The statehouse versus Big Tech | Commentary

This will be one of the inescapable threads of our digital lives: Government authorities almost everywhere are weighing whether and how to assert more control over the technology that shapes our future.

What had been a relatively hands-off approach to regulating the technology industry is now being reconsidered from global capitals to smaller U.S. states. We’re seeing this play out over taxes, novel forms of work, digital privacy, new applications of corporate power and the bounds of free expression.

Some of the government efforts may be misplaced or counterproductive, but this clash is not going away, and its outcomes will be both unpredictable and momentous.

I discussed these developments and why they matter with my colleague David McCabe, who recently wrote about U.S. states trying to impose new taxes on big technology companies.

Shira: What are some of the proposed U.S. state or local tech laws that you’re watching?

David: The one that just passed in Maryland was a novel tax on ads that companies like Facebook and Google show to state residents. The state is trying to plug budget holes by targeting new taxes at rich tech companies, and it’s not alone. Indiana and Connecticut are considering similar taxes to help fund rural broadband or online bullying prevention programs.

There’s a feeling, too, that these tech companies haven’t been taxed enough relative to their profits and influence on the economy.

Besides the tax measures, New York had proposed reforming its antitrust law to make it easier to sue tech companies.

And there is a bill in Florida that would prohibit companies from suspending the accounts of political candidates. This may be one of several state proposals that we’ll see in response to the unproven claims that social media companies are biased against conservative views.

Shira: Those proposed bills — and North Dakota’s bill on how Apple charges for iPhone apps in the state — seem like issues that Congress typically handles.

David: Yes, but the state legislatures clearly don’t believe issues like data privacy, online expression and tech monopolies are wholly federal matters. Congress also moves slowly or is completely gridlocked on many of these concerns.

It is not clear, though, how far states are permitted to go in these tech regulations and taxes. The Maryland digital advertising tax will almost certainly be challenged in court.

Shira: How do tech companies feel about this?

David: We’ll probably hear more from them that state lawmakers are in over their heads and will hurt their own states’ economies with new taxes or regulation. That’s often how any company responds to more government rules or costs.

And on some issues — notably after California passed strict digital privacy laws — big technology companies are pushing for federal laws, in part to head off any future local or state rules that might be even harsher.

Shira: Is there a common theme among new regulations that tech companies are facing in places like Pakistan, Australia and the United States?

David: It’s a sign of the new reality for Google, Facebook, Amazon and America’s other tech powers. These companies started out as lightly regulated newcomers, but as they grew and went global, other countries started to become concerned about the companies’ effect on their economies, workers and people’s communications.

Now the reconsideration of a laissez-faire approach to tech regulation has landed back in the United States, including in states and cities.

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