As the battle over online security and privacy moves from Washington to statehouses, and states debate and pass a wave of digital protection laws aimed at children, Big Tech companies are fighting a state-by-state battle to protect themselves from the new rules — and landing some profit. A POLITICO review found multiple loopholes cut out of the laws in response to tech industry lobbying in state capitals.
In addition to the Arkansas and Utah bills, California’s Democratic-controlled legislature, which enacted the first child online safety law, recently removed a key provision in a new child online safety bill that would have Californian tech companies sued over “addictive design features,” following lobbying from technology companies.
The battle for digital protections is taking place far from Capitol Hill and K Street, the traditional battlegrounds for high-stakes regulatory fights, in part because Congress has failed to advance any of its own laws to protect children online and states fill the gap.
And the tech industry plans to keep up the pressure, with dozens more bills expected to see action in the country in the coming years.
The leading lobbying campaigns are top trade associations for the technology industry, NetChoice, which represents Meta, Google, Amazon, TikTok and Twitter, and TechNet, which represents Meta, Google, Amazon and Snapchat. TechNet sent letters to Arkansas’ governor and Utah’s governorand NetChoice also sent letters to the governor of Arkansas and the governor of Utah, asking them to veto their state bills, even as the groups worked behind the scenes to win exemptions and protections for some of the largest social media companies.
Big Tech says the new laws remain fundamentally problematic, even if lawmakers make changes. “We see it as a way to make it harder for people to do what speaks to our core values – which are free enterprise and free speech, so our opposition remains regardless of the amendments,” Carl Szabo, NetChoice’s vice president and general advice, said in an interview.
At the federal level, legislators have introduced parental consent and children online safety bills this session, but a divided Congress means that those measures have a bad chance of passing.
The states, meanwhile, have seen a flurry of activity: More than 60 bills introduced in 2023 would require parental consent for teens under 18 to access social media or mandate that Internet platforms redesign their products with children’s safety in mind, according to data from the National Conference of State Legislatures. Many of the bills have bipartisan support, and there are measures being pushed in both Democratic and Republican-controlled legislatures.
Tech Scores Some wins
In Arkansas, Republican Sen. Tyler Dess said he pushed through amendments to narrow the focus of his bill on certain social media apps like Facebook, Snapchat and TikTok, after meeting with several tech trade groups and companies, including Google.
Arkansas lawmakers eventually exempted companies that earn less than 25 percent of their annual revenue from social media — which would include Google’s YouTube. They also carved out exemptions for career networking sites like LinkedIn, cloud storage service platforms like Microsoft and Amazon, and online video games.
In Texas, Republican state Rep. Shelby Slawson introduced an amendment to her parental consent bill — HB 18 — before it passed the House in late April that would exempt its Google for Education and Google Workspace for Education platforms for schools.
Slawson said on the House floor that the amendment was simply intended to be “targeted” for products intended for educational purposes, but would not apply to larger platforms such as YouTube or Amazon.
And in Utah, tech companies will have a chance to rewrite the law’s enforcement measures with Republican state Rep. Jordan Teuscher before it goes into effect next March. He told POLITICO that he plans to talk to tech companies this month about adding a safe harbor to the law and passing an amended version before it takes effect next March.
Dees said that while the tech industry strongly opposed his Arkansas bill, it worked hard to keep a low profile while doing so. “There was always an awareness that they wanted to work on it more quietly on the fringes,” Dees said in an interview.
“No one wanted to be seen as not trying to help children, but I can tell you that there was definitely an initiative to kill this bill completely because they wanted to handle it themselves as opposed to someone else stepping in,” he said.
In California, tech lobbyists also scored another victory. The state Senate Judiciary Committee has removed a provision that would have allowed private rights-of-action lawsuits against tech companies — something strongly opposed by the industry. The same private right of action was also eliminated from last year’s addictive social media design.
“The PRA is being amended because members don’t like PRAs and it’s going to kill the bill,” said California Democratic Assemblywoman Buffy Wicks, who sponsored the addictive draft bill last year. “There was a lot of pressure from the industry to take that out and with it pressure from members.”
Former California Republican Assemblyman Jordan Cunningham, who co-authored the addiction bill, agreed that tech lobbying was gaining the upper hand. He said he’s even had some tech companies say, “‘If you take that out, we don’t have a big problem with it.’ He asked them if they dropped the PRA, would they drop their opposition to the bill. He said they replied, “‘Well, we’re not so sure.’
