California bill to stop Big Tech domination fails to get out of committee

SACRAMENTO, Calif. (CN) — Supporters of a bill that would have imposed anticompetitive rules on internet giants called themselves David going up against Goliath.

The advocates lost their battle to pass the Blocking Anticompetitive Self-preferencing by Entrenched Dominant platforms, or BASED, Act, but said it’s not the last round.

The legislation — Senate Bill 1074, written by San Francisco Democratic state Senator Scott Wiener — would have put restrictions on companies like Google and Apple. They would have faced prohibitions from blocking competing app stores and been prevented from manipulating search results to send people to their own products.

The bill passed its first hurdle earlier this month, but failed on Monday to get enough votes to advance out of the state Senate Privacy, Digital Technologies, and Consumer Protection Committee.

“Big Tech has immense power over every aspect of our lives, and it uses that power raise prices, limit freedoms and rig the rules of the internet to stifle competition,” Wiener said in a statement. “We all deserve an internet that is free from interference by giant monopolistic corporations, and I’m exploring options to continue advancing protections.”

At its core, Wiener designed the bill to stop self-preferencing — the habit of large digital platforms to promote their products while hurting competitors. The senator has argued self-preferencing leads to less service and fewer consumer choices, along with less innovation in the tech sector.

Additionally, it walls off start-ups and mid-sized companies from the online marketplace, he said, unless they concede to rules created by the digital giants.

Groups like Economic Security California Action and Y Combinator supported the legislation.

“David lost this round to Goliath,” said Teri Olle, vice president of Economic Security California Action, in a statement. “So we will suit up and come back to the halls of Sacramento to take on the monopoly power in our economy.”

Garry Tan, president and CEO of San Francisco-based business incubator Y Combinator, has said people releasing a product hit a wall — the Apple store — which he likened to the world’s worst DMV. He didn’t oppose Big Tech, but he called himself a supporter of Little Tech. Companies that control access also benefit from restricting it.

The bill’s supporters knew a fight was ahead. Wiener had said the legislative battle would be bruising. His office said Tuesday it faced strong opposition from the biggest tech companies.

Unrelated to the tech legislation, the Assembly Public Safety Committee on Tuesday passed a controversial bill its opponents have dubbed the Stop Nick Shirley Act. It will proceed to the Assembly Appropriations Committee.

Written by Oakland Democratic Assemblymember Mia Bonta, Assembly Bill 2624 would add people designated as immigration support services providers to an existing state privacy program. That program allows certain people to apply for the protections shielding their address from public records.

It also would prohibit people from sharing the addresses or images of those immigration service providers online with the intent to incite violence against them, Bonta said.

Bonta said staff and volunteers have faced doxing and death threats because of their work.

Shirley, an independent journalist who gained fame for reporting on fraud in Minnesota, and his supporters have argued the bill would hamper journalism. Assemblymember Carl DeMaio, a San Diego Republican, has claimed the bill would make it a crime for citizen journalists to expose fraud.

Assemblymember Nick Schultz, a Burbank Democrat and chair of the Public Safety Committee, strongly pushed back against DeMaio at Tuesday’s hearing. He said people applying for the privacy protections must complete an application under penalty of perjury. Schultz slammed the dissemination of what he called misinformation about the bill, specifically mentioning DeMaio.

“This is about setting in place real guardrails to protect people,” he said.