Oct 5, 2019

States add to Big Tech's headaches

Kim Hart, author of Cities

Illustration: Aïda Amer/Axios

Already facing antitrust and privacy enforcement actions from governments around the globe, major tech companies are now grappling with a slew of new potential threats from individual states.

Why it matters: Local governments are more nimble and have higher levels of public trust than Congress, so they have more latitude to get laws passed quickly.

  • That's a problem for tech companies that are trying to shore up public trust while also fighting back an array of regulatory assaults.
  • "From a reputation perspective, you'd hate to have local officials who are generally more trusted gunning for you," says Washington lobbyist Bruce Mehlman.

The big picture: State attorneys general have been particularly active under the Trump administration, acting unilaterally to go their own way in some cases, and uniting to fight Washington in others.

  • Aggressive state AGs with an interest in tech often move into higher profile political roles — such as former Missouri AG Josh Hawley, who's now a Republican senator and a vocal critic of Big Tech.
  • There's also former California AG Kamala Harris, a presidential candidate who, as a senator, was tough on data privacy and election security.

At the state level, populist movements on the right and the left may converge on some tech-related issues, such as perceived partisan bias and and business market dominance.

  • Cities and states are also showing an appetite for intervening in the gig economy, which is expected to have ripple effects far beyond firms like Uber, Lyft and Doordash.

The bottom line: "There's so much change that people don't feel protected from, and the concurrent loss of trust in the establishment," Mehlman says. "So you have a rise of permission-less players who no longer think Washington should be the locus of global leadership."

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