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Losing the fight against Big

DataCalifornia’s formerly strong stance on consumer protection is being stifled 

by the tech lobby and electoral changesDecember 30, 2015 5:00AM ET

byMichael Keller @mhkeller

Sam Ward for Al Jazeera America

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SACRAMENTO, Calif. — Two years ago, Target suffered a major data

breac i! wic te records of ""# millio! customers were stole! by

ac$ers. Customers migt !e%er a%e $!ow! teir i!formatio! ad bee!

com&romised, owe%er, if it were!'t for a (##) Califor!ia law — te first of its

$i!d a!d emulated arou!d te cou!try — re*uiri!g com&a!ies to !otify

customers we! suc tefts occur.

Tese days, toug &ri%acy legislatio! is faci!g !ew a!d difficult urdles i!

te +olde! State. As a result, te state famous for bei!g aead of te cur%e

o! issues ra!gi!g from e!%iro!me!tal co!ser%atio! to e*ual &ay is falli!g

bei!d i! &rotecti!g digital &ri%acy.

! te last two years alo!e, a !umber of mea!i!gful measures i!troduced i!

te state ca&itol to regulate &erso!al i!formatio! a%e failed. O!e suc effort

would a%e el&ed defi!e wat i!formatio! your car systems collects about

you a!d wat it does wit data it dow!loads from your &o!e, if sy!ced to

te car, suc as your address boo$. A!oter sougt to sed ligt o! a

idde! mar$et for -NA. Ma!y os&itals collect -NA at birt to scree! for

co!ge!ital ealt issues, a!d tere are !o laws &re%e!ti!g tem from stori!g

it i!defi!itely or selli!g it to for&rofit researcers.

/ ra! a bill sayi!g os&itals just a%e to let &are!ts $!ow tis is a&&e!i!g.

could !ot get it troug committee,0 said Assembly Member Mi$e +atto,

cair of te Assembly Committee o! 1ri%acy a!d Co!sumer 1rotectio!. /'%e

met wit all tese security e2&erts a!d tey all say you a%e to sto& ti!$i!g

about if3 you a%e to start ti!$i!g about we! all tis &erso!al data will be

stole!.0

4ile &ri%acy grou&s a!d te tec i!dustry a%e made &rogress i! &rotecti!gusers' &ri%acy from go%er!me!t sur%eilla!ce, te i!dustry is stau!cly

o&&osed to similar regulatio!s tat would re*uire it to disclose its ow! data

collectio! &ractices a!d use of customer data.

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Sam Ward for Al Jazeera America

/4e i! Califor!ia really did establis some im&orta!t &recede!ts tat tur!ed

i!to !atio!al &olicy,0 said 5e%i! 6a$er, former to& 7udiciary Committee staffer i! te state Assembly, !ow wit te America! Ci%il 8iberties 9!io!. /'m !ot

sure a!ybody ti!$s of us i! tose same terms a!ymore.0

Tis sifti!g of gears bega! a decade ago, we! tec com&a!ies bega!

s&e!di!g ea%ily o! lobbyi!g grou&s a!d te growi!g fortu!es of te

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i!dustry became closely i!tertwi!ed wit te state eco!omy. Califor!ia's

budget largely de&e!ds o! &erso!al i!come ta2, alf of wic comes from

te to& " &erce!t of ear!ers — ma!y of wom wor$ directly or i!directly i!

te tec i!dustry. Cou&led wit a ca!ge i! te electio! law tat as &used

state &olitics toward te ce!ter, more busi!essfrie!dly -emocrats are bei!g

elected ta! e%er before. Te effect: te state's istorically stro!g %oice o!

co!sumer issues is slowly bei!g su&&la!ted wit &ro/i!!o%atio!0 argume!ts

at te cost of co!sumers' i!terests, critics say.

4at lawma$ers decide i! Califor!ia, moreo%er, as a! im&act arou!d te

cou!try. A!d legislators are liste!i!g.

