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Illustration: Sarah Grillo/Axios

The tech industry's most consequential policy fights in 2020 will play out in the states, not Washington.

Why it matters: Momentum on a range of tech issues, from governing online privacy to regulating the gig economy, has stalled in D.C. as impeachment and election campaigns consume attention. State leaders and legislators are stepping in to fill the void. 

"It’s really interesting to see the metamorphosis of states going from being the bench players to being lead hitters. It’s because Congress and the federal government can’t be relied upon to protect consumers."
— Gigi Sohn, former FCC adviser and now a distinguished fellow at the Georgetown Law Institute for Technology Law & Policy

Where it stands: These are the policy fights that have shifted to the states.

  1. Privacy: California's landmark consumer privacy law takes effect this month, while other state legislatures are considering their own privacy efforts amid a stalled attempt in Congress on a bipartisan national law. (Though some on Capitol Hill are still hoping for a breakthrough.) Industry watchers expect to see privacy legislation come up in New York, Washington and Illinois in 2020.
  2. Net Neutrality: California and Vermont are facing litigation over their attempts to impose their own net neutrality regulations after the FCC repealed the Obama-era open-internet rules. New York Gov. Andrew Cuomo said he intends to advance statewide net neutrality legislation.
  3. Gig-economy labor: California is starting to implement a new law that codifies a state supreme court ruling making it hard for companies to treat gig economy workers as independent contractors rather than employees. New Jersey recently fined Uber for allegedly misclassifying drivers as independent contractors and not employees.
  4. Facial recognition: California has a three-year ban on police departments using facial recognition on body cam footage, and the cities of San Francisco and Berkeley have banned the use of the technology by local government. Boston suburbs Brookline and Somerville have also implemented bans.
  5. Home-sharing: Legislatures in some states such as Tennessee and Arizona have passed laws placing restrictions on popular short-term-rental sites like Airbnb and HomeAway.

And then there's antitrust. Here, there may well be federal action. The Justice Department and FTC have both opened competition probes into major tech companies. But the states are throwing their own weight around as well.

  • Attorneys general from 50 states and territories, led by Texas, launched a joint antitrust investigation into Google.
  • New York is leading a coalition of 47 states investigating Facebook.
  • New York and California are leading the multi-state effort to block the T-Mobile-Sprint merger, which was blessed by federal regulators.

Between the lines: State-by-state policy battles will be headaches for all the companies involved. It's expensive to distribute lobbyists in state capitol buildings across the country and deal with localized politics and varying legislative processes.

  • The major players would much prefer to have Congress or federal agencies adopt national rules to forestall a patchwork of different state laws.
  • Sohn views the "patchwork" argument skeptically. "You will comply with the strongest state law, so really in essence, you’re only complying with one."

Some trade groups are beefing up their state operations. BSA | The Software Alliance, which counts Microsoft and IBM among its members, is launching its first state program in 2020, said Craig Albright, vice president of legislative strategy for the group.

  • BSA will hire a director of state advocacy who is expected to be active wherever state privacy efforts heat up, including in California and New York, Albright said.
  • "We can’t ignore the fact that states are going to be moving forward with legislation," Albright said.
  • The Internet Association, which represents tech companies like Facebook and Google, opened a new office in Illinois in 2019. The group's state operations include offices in California, New York and Washington.
  • TechNet, another trade group, has executive directors strategically located in state capitals, and last year added more staff in California and the Southwest.

What to watch: Cities are also asserting their power on these issues and, in the process, either fighting or trying to shape state-level laws that often preempt city-level ordinances.

  • For example, cities are taking the lead on regulating e-bikes and e-scooters, and ride-hailing firms like Uber and Lyft.
  • But as a growing number of legislatures adopt statewide laws, cities are more limited in their ability to pass locally specific efforts.
  • For example, 15 states (including Pennsylvania, Texas and Colorado) prevent cities from building their own municipal broadband networks.

The bottom line: States will be the focus of corporate lobbying while Washington is distracted.

Go deeper

Tech scrambles to derail inauguration threats

Illustration: Sarah Grillo/Axios

Tech companies are sharing more information with law enforcement in a frantic effort to prevent violence around the inauguration, after the government was caught flat-footed by the Capitol siege.

Between the lines: Tech knows it will be held accountable for any further violence that turns out to have been planned online if it doesn't act to stop it.

Dave Lawler, author of World
2 hours ago - World

Uganda's election: Museveni declared winner, Wine claims fraud

Wine rejected the official results of the election. Photo: Sumy Sadruni/AFP via Getty

Yoweri Museveni was declared the winner of a sixth presidential term on Saturday, with official results giving him 59% to 35% for Bobi Wine, the singer-turned-opposition leader.

Why it matters: This announcement was predictable, as the election was neither free nor fair and Museveni had no intention of surrendering power after 35 years. But Wine — who posed a strong challenged to Museveni, particularly in urban areas, and was beaten and arrested during the campaign — has said he will present evidence of fraud. The big question is whether he will mobilize mass resistance in the streets.

Off the Rails

Episode 1: A premeditated lie lit the fire

Photo illustration: Sarah Grillo/Axios. Photo: Chip Somodevilla/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 1: Trump’s refusal to believe the election results was premeditated. He had heard about the “red mirage” — the likelihood that early vote counts would tip more Republican than the final tallies — and he decided to exploit it.

"Jared, you call the Murdochs! Jason, you call Sammon and Hemmer!”