Gavin Newsom signs child privacy and social media bills

Hello and welcome to Protocol Policy! Today we’re talking about WTF happening in California. Additionally, the Ethereum split has caught the attention of the SEC and Amazon is facing allegations of creating artificially high prices.

Repression in California

With all eyes on Capitol Hill this week (recess is over, folks), the tech industry has been hit with blow after blow in its own backyard, with Governor Gavin Newsom signing both a new transparency bill and a privacy bill for the kids the tech giants have been fighting to kill. Newsom’s one-two punch underscores how tarnished the tech industry’s reputation has become on its home turf.

Let’s start with the first law signed by Newsom: AB 587. This requires social media companies making more than $100 million in annual revenue to publish their terms of service and submit semi-annual reports to the state attorney general detailing how they have enforced those terms. Each violation can cost them up to $15,000.

  • At first, this looks like a small change from the platform policies and enforcement reports that platforms like Facebook, Instagram, and YouTube already publish. But as the bill’s co-author, Democratic Assemblyman Jesse Gabriel, said in an interview with Protocol, “If these companies were already reporting all this information, they wouldn’t have fought so hard. “
  • The law brings a certain uniformity to all these reports, so that companies must share the same information, over the same periods, rather than choosing their preferred indicators.
  • The industry, of course, argued that the requirement would require companies to provide “sensitive information about how we implement policies, detect activity, train employees and use technology to detect content. requiring moderation”.

The law is different from the social media laws of Texas and Florida. It says nothing, for example, about how social media companies enforce speech. But he could face the same challenges.

  • “We don’t require anyone to have a particular type of policy. We are not requiring anyone to take any action,” Gabriel said.
  • But experts say there are still problems with the government forcing companies to explain their editorial decisions – and punishing them if they make decisions based on information that is not clearly spelled out in their policies and reports.
  • “Published versions can never capture ALL of the service’s editorial rules,” legal scholar Eric Goldman wrote in a forceful takedown of the proposal in June. That means “every service will always be non-compliant,” Goldman wrote.

Then there is the California Age-Appropriate Design Code Act. This law has been no less controversial, and not just for technology.

  • The law requires all California companies providing online services that children might access to default to the highest privacy settings, conduct privacy impact assessments, and report them to the attorney general.
  • It also prevents these companies from using children’s personal information indiscriminately.
  • The bill’s sheer threat – coupled with the UK’s similar age-appropriate design code – has motivated tech companies including Instagram and TikTok to implement new policies to give children a safer experience. and more private on their apps.
  • But critics of the law fear it could jeopardize children’s privacy by forcing companies to use new, untested age verification tools. Already, Instagram is using facial analysis to weed out underage users.

What’s fascinating about all of this is that it’s happening in California, the state where Big Tech is arguably most influential. Don’t forget: In 2009, Newsom, then mayor of San Francisco, announced his first gubernatorial bid for Facebook headquarters, saying the company represented “the best of the new economy in California.”

Now? “California will not sit idly by as social media is armed to spread hate and misinformation that threatens our communities and core values ​​as a country,” Newsom said in a statement on the Transparency Act Tuesday. evening.

What a difference 13 years and a tech-funded recall campaign make.

—Issie Lapowsky (E-mail | Twitter)

In Washington

The Ethereum split may have reclassified the cryptocurrency as a title. Yesterday, Securities and Exchange Commission Chairman Gary Gensler said the split could trigger the Howey test, since “the investing public anticipates profits based on the efforts of others.”

The Consumer Financial Protection Bureau said it will issue guidance on “buy now, pay later” products. In a report, the agency raised concerns about the risk BNPL products pose to consumers.

Meta had a quiet day in Congress thanks to TikTok. TikTok COO Vanessa Pappas was joined by executives from Meta, Twitter and YouTube as part of a Senate committee hearing on social media and homeland security. Pappas has denied claims that China has access to US user data, as Buzzfeed reported in June. The senses. Rob Portman, Mitt Romney and Josh Hawley have been particularly vocal about the potential security risks posed by TikTok operating in the United States, given its ties to China.

The senators touted the potential benefits of the Platform Accountability and Transparency Act. During the morning panel of that same Senate hearing, Portman and several former social media executives suggested that the bill has the potential to increase the transparency of social media platforms and align the platforms’ incentives with the public interests.

The Federal Trade Commission cracks down on deceptive user interfaces. The agency voted at its public meeting on Thursday to release a report on the use of “dark model” sites to manipulate people into making certain decisions. Examples include auto-renewing subscriptions, e-commerce countdown timers, and convoluted privacy options interfaces.

The Drug Enforcement Administration has opened an investigation into ADHD telehealth provider Done. Along with Cerebral, Done was one of the companies that advertised heavily on social media platforms such as Meta and TikTok, as reported by Protocol.


Alibaba — a leading global e-commerce company — is a particularly strong engine in helping American businesses of all sizes sell goods to more than a billion consumers in its digital marketplaces in China. In 2020, US companies made more than $54 billion in consumer sales in China through Alibaba’s online platforms.

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In the States

California sued Amazon for creating artificially high prices. Attorney General Rob Bonta alleged Amazon was limiting price competition by forcing third-party sellers to give their lowest prices on Amazon, preventing other platforms from competing on price. The District of Columbia sued Amazon over a similar allegation in 2021; this case was closed in March.

The Department of Justice has created a nationwide network of crypto prosecutors. The Digital Asset Coordinators Network has assigned more than 150 federal prosecutors to act as subject matter experts and advisors to US law firms charged with prosecuting cryptocurrency-related crimes.

Around the world

The EU will likely investigate Microsoft’s $75 billion takeover bid for Activision Blizzard. Brussels will follow in the footsteps of the UK Competition and Markets Authority, which is likely to step up its antitrust probe into the deal after Microsoft refused to offer solutions.

Tesla plans to move more battery production from Germany to the United States to take advantage of a revamped EV credit that prioritizes domestic production, according to the Wall Street Journal.

In media, culture and the metaverse

Uber reported a major breach that started with an employee’s Slack account. Uber disabled Slack and several other internal systems on Thursday to gauge the extent of the attack. The hacker claimed to be 18 years old and, in announcing the Slack breach, said Uber should pay its drivers more. Former Uber security chief Joe Sullivan faces criminal charges for failing to disclose a security breach in 2016.

The Oversight Committee reviewed Meta’s use of automated image deletions. In particular, he said the use of the Media Matching Service – which uses a human content moderator’s decision to automate future image removals – had the potential “to amplify the impact of incorrect decisions”. The advice specifically referred to a political cartoon in Colombia that had been placed in the Media Matching Service.

In the data

$20 billion: This is the amount Adobe has agreed to pay for the Figma design platform, in a deal that will ring all kinds of antitrust alarms. If the deal goes through, Figma would be Adobe’s biggest acquisition by far – and it would also make VCs, including a16z, Sequoia and Greylock Partners, much richer.

TikTok pulls an Instagram

TikTok is the hottest social platform right now, but that doesn’t mean it’s above “borrowing” from competitors (hence the use of an Instagram). With the launch of a new product on Thursday, TikTok has started offering its own integrated version of BeReal. It’s not the only one, though: Snapchat and Instagram have also borrowed design elements from the buzzy BeReal.


Using economic multipliers published by the U.S. Bureau of Economic Analysis, the NPD estimates that the ripple effect of this Alibaba-fueled consumption in 2020 supported more than 256,000 U.S. jobs and 21 billion dollars. salary dollars. These U.S. sales to Chinese consumers also added $39 billion to U.S. GDP.

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Thanks for reading – see you Monday!

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