/Tere are fol$s wo will do wat te tec i!dustry wa!ts tem to do,0 said

Mar$ Sto!e, wo cairs te Assembly 7udiciary Committee, wic re%iews

ma!y &ri%acyrelated bills. /A!d tat's wat we saw wit te &ri%acy bills tat

came troug last year.0

Rise of the tech lobby

Califor!ia's efforts to &rotect co!sumer &ri%acy were grou!ded i! te state's

co!stitutio!, wic is o!e of just a few tat gra!ts citi;e!s a! e2&licit rigt to&ri%acy. <oters added tat rigt %ia a! ame!dme!t bac$ i! "=>(, but

teballot stateme!t tose %oters read i! su&&ort of it is more rele%a!t ta!

e%er:

/Com&uteri;atio! of records ma$es it &ossible to create ?cradletogra%e'

&rofiles of e%ery America!,0 it reads. A rigt to &ri%acy /&re%e!ts go%er!me!t

a!d busi!ess i!terests from collecti!g a!d stoc$&ili!g u!!ecessary

i!formatio! about us.0

! tis s&irit, te '=#s a!d early (###s saw te &assage a!d e2&a!sio! of a

!umber of la!dmar$ state &ri%acy measures suc o!es o! data breac

!otificatio!, i!creased &rotectio! for tele&o!e calli!g&atter! data a!d te

Si!e te 8igt law, te brai!cild of State Se!. 8i; @igueroa, wic ga%e

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co!sumers te ability to i!s&ect a!d limit wat i!formatoi! fi!a!cial

i!stitutio!s ca! sare about tem.

Tat mome!tum it a s&eed bum&, toug, we! +oogle started its

Califor!ia lobbyi!g o&eratio! i! (##). Arou!d tat time, +mail — te! a

bra!d !ew &roduct — rolled out a !ew form of $eyword ad%ertisi!g tat

sca!!ed te bodies of users' emails. @igueroa alleged tat tis amou!ted to

a! illegal wireta& o! &erso!al commu!icatio! a!d mo%ed to ba! te &ractice.

er bill faced fierce o&&ositio! from te com&a!y, a!d wit stro!g i!dustry

&ressure a!d a lac$ of su&&ort from oter legislators, te measure failed.

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Sam Ward for Al Jazeera America

 A mo!t later, +oogle lau!ced a record B"(#,>"=.D lobbyi!g cam&aig! —

still by far te most te com&a!y as e%er s&e!t i! a si!gle *uarter — o!/discussio!s regardi!g s&yware, email, sca!!i!g, &isi!g, ge!eral

tec!ology issues,0 accordi!g to lobbyi!g disclosure records.

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Oter tec com&a!ies soo! followed suit. O%er te years, a! ecosystem of

trade grou&s a!d lobbyi!g firms as de%elo&ed to re&rese!t te i!dustry's

i!terests i! Sacrame!to.

TecNet, o!e of te biggest tec lobbyi!g firms i! te state, s&e!t !early alf 

a millio! dollars o! lobbyi!g i! te (#"") sessio!, u& from just u!der

B"F#,### we! it started i! (##>. A!oter firm, te !ter!et Associatio!, is

o!e of te !ewest but is also e2tremely acti%e. t as lobbied o! more ta!

)# measures si!ce it was fou!ded i! (#" a!d ofte! se!ds a re&rese!tati%e

to testify i! committee eari!gs. ! October, it osted a &olicy co!fere!ce i!

Silico! <alley at wic Assembly Member E%a! 8ow, wo re&rese!ts te

area, a!!ou!ced te !ew Tec!ology a!d !!o%atio! Caucus. Te grou&

aims to wor$ wit te i!dustry to el& /foster i!!o%atio!0 i! te state.

Ridesari!g com&a!y 9ber was o!e of te biggest tec com&a!ies to

s&e!d mo!ey o! lobbyi!g i! te (#"") legislati%e sessio!. 4ile figti!g a

(#"F bill i!te!ded to curb te misuse of customer locatio! data, 9ber, alo!g

wit a alf do;e! oter grou&s, argued tat te bill would sut dow! ride

sari!g busi!esses a!d rallied customers a!d dri%ers to defe!d te

com&a!ies. Te bill died i! committee.

8awma$ers say te tec!ology i!dustry's u!willi!g!ess to fi!d commo!

grou!d as already set it a&art.

/4at ma$es te tec i!dustry differe!t is te laws bei!g &ro&osed a%e !ot

bee! o!erous by a!y stretc,0 said Assembly Member Mi$e +atto, cair of a

!ew committee o! &ri%acy a!d co!sumer &rotectio!. /Te com&a!ies do!'t

trust go%er!me!t, a!d tey do!'t e%e! see wy tey sould be a &art of te

law.0

Lobbyist spending increases

Large tech companies started lobbying around 2004 and increased their efforts in recent

years.

