While Congress Hesitates, States Intervene to Set Rules for the Internet

Critics of state regulations warned that tech companies weren’t the only ones who would have to maneuver through the mosaic of rules. “For consumers, this means confusion,” said Daniel Castro, vice president of the Information Technology & Innovation Foundation, a think tank sponsored by technology companies.

Apple and Google declined to comment. Jodi Seth, a spokeswoman for Amazon, pointed to a blog post in April by the company’s policy executive, Brian Huseman, who said state laws run the risk of creating a hodgepodge of regulations that would not serve users well.

Will Castleberry, Facebook’s vice president of state and local public policy, said the social network largely supported more federal legislation instead. “While we support state efforts to address specific challenges,” he said in a statement, “there are some issues, like privacy, where it’s time to update federal rules for the Internet, and those should come from Congress.”

To fight fragmented rules, tech companies have gone on the offensive. While data on state lobbying is inconsistent and often underreported, Google, Amazon and Facebook funneled a total of $ 5 million into those efforts in 2019, according to the National Institute on Money in Politics, a nonprofit organization. profit. The companies also increased their lobbying ranks to dozens in state legislatures compared to the skeletal forces of five years ago.

Some of the companies have also recently dispatched top engineers to eliminate state proposals. In February, Apple’s chief privacy engineer, Erik Neuenschwander, testified at a hearing in the North Dakota Senate to oppose a bill that would allow app developers to use their own payment systems and circumvent the rules of the Apple App Store. The bill died a week later in a vote of 36 to 11.

Still, the states have rushed.

Maryland lawmakers in February overturned their governor’s veto on a new tax on sites like Facebook and Google. The tax, the first aimed at the behavioral advertising business, takes a portion of the money that companies make from the sale of advertisements displayed in Maryland. One analysis projected that it would raise as much as $ 250 million in its first year, a fraction of the $ 267 billion in combined annual revenue from Facebook and Google, but a real threat if replicated across states.

The Google, Amazon and Facebook trade groups tried to stop the tax. They hired a well-connected political consultant to argue that it would hurt small businesses. When that failed, business groups sued to block it. The litigation is pending.

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