2020 Ballot Initiatives Affect Tech Industry

Privacy, the gig economy, and access to digital information in our cars were all issues on ballots Tuesday for direct response of the voters. U.S. technology companies will be affected by the results of these propositions.

November 3, 2020, was a substantial election for direct ballot initiatives affecting technology, the internet, and digital information. Several states offered tech-minded direct voter propositions, and the reverberations of their passage will affect us for many years.

Most notable is the passage of Proposition 24 in California, known as the California Privacy Rights Act and supplementing the recent legislative passage of an omnibus consumer privacy bill last year in California.  That legislation, the CCPA, went into force at the beginning of 2020 with additional regulations passed throughout the year and attorney general enforcement beginning in July 2020.  Now, about 120 days later, the entire privacy landscape changes again for businesses managing consumer information in California.

Along with granting consumers new privacy rights, California Proposition 24 provides for the creation of the first privacy enforcement bureaucracy in the United States.  Europe has its Data Protection Offices and Canada has the Office of the Privacy Commissioner, but until now, no authority exists solely to enforce privacy protection laws.  Most states leave that work to their attorneys general, and the federal government offers a cross-section of enforcement from agencies with broader mandates like the Federal Trade Commission, the Office of the Comptroller of the Currency, or the Department of Health and Human Services. So the California specific enforcement dynamic will be watched closely by other states and likely the executive branch of the federal government.

The L.A. Times reported “The new privacy law brings California more closely in line with the European Union’s General Data Protection Regulation, and as the strongest law in the U.S. is likely to serve as the standard for companies across the nation. The next step in its implementation is assembling the new agency’s five-seat board, which will be appointed by the governor, state attorney general, state Senate rules committee, and speaker of the state Assembly.” The article also reported, “Despite the ballot measure itself clocking in at 52 pages of dense technical language, many of the practical details of compliance and enforcement remain to be hashed out.”

Proposition 24 will likely have lasting effects on how websites interact with their users, providing initial administrative choices as consumers first click on a site.  As C/NET wrote, “Proposition 24 will also likely set in motion an effort to create a system to let internet users automatically tell websites not to collect their data. Many websites show a pop-up to new visitors letting them either accept their tracking policies or go into a settings section and uncheck several boxes to opt-out.

Other sites make it even more complicated, offering a list of several third-party web tracking services that users can visit individually to opt-out of their data tracking.”

The failure of a California ballot initiative also made tech news.  Proposition 22 would have forced gig economy companies like Uber and Lyft to treat their drivers as full employees with benefits, rather than contractors, removing incentives to bring on more workers and reducing flexibility for those who want to drive part-time. ABC News reported “Fifty-eight percent of voters rejected Proposition 22.

Uber, Lyft and other app-based ride-hailing and delivery services spent $200 million to combat the measure.” Labor unions had pushed hard for this law and lost.

In Massachusetts, over 75% of the electorate voted in favor of the “right to repair” law forcing automakers to open up their wireless APIs so that independent repair shops can access the telematics information stored in the vehicle. We covered this ballot initiative in the blog on election day, and its importance in the ongoing fight to allow consumers full options to repair the things that they buy. This referendum was one of the most expensive in state history. As reported in a Massachusetts focused website, “Both sides spent a combined $42.8 million, exceeding the 2016 record of $41.2 million over a ballot measure on charter schools that failed. The prior record was set in 2014 when $15.5 million was set on an unsuccessful ballot measure to repeal the gaming law. . . the “yes” side spent roughly $6.50 per voter, while opponents of the ballot measure spent $6.69 per voter. The high spending on the ballot measure, especially from out-of-state donors isn’t uncommon in a proposition that could have ripple effects in other states, a campaign finance expert said last month.”

The voters in Michigan passed Proposal 2, which amends the state constitution to provide electronic data and communications the same protections from unreasonable search and seizure as the homes and papers of Michigan residents receive. The Proposal also requires a search warrant to access a person’s electronic data or electronic communications, under the same conditions required for the government to obtain a search warrant for physical home and property. A first of its kind constitutional limitation on police powers, it is expected that the ACLU will push for similar initiatives in other U.S. states over the coming years. Advocating for the passage of Proposal 2, Merissa Kovach of the ACLU wrote in the Detroit Free Press, “Because electronic communications can reveal the most intimate details of our lives, this information must be covered by the same procedural safeguards that already exist for the search and seizure of a person’s physical property. If government agents need a search warrant to enter our homes and search through our closets and the papers locked in desk drawers, the same sort of due process should be required if they want to go rifling through electronic data that can be every bit as revealing.”

One of the most underhanded and sinister power plays in technological history is the fight by cable and telephone companies over the past twenty years paying state and local lawmakers to pass laws prohibiting the formation or provision of public-access internet systems. Such laws force a virtual monopoly or duopoly of cable-oriented access on cities and rural areas, forcing all of us to pay the cable and Wi-Fi bill to huge private companies and leaving the poor without viable alternatives. Denver voters decided to opt-out of such a law prohibiting the use of tax dollars to build a municipal internet. A referendum in Chicago would advise the city to ensure all communities have access to broadband. 90% of Chicago voters believed that internet access should be a public utility.

When tech is on the ballot, the voters can answer directly which business models should be protected and which run against the public interest.  As our electronic lives become more important, tech companies are likely to see more interest in the coming years in direct voting on issues affecting the digital world.