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Google started lobbying in late 2004 against a bill that would have severly limited ads in Gmail.Other

groups have since followed suit.

Newcomers like Uber and Lyft have spent large amounts in recent regulatory battles.

2003-20042005-20062007-20082009-20102011-20122013-2014$200k$400k$600k$900kGoogleTechNetFacebookInternet Assoc.LyftTechAmericaUberLegislative session

Source: California Secretary of State,Lobbying activity

The top-two system

8obbyi!g is o!ly o!e eleme!t tat as bolstered te tec i!dustry's

i!flue!ce. Rece!t ca!ges i! Califor!ia's electoral system a!d te

eco!omics of ow te state fu!ds its i!itiati%es a%e i!ce!ti%i;ed ma$i!g

busi!ess i!terests a to& &riority.

! (#"(, Califor!ia ca!ged its electio! laws to become a /to&two0 &rimary

system, i! wic te two largest %otegetters i! te &rimary, regardless of&arty, face off i! No%ember. 9!der te old system, te -emocratic &rimary

was ofte! te o!ly com&etiti%e race, si!ce ma!y Califor!ia districts a%e little

Re&ublica! su&&ort.

Now ca!didates a%e to &re&are for bot a com&etiti%e &rimary a!d a

&ote!tially com&etiti%e No%ember electio! agai!st a member of teir ow!

&arty, re*uiri!g twice as muc fu!draisi!g.

Te to&two system a!d similar reforms are also &usi!g %ocal co!sumer

ad%ocates out of te 8egislature i! fa%or of more moderate, busi!essfrie!dly

-emocrats, some &olitical a!alysts say. ! a ge!eral electio! betwee! two

-emocrats, te logic goes, a ca!didate ca! &la! a successful strategy by

a&&eali!g to te ce!ter.

! (#"), -emocratic ca!didates outwardly courted Re&ublica! %oters by

igligti!g commo! grou!d o! &olicy issues, accordi!g to Califor!ia

&olitical a!alyst To!y Gui!! i! a! article &ublised earlier tis year i! te

Califor!ia 7our!al of 1olitics a!d 1olicy.

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Oter reforms, suc as a (#"# rule ca!ge re*uiri!g o!ly a sim&le majority

to &ass te budget, as well as statewide redistricti!g tat year, a%e also

&layed a &art i! &usi!g te state toward te ce!ter.

Sam Ward for Al Jazeera America

t's still too early to see ow tis ca!ge is affecti!g statewide &olitics, but

&ri%acy ad%ocates say tey're already seei!g -emocrats embracs te

busi!ess commu!ity o%er co!sumer grou&s. /Tat's com&letely ca!ged te

&olitical culture ere,0 said Sama!ta Corbi!, a Sacrame!to lobbyist wo

re&rese!ts &ri%acy grou&s.

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 A !umber of legislators wo were fierce &ri%acy ad%ocates a%e left office

a!d bee! re&laced by o!es wit stro!ger busi!ess ties. @or i!sta!ce, State

Se!. Mar$ -eSaul!ier, wo became a 9.S. co!gressma! late last year,

autored a! ultimately u!successful attem&t at regulati!g data bro$ers —

com&a!ies tat buy a!d sell co!sumer data. is seat was filled by -emocrat

Ste%e +la;er, wo came i! seco!d i! te -emocratic &rimary a!d would!'t

a%e bee! eligible to ru! i! No%ember u!der te old rules.

+la;er, a selfdescribed ce!trist, wo! te ge!eral electio! by more ta! !i!e

&oi!ts i! a race tat cost a record B"(." millio!. Accordi!g to state cam&aig!

fi!a!ce data a!d Ma&8igt, a !o!&artisa! &olitical mo!eytrac$i!g grou&,

more ta! "# &erce!t of outside s&e!di!g came from 7obs1AC, te

Califor!ia Camber of Commerce's &olitical actio! committee set u& to fu!d

-emocratic ca!didates wo are li$ely to su&&ort busi!ess i!terests.

! is first few wee$s after bei!g swor! i!, +la;er, more ofte! ta! a!y oter

-emocrat, bro$e wit is &arty. e %oted agai!st a guara!teed familylea%e

bill o! te camber's /7obs 5iller0 list a!d abstai!ed i! a %ote o! a mi!imum

wage i!crease.