Tech’s all fronts war
The tech industry argues that complying with a patchwork of different — and often conflicting — state laws will be very difficult for companies to comply with, and a single federal standard would be easier — and cheaper — to comply with.
“There’s no Internet of Texas, Internet of Idaho, or Internet of Montana. And if you’re building compliance programs for the entire country, the idea of doing that on a state-by-state or device-by- device base incredibly expensive and difficult,” David Edmonson, TechNet’s vice president of state policy and government relations, said in an interview.
Accountability groups say it’s a fundamental battle over tech’s role in society — and a potential threat to the industry’s bottom line.
Nicole Gill, co-founder and executive director of tech watchdog group Accountable Tech, said companies are running a two-track campaign. She said they are making design changes that could make small safety improvements for children, “while at the same time their government relations teams — all the way up to their CEOs — are directly lobbying Congress and state legislatures to do absolutely nothing to regulate them.”
“And they are doing this at the expense of our children.”
Dees, the Arkansas lawmaker whose bill sailed through the Legislature in less than 30 days, said the opposition isn’t surprising given how many of the new laws strike at the heart of the social media business.
“Each of these companies did not want this bill to go through,” Dees said. “Everybody has fears that we’re going to mess with their profits.”
The industry has also taken the fight to court. NetChoice reported against California’s age-appropriate design code law in December 2022, and is considering litigation against Arkansas and Utah’s laws. “Conversations are being had,” NetChoice’s Szabo said. “There are a lot of people talking and analyzing.”
Over the last two years, social media platforms have begun rolling out their own changes in an effort to get ahead of new regulations, and perhaps avoid further legislation. Meta says it’s not waiting for state legislation, and has launched more than 30 tools since 2018, including time limits for teens, age verification tech and automatic privacy settings for teens under 16.
In March, TikTok rolled out a 1-hour daily screen time limit for users under 18, and privacy standards for those under 16. Last August, Snapchat announced new features on its Family Center that went live in March, allowing parents to control the type of content limit letting their teenagers watch.
Some of the social media platforms raised concerns that state laws exempting certain players set unfair safety standards.
Kevin Martin, Meta’s vice president of public policy, said in a statement, “Online youth safety laws that hold different services to different standards will subject teens to inconsistent protections online. This bill should provide clear, consistent rules, so that all services meet the expectations of parents.
Meanwhile, Jamal Brown, a spokesperson for TikTok, said, “We will continue to work with lawmakers, industry peers, regulators and others in addressing industry-wide challenges related to youth safety and well-being.”
Google, LinkedIn, Amazon, Microsoft and Twitter declined to comment.
Second chance in Utah
In Utah, technology companies will get another chance to win a big victory, as the bill’s lead author says he’s open to changing its central enforcement mechanism.
Utah has two laws set to take effect on March 1, 2024, but Utah’s Teuscher said he plans to work with tech companies to amend one of the social media laws — SB 152 — to create a safe harbor for companies to protecting private lawsuits if they meet certain requirements, such as possibly a certification regime.
Currently, tech platforms face fines of up to $2,500 per violation if they are charged for not verifying the age of Utah minors on existing or new social media accounts.
“What we’ve told them is that we want to pass the legislation as is, but that we’re going to work over our interim — really starting in May — to try to see if we can develop a safe harbor that exempts them from the private right to actions that are in the bill,” Teuscher said in an interview.
Teuscher said he would consider creating a certification process, possibly under Utah’s Department of Commerce, and plans to begin meeting with social media companies in May to discuss the details. Teuscher said he wants to introduce the measure next January, when the legislature meets, and pass it before the previous law takes effect in March.
“The point of the legislation is not to create some big litigious legislation, but really just to make sure they actually do what they’re supposed to,” Teuscher said.
A safe harbor could be a win for the tech groups. “The PRA is exceptionally broad and untested territory, and obviously one of our biggest concerns,” said TechNet’s Edmonson.
Finally, state lawmakers are up against some of the most powerful companies in the world, with the deepest pockets — and tech plans to continue fighting on all fronts.
But advocates for new limits say public sentiment is on their side. “It takes time, but eventually the public supports efforts to protect children,” said former California Assemblymember Cunningham. “They can slow it down quite a bit, but I don’t think they can stop it.”