New York State Sen. Michael Gianaris was ecstatic when Amazon named Long Island City in 2018 the winner of its new headquarters, a project that would generate 25,000 jobs and $ 2.5 billion in construction spending for his district. in Queens.
But his support quickly waned when he learned that state and local leaders had promised tax breaks to one of the richest companies in the world worth $ 3 billion in secret deals. A public reaction led Amazon to cancel the investment entirely, but for Gianaris the episode still illuminated the massive power of technology companies that dominate their sectors, oppress traditional businesses and use this lever to expand their reach even further.
Consumer activists, small business owners and state legislators in the United States are increasingly demanding measures to control companies like Amazon, Apple, Facebook and Google, which influence much of everyday life.
This task would normally be left to the federal government. But while the Department of Justice and the Federal Trade Commission have filed antitrust lawsuits against Google and Facebook – both with broad support from the state – Congress remains paralyzed when it comes to making new laws related to Big Tech.
Thus, dozens of bills called “techlash” are being debated in dozens of state chambers, where lawmakers from both major parties are proposing new regulations related to antitrust, consumer privacy, app store fees and ad sales taxes. digital. Republican lawmakers are also battling what they claim, without evidence, to be an attempt to stifle conservative voices on the social networks.
Gianaris, a Democrat, is promoting a historic antitrust bill in the New York legislature. This would establish a new antitrust legal standard – “domain abuse” – and allow for collective lawsuits under state laws.
“Our antitrust laws have atrophied and are not equipped to deal with 21st century and anti-competitive practices,” he said. “Traditional antitrust enforcement doesn’t work because Big Tech has become so big and powerful.”
Technology companies are not content to play defense. Its lobbyists are pressuring state legislators to oppose restrictions they find onerous. In other cases, companies are working to draft their own more favorable bills. On many issues, they also prefer federal legislation to a patchwork of state laws.
A special concern for two of the biggest companies is legislation being considered in several states that would limit the ability of Apple and Google to collect large portions of consumer transactions in their app stores.
Critics say the two major U.S. smartphone companies use their position as custodians of apps to fatten their fee profits and undermine rivals that compete with their own music, video and other services.
Leading the resistance are companies like Epic, which owns the popular video game Fortnite, Spotify and Match.com. They want to force Apple and Google to let them keep revenue from subscriptions and in-app sales without cutting.
In an attempt to avoid possible government reforms, Apple last year cut its standard 30% commission on app purchases for most developers. Google recently did the same with the cuts scheduled for July.
State Representative Regina Cobb, a Republican who sponsors app store legislation in Arizona, said app makers and their customers are being held hostage.
“This is a Chicago-style mafia: ‘You pay us 30% or you can’t play. We will get you off our platform; your business is over, ‘”said Cobb.
Similar legislation is being considered in Georgia, Massachusetts, Minnesota and Wisconsin. The app store legislation in North Dakota died in February, after intense lobbying on 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” by demanding changes that would harm privacy and security.
Movements from three states – California, Nevada and Virginia – to enact 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 from state residents. In Florida, legislation would give consumers ownership of the digital information that companies collect through their spending, social interactions, news and travel habits.
The Florida bill would require companies to disclose the data they are collecting, compel them to delete it at the consumer’s request, and prohibit them from sharing or selling it when they don’t. They can be prosecuted if they fail to comply.
One of its sponsors, Republican state deputy Fiona McFarland, said it is a response to the ubiquitous collection, sharing and selling of personal information.
“It’s everything, from these apps on our phones to payment exchanges and calendars,” she said.
Facebook says it supports some online privacy laws and provides as much information as possible while accounts are being drafted. The Internet Association, the technology industry’s top commercial group representing Amazon, Facebook, Google and dozens of other technology companies, declined to comment.
In California, a bill called the anti-espionage law aims to limit the way in which intelligent speakers can potentially intrude into private life. His sponsor, Republican Representative Jordan Cunningham, disconnected a smart device in his room six months ago, after he switched it on without being asked.
“The only thing that prevents all these recordings from being in the hands of the government is a search warrant,” he said. “These things get hacked all the time, so you know, your data could end up in Russia.”
His bill would extend existing limitations on smart TVs and require companies like Amazon, which sells Echo smart speakers, to obtain permission before recording, transcribing or selling information from any conversation.
The interruption of traditional business by companies – and the tax revenue that they previously provided to governments – has not gone unnoticed either.
Maryland lawmakers this year overturned a veto by Republican Governor Larry Hogan to create the country’s first law that taxes digital advertising. The measure, initially passed last year, prompted several other states – including Connecticut, Indiana, Massachusetts, Montana and New York – to consider similar legislation.
Proponents say the law aims to modernize the state’s tax system and make thriving technology companies pay their fair share. He would assess the revenue tax that technology companies make with digital ads in the state, raising about $ 250 million a year for education.
“Companies like Amazon, Facebook and Google saw their profits rise dramatically during the COVID-19 pandemic, while our main street businesses struggle to keep up,” said Maryland Senate President Bill Ferguson, a Democrat who sponsored the move. .
Opponents defied the law in a 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’s power and the growing influence of companies, said Samir Jain, policy director for the Washington, DC-based Center for Democracy and Technology.
“As a result, there has been a growing reaction against technology companies in terms of the power they have and the ways in which 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 in Phoenix, Arizona; Michael Liedtke in San Ramon, California; Barbara Ortutay in Oakland, California; and Brian Witte in Annapolis, Maryland, contributed to this report.
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Follow Gordon on https://twitter.com/mgordonap and Calvan in https://Twitter.com/BobbyCalvan.