Jan 4, 2022 - Technology

The state tech policy battles that will rage in 2022

Illustration of a circuit board pattern on a map of the United States with extra space between each state's border.

Illustration: Megan Robinson/Axios

States will ramp up the momentum they've built in tackling key tech policy priorities through 2022, speeding ahead of any potential federal legislation.

Why it matters: As Congress continues to make little tangible progress passing new rules for the tech industry, state legislatures have taken the lead in enacting new tech regulations.

  • Tech companies have a harder time lobbying individual states, and state legislatures are less receptive to it. Bitter partisan divisions are often less likely to plague state legislatures on tech policy issues.

What to watch: These are the tech policy fights that will play out in the states next year, according to industry watchers.

1. Privacy: Industry groups have pressed Congress to enact a comprehensive privacy law to avoid a patchwork of state regulation, but states continue to move forward while federal lawmakers tread water.

  • Virginia and Colorado passed consumer privacy laws in 2021, and more than 20 other states also introduced their own privacy legislation, according to a tally from trade association TechNet.
  • It is likely states that have introduced privacy bills in the past will re-up efforts to enact them in 2022. Washington, Connecticut, Florida Massachusetts, Minnesota, Ohio, Oklahoma and Tennessee are states to watch.

2. App store regulations: Arizona advanced a bill that would let developers in the state avoid the typical 30% fees that Apple and Google charge developers, but it ultimately failed after intense industry lobbying.

3. Speech and content moderation: Lawmakers in Florida and Texas, raising complaints that conservatives had been censored, both passed laws aimed at limiting social media companies' content moderation practices — but those laws were blocked by the courts.

  • Despite the rulings, industry watchers expect other states to pursue similar regulations. Kovacevich also predicted that states may try to pass laws mandating that platforms share more data about how they moderate content.
  • "We are very concerned that that gives the content moderation playbook to the bad guys, and it just helps bad actors evade removals," Kovacevich told Axios.

4. Digital taxes: Maryland in 2021 became the first state to pass a law taxing revenue that large tech companies generate from showing online ads to state residents.

  1. Tech industry groups have sued to overturn the law, and hope that might discourage other states from enacting their own versions.
  • "If it's only been passed in one state and if that is tied up in litigation, I would say on the whole it does make it less likely to have a bill passed," TechNet vice president of state policy and government relations David Edmonson told Axios.
  • The Maryland tax was effective as of Dec. 13.

5. Cybersecurity risks: Maryland and Minnesota considered bills in 2021 that would study cybersecurity risks, and New York considered a data breach notification bill. In total, 21 states considered cybersecurity-related legislation in 2021.

  • Tom Foulkes, senior director of state advocacy at BSA | The Software Alliance, told Axios he expects to see similar efforts to beef up cybersecurity next year.

Meanwhile, tech trade groups are following the action, beefing up their lobbying operations in the states.

  • Chamber of Progress has one person working on state and local issues, but intends to hire two additional staffers and potentially more, Kovacevich said.
  • TechNet recently added a new regional director, bringing coverage to every state in the country.

The bottom line: "There is not the internet of Texas. There is not the internet of Maine. There is the internet. And a lot of these issues should be dealt with at the federal level," Edmonson said.

  • "But that message only goes so far with state legislators when what they see is inaction."
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