business practices.

“With a bit of a vacuum at the federal level, states are looking to step in, whether that’s on content moderation, whether that’s on speech on platforms, antitrust and anticompetitive conduct regulation, data privacy,” April Doss, executive director of Georgetown University’s Institute for Technology Law and Policy, told Protocol last week.

Content Moderation

Gage Skidmore/Flickr

Florida Gov. Ron DeSantis

Florida Gov. Ron DeSantis signed legislation in May prohibiting tech companies from banning or suspending political candidates in the state, imposing fines of up to $250,000 per day a candidate is deplatformed. The law also holds social media platforms liable for certain content moderation decisions, in effect allowing Floridians to sue tech companies for banning or suspending their accounts.

“We took action to ensure that ‘We the People’ — real Floridians across the Sunshine State — are guaranteed protection against the Silicon Valley elites,” DeSantis said in a press release.

Though the law is currently being contested in federal court, similar bills have been introduced in Republican legislatures across the country.

Texas lawmakers introduced a bill backed by Gov. Greg Abbot earlier this month that seeks to classify social media companies as “common carriers” and subject them to similar regulation as public utilities like phone services. The legislation echoes a legal challenge to Google proposed by Ohio Attorney General Dave Yost in June that sought to declare the tech giant a public utility, an argument Justice Clarence Thomas has indicated could hold water.

Utah Republican Gov. Spencer Cox vetoed a bill passed by the state legislature in March that would have imposed substantial limitations on tech companies’ content moderation practices. If passed, the bill would have required social media platforms to notify users when moderating their speech, offer an appeals process for users to contest moderation decisions, and publicize their moderation policies.

Kentucky lawmakers proposed a law in January removing liability protections from social media companies that censor certain types of speech. Lawmakers in Oklahoma and Arkansas also introduced legislation designed to curb perceived political censorship, though the bills have not been enacted.

Antitrust

State attorneys general have brought several antitrust challenges to Big Tech, with Google alone currently facing four complaints brought by states alleging anticompetitive conduct.

Over 30 state attorneys general, led by Utah’s Sean Reyes, sued the tech giant in July for allegedly using anticompetitive tactics in its Google Play Store, such as forcing app developers to use Google’s payment processor for all in-app purchases. A similar complaint filed by app developers against Apple was settled Thursday, with the tech company agreeing to change some of its business practices.

“Utah and the other states in our coalition are fighting back to protect our citizens,” Reyes said in a statement announcing the complaint.

Texas Attorney General Ken Paxton led a lawsuit in December 2020 alleging Google illegally maintained a monopoly in digital advertising markets. Paxton previously headed a bipartisan investigation of 48 state attorneys general into the search giant’s business practices.

The Justice Department was joined by 11 Republican state attorneys general in an October 2020 complaint alleging Google maintained a monopoly through manipulating search results and excluding competitors in search advertising. Another December 2020 lawsuit, filed by New York Attorney General Letitia James and 37 other state attorneys general, alleged Google prioritized its own services in its search results.

States also unsuccessfully sued Facebook for its acquisition of WhatsApp and Instagram, with the case dismissed in June. Washington, D.C., Attorney General Karl Racine filed an antitrust lawsuit against Amazon in May over its control of retail prices.

Privacy

State legislatures have perhaps been most successful in enacting privacy laws that restrict tech companies’ ability to harvest personal information. California was the first state to pass major data privacy legislation, approving the California Consumer Privacy Act (CCPA) in 2018.

The law granted Californians a host of new privacy rights and imposed significant regulations on tech platforms’ data collection practices. Californians gained additional insight into data collection policies, the right to opt out of companies selling their personal data, and the right to delete certain information tech companies collected.

Virginia enacted a similar law, the Consumer Data Protection Act (CDPA), in March. The law “grants consumer rights to access, correct, delete, obtain a copy of personal data, and to opt out of the processing of personal data for the purposes of targeted advertising,” according to its official summary.

The Colorado Privacy Act, signed into law by Gov. Jared Polis in July, adheres to a similar framework as the CCPA and CDPA, allowing consumers to opt out of the processing of their data for selling or targeted advertising, and granting consumers the right to access or remove collected data.

What About Congress?

Lawmakers on Capitol Hill have frequently raised concerns over the power and influence of the tech industry, particularly regarding content moderation, but have yet to pass any substantive legislation.

The House Judiciary Committee most recently advanced six bills in June designed to combat tech platforms’ alleged anticompetitive business practices. These bills, backed by a bipartisan group of lawmakers, take aim at exclusionary data policies, monopolistic acquisitions, and discrimination against competitors.

Democratic Sens. Richard Blumenthal and Amy Klobuchar, along with Republican Sen. Marsha Blackburn, introduced a bill earlier this month designed to limit Google’s and Apple’s alleged anticompetitive practices in their app stores.

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Images courtesy of Public domain and Gage Skidmore/Flickr

One thought on “States, not Congress, could pose the biggest threat to tech companies

  1. We also have had to count on the states to safeguard our elections system, since the feds, under the control of the demoKKKrats have attempted to commandeer it and call any attempts to fix it “racist”. This is another example of the vision and genius of the Founding Fathers…and yes, I still call them Founding Fathers, no matter what the politically-correct term for them is now.

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