(Bloomberg) — Some of the world\u2019s largest technology companies swiftly quashed a California legislative measure that pitted giants like Apple Inc. and Google against smaller rivals, a display of their immense political influence in their home state.<\/p>\n
Most Read from Bloomberg<\/p>\n
The legislation, called the \u201cBased Act,\u201d emerged from an unusual alliance of \u201clittle tech\u201d advocates, including influential startup incubator Y Combinator and the army of small companies it backs, along with consumer groups.<\/p>\n
Sponsored by state Senator Scott Wiener, a San Francisco Democrat and a leading voice on tech regulation in California, the bill sought to stop major technology platforms from favoring their own products over those of competitors in places like Apple\u2019s App Store.<\/p>\n
The bill crumpled in the last week under a pressure campaign waged by the tech companies, spearheaded by the California Chamber of Commerce and the big tech trade group Chamber of Progress, which identified killing the measure as its top priority for the year. Tech lobbyists buried it in little more than a month.<\/p>\n
\u201cThey absolutely flooded the Capitol with lobbyists to trash the bill and times to spread misinformation,\u201d said Wiener, who is running for Congress. \u201cIt was a tidal wave lobbying effort, and we were at a real disadvantage.\u201d<\/p>\n
The overwhelming push underscores the powerful lobbying machine the world\u2019s biggest tech companies have assembled to kill off bills that pose a threat to their business, in particular in the most populous state, where new laws could force national or global changes.<\/p>\n
The Based Act was similar to European tech antitrust regulations the companies have long opposed, which could cost them tens of billions of dollars annually, according to some estimates. Already, the European Commission has issued more than $7 billion in fines to the big tech companies over the past two years.<\/p>\n
\u201cThe companies are very concerned that these regulations do not come to the United States,\u201d said Joseph Coniglio, an antitrust researcher with the tech-funded think tank Information Technology and Innovation Foundation. \u201cIt risks fundamentally changing the way that they do business in the digital economy.\u201d<\/p>\n
Minutes after Wiener started introducing the bill on March 18 \u2014 and even before he was done speaking about it \u2014 the Chamber of Progress had already put out a statement attacking the proposal.<\/p>\n
The group, which counts Alphabet Inc.\u2019s Google, Amazon.com Inc. and Apple among its members, drove constituent calls to members\u2019 offices arguing the bill could degrade popular products like Google Search and Apple\u2019s app marketplace. The group ran ads claiming the bill would make search results \u201cless useful,\u201d deliveries \u201cslower\u201d and phones \u201cless secure.\u201d<\/p>\n
Y Combinator and others unsuccessfully attempted to counter that narrative. They said the companies were exaggerating the impacts it would have on their business and spreading falsehoods about the potential costs for consumers.<\/p>\n
It wasn\u2019t the first time the big tech companies beat back the \u201clittle tech\u201d movement.<\/p>\n
For two years, Google, Apple, Amazon and Meta formed a unified front and spent more than $100 million in lobbying and advertising to kill the American Innovation and Choice Online Act \u2014 a bipartisan bill in Congress similar to the Based Act \u2014 in 2022. Smaller companies like Yelp Inc. and DuckDuckGo, longtime Google foes, and Proton AG backed both bills.<\/p>\n
When Wiener\u2019s Based Act emerged, the network of big tech groups and lobbyists repurposed some of the materials they used to kill off the federal legislation and oppose the EU regulations. Five different big tech trade organizations worked to oppose it, an unusually united front for the groups, which have splintered in recent years.<\/p>\n
The companies themselves also intervened directly, a rare step for a state bill so early in the legislative process. Google\u2019s president of global affairs Kent Walker said the bill was \u201ceven worse\u201d than similar tech regulations approved by the European Union, which the companies have long opposed.<\/p>\n
Apple\u2019s senior director of government affairs Tim Powderly in a letter to California lawmakers compared the bill to Europe\u2019s Digital Markets Act and said it could \u201chave the effect of forcing companies to spend significant time and resources complying with regulations instead of building new products.\u201d<\/p>\n
The companies even mobilized airline lobbyists to oppose the bill, claiming it could harm Google\u2019s ability to send customer traffic to their websites.<\/p>\n
One of the key witnesses who testified against the bill, a California resident who said it could hurt his small business, was backed by a big tech-funded group, the Connected Commerce Council.<\/p>\n
The small business owner Jerick Sobie in an interview said the Connected Commerce Council, which receives money from Amazon and Google, told him about the bill and asked him to testify on it. The group reimbursed him for his expenses. Sobie said he sees the funding as a \u201cnecessary evil\u201d because small businesses often don\u2019t have the resources to lobby.<\/p>\n
The Connected Commerce Council and Google didn\u2019t respond to requests for comment.<\/p>\n
The bill failed on April 20 after a losing vote in a key tech policy committee focused on privacy. It was approved the previous week in a different committee, which includes Wiener.<\/p>\n
State Senator Christopher Cabaldon, a Democrat who heads the privacy committee, emphasized the tech industry\u2019s importance to California.<\/p>\n
\u201cA lot of people work there, a lot of tax revenue, communities that are founded on it,\u201d Cabaldon said in an interview. \u201cSo our charge is to protect privacy and consumers and also to account for \u2014 like Hollywood or the wine industry in my district \u2014 technology as a fundamental California industry.\u201d<\/p>\n
Cabaldon, however, is also connected to Chamber of Progress via the Democratic political organization NewDEAL. Several people affiliated with NewDEAL, including its founder Helen Milby, are on the Chamber of Progress\u2019 advisory board. Cabaldon declined to comment on the Chamber of Progress.<\/p>\n
Following the vote, Ben Golombek, an official with the California Chamber of Commerce, celebrated the outcome, calling it a \u201ctrue team effort\u201d to defeat the bill, according to a copy of the email. Golombek urged the recipients to \u201cthank\u201d the lawmakers who voted against the bill.<\/p>\n
The California Chamber of Commerce \u201copposed Senate Bill 1074 on the grounds that it would have harmed business of all sizes and California consumers,\u201d the group said in a statement. \u201cAs is the case with other advocacy organizations, CalChamber routinely applauds legislators who share our views.\u201d<\/p>\n
Golombek closed his message by urging allies to \u201cremain vigilant,\u201d noting that Wiener is \u201crelentless\u201d and could attempt to revive the proposal in the state assembly. Wiener is favored to win his bid to fill the seat in Congress vacated by former House Speaker Nancy Pelosi.<\/p>\n
Wiener, when asked if he would try to pursue a new version of the bill through legislature maneuvering, said, \u201cStay tuned.\u201d<\/p>\n
–With assistance from Andrew Oxford and Felipe Marques.<\/p>\n
(Updates with letter by Apple executive in 16th paragraph. An earlier version of the story corrected Scott Wiener\u2019s role in a legislative committee.)<\/p>\n
Most Read from Bloomberg Businessweek<\/p>\n
\u00a92026 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — Some of the world\u2019s largest technology companies swiftly quashed a California legislative measure that pitted giants…\n","protected":false},"author":2,"featured_media":288276,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[9657,17039,7,15079,9,8,14624,64478,1621,123390],"class_list":["post-289526","post","type-post","status-publish","format-standard","has-post-thumbnail","category-california","tag-apple-inc","tag-bloomberg","tag-california","tag-california-chamber-of-commerce","tag-california-headlines","tag-california-news","tag-google","tag-google-search","tag-scott-wiener","tag-technology-companies"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/289526","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=289526"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/289526\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/288276"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=289526"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=289526"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=289526"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}