Technology Issues to Watch in 2022

As states kick off their 2022 legislative sessions, here are some of the main topics we expect lawmakers to explore in the area of technology policy. This post is part of our series on state policy issues to watch in 2022 (click here to see all issues areas).

Data Privacy 

• Background: Internet sites and mobile phone applications have become ubiquitous, adding ways people can connect and making life more convenient. Many websites collect data on users for various reasons, including selling or sharing that data to advertisers. New laws have been proposed to give consumers more control over what happens to their personal information, including the right to know what is being collected, the right to opt out of the collection of that data or from having it shared with a third party, a right to correct the data, or to even have it deleted. 

• Why It’s Trending: New privacy laws went into effect in the European Union in 2018, sparking a movement in California that resulted in the first comprehensive privacy law in the United States. Since then, lawmakers have added more scrutiny to how companies handle personal information following news stories on how Cambridge Analytica purchased consumer data to target voters. The issue has also found bipartisan support with members of both parties interested in protecting privacy, and politicians also looking for ways to target tech companies. 

• Current Landscape: With several bills stalled in Congress with little hope of moving in the current state of gridlock, states are expected to take the lead in shaping public policy in consumer privacy. Colorado and Virginia joined California in enacting comprehensive privacy legislation, while Florida, Oklahoma, and Washington all came very close to passing legislation in 2021.

• 2022 Outlook: The more business-friendly privacy laws passed in Colorado and Virginia may be the new template for states going forward, but expect battles over whether or not privacy laws should include a “private right of action” that would enable consumers to sue directly for violations. Rather than only allowing consumers to opt out of certain uses of their information, we could see legislation that goes further and prevents companies from certain uses of personal information unless the consumer opts in. Expect more scrutiny on personal information collected on minors, and added protections for certain sensitive data related to race, religion, sexual orientation, citizenship, genetics, or health records. Lawmakers will also look to prevent companies from using manipulative interfaces, known as “dark patterns,” to obtain consumer consent.  States may also look to require data brokers to register with the government, something California and Vermont already require, with a legislative committee in Oregon already drafting such a bill. States are expected to consider more legislation requiring transparency and protections for certain classes in algorithms and automated-decision making. 

Content Moderation

• Background: When the internet first came into widespread public use, questions arose as to whether websites would be held liable for their users’ content. In 1996, Congress passed the Communications Decency Act, of which Section 230 allowed an “interactive computer service” to be treated as a platform, not a publisher, and not liable for what was posted by users. That provision has recently been called into question Many Republicans have argued for a full repeal, while Democrats argue sites should bear some liability for hate speech, harassment of users, and the spread of misinformation.

• Why It’s Trending: Conservatives on social media apps like Twitter and Facebook have accused the sites of censoring their political views through partially blocking content, known as “shadowbanning,” or through outright bans. These accusations came to a head when Facebook banned President Donald Trump for two years and Twitter levied a permanent ban on the former president. Democrats have also added scrutiny, accusing social media companies of not doing enough to combat the spread of misinformation related to the presidential election and COVID-19 on platforms.

• Current Landscape: All but ten states introduced some sort of legislation to either prohibit social media sites from censoring certain content, allow users to sue for having content censored, or to make sites liable for certain content on their sites. Florida Governor Ron DeSantis (R) made social media censorship a major part of his platform and signed into law a bill prohibiting a social media platform from “deplatforming” a political candidate. However, the Florida law was blocked by a federal judge just before going into effect. Texas enacted a law that would prohibit social media companies from banning users over political viewpoints, but that law was also blocked by a federal judge. The laws are seen to be on shaky ground legally, since the Communications Decency Act preempts state action, and any law that prohibits companies from moderating content may be an infringement on their First Amendment rights to free speech.

• 2022 Outlook: This year, federal appeals courts will consider the injunctions that have blocked the Florida and Texas state laws from being enforced. In the meantime, expect a flurry of bills attacking social media companies for content moderation. Even looming court challenges aren’t likely to discourage legislative action as lawmakers know they can score political points by taking a shot at “Big Tech” with polling showing voters supporting regulation of social media companies. Besides content moderation, legislators may also look to regulate the algorithms that determine what content is put before viewers, particularly children.

  
  

Technology Taxes

• Background: Legislators on both sides of the aisle have contemplated ways to levy punitive taxes on the “tech industry” for years, albeit for different reasons. Tech taxes refer generally to taxes on large companies seen as existing primarily in the digital or information technology space, including taxes on data and digital advertising. The scope of these policies, however, often extend far beyond big tech companies and often would result in levies on a wide array of industries, both large and small, and thus would pyramid throughout the economy.

• Why It’s Trending: “Big tech” has been under scrutiny from both federal and state legislators in recent years; however, legislators previously focused on issues like privacy and content moderation, not tax issues. Things changed when a New York Times op-ed from economist Paul Romer proposed “new legislation could establish a tax that would encourage platform companies to shift toward a healthier, more traditional model.” A few state lawmakers pivoted to focus on the tax angle, with Maryland leading the pack in enacting a digital advertising tax (the only state to date to enact a tax allegedly targeted at tech, although the actual impact would fall on businesses of all kinds, large and small). 

• Current Landscape: Many are of the opinion that the Maryland tax violates the federal Permanent Internet Tax Freedom Act and also one or more provisions of the U.S. Constitution; two lawsuits are pending regarding the tax. Seven states proposed similar taxes on digital advertising, and Connecticut and Massachusetts seriously considered the tax, but no other states have enacted such a tax. Different types of taxes purportedly focused on the technology sector were also considered, such as New York’s “severance tax” on data collection — another broad tax that would impact many types of businesses. No state enacted a tax on data collection, but we expect various types of so-called tech taxes to be floated again in 2022.

• 2022 Outlook: It’s likely that states will wait and see what happens with the Maryland digital advertising tax litigation before taking any action of their own. However, the conversation about taxing “big tech” will continue as legislators are still concerned about the issue, so other taxes on tech will be introduced in 2022. As the issue has supporters on both sides of the aisle and the taxes are introduced as punitive measures and not revenue raisers, it’s tough to predict which states will take them up.

This post is part of our series on state policy issues to watch in 2022 (click here to see all issues areas).