Moderate -emocrats i! Sacrame!to are i! te &rocess of formi!g teir ow!caucus i! order to create %oti!g blocs o! $ey issues. Tat still /e!igmatic0

grou&, as described by te 8os A!geles Times, as decli!ed to disclose a!

official list of its members or detail its leadersi& structure. t as weiged i!

successfully, toug, o! rece!t e!%iro!me!tal a!d labor battles.

State revenue sources - Legislative Analyst's Office(pg 4)

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 Although the one percent of earners constitutes roughly 25 percent of all income, that translates

into over 50 percent of the state’s personal income tax revenue.

@or e2am&le, te go%er!or's office estimated tat @aceboo$'s i!itial &ublic

offeri!g i! (#"( would add B".= billio! to state re%e!ues. Te e2tra caswasmea!t to ead off te go%er!or's &ro&osed cuts i! scools a!d social

&rograms for te &oor a!d disabled. 6ut te 1O u!der&erformed a!d te

state lost a! a!tici&ated B## millio! i! re%e!ue, forci!g te go%er!or to

re%ise te state budget.

 As former State Se!. 7oe Simitia! told te Sa! 7ose Mercury News at te

time, /f @aceboo$ is o! a roller coaster ride, we're o! te roller coaster wit

tem.0

1erso!al i!come ta2 re%e!ue is also %olatile si!ce i!come from ig ear!ers

de&e!ds largely o! ca&ital gai!s, wic is a! u!&redictable source of

re%e!ue, accordi!g to a re&ort from te 8egislati%e A!alyst's Office, te

state's !o!&artisa! fiscal ad%isory age!cy.

/Ca&ital gai!s a!d stoc$s, were muc of te re%e!ue comes from, tat's te

stuff tat goes li$e ga!gbusters a!d te! falls troug te floor,0 said 5imRuebe!, wo sits o! te Cou!cil of Eco!omic Ad%isors for te Califor!ia

co!troller.

Volatility in income tax revenue - Legislative Analyst's Office(pg 5)

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Dips in the economy affect both household income and thus the state’s personal income tax. But

income tax revenue fluctuates much more than personal income amounts over periods of boom and

 bust.

! (#"), Califor!ia %oters &assed 1ro&ositio! (, wic created a rai!y dayfu!d to mitigate a!y future mar$et dro&. Reube! says it's a ste& i! te rigt

directio! but as testified before te 8egislature urgi!g e%e! stro!ger

measures. Te most rece!t 8AO fiscal outloo$ re&ort dedicates a sectio! to

te 6ay Area a!d te state eco!omy's relia!ce o! its success.

Tis de&e!de!cy o! a fic$le re%e!ue stream, dri%e! largely by te tec

sector, i! wic fortu!es seem just a! a&&lau!c away, as left some i! te

state retice!t to &ass a!y regulatio! tat could slow its rise.

7im 6eall, a member of te !ew Tec!ology a!d !!o%atio! Caucus told te

Sa! 7ose Mercury News last year, /4e do!'t wa!t a!y legislatio! to a%e a

!egati%e im&act o! jobs i! Silico! <alley.0 Te i!ter%iew was rigt after e

%oted agai!st a bill o&&osed by te tec i!dustry, wic would a%e allowed

users to remotely deacti%ate teir &o!es i! te e%e!t of teft.

Looking ahead

 As tec!ology as become a %ital &art of daily life, &ri%acy co!cer!s a%e

co!ti!ued to grow. Educati!g te 8egislature is $ey, &ri%acy ad%ocates say.

/Te !umber of bills tat try to address &ri%acy doubles e%ery year, but it

does!'t mea! tat te legislators a!d staff are muc more i!formed, a!d it

does!'t mea! getti!g tem e!acted is a!y easier,0 said 8ee Tie!, se!ior staff 

attor!ey at te Electro!ic @ro!tier @ou!datio!.

Tis year a !ew legislati%e committee was created s&ecifically to address

&ri%acy issues. So far, te Assembly Committee o! 1ri%acy a!d Co!sumer

1rotectio!, caired by +atto, as co!tributed to bills o! dro!es a!d body

cameras a!d o!e tat would re*uire ma$ers of !ter!etco!!ected

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tele%isio!s to i!form users we! T<s are recordi!g a!d tra!smitti!g room

audio.

6ut it's ard to tell yet wat effect te !ew committee will a%e a!d if it will be

a success for co!sumer &ri%acy &rotectio!. Te committee, wic was

created i! &art to ease te wor$load of te 7udiciary Committee, also

i!cludes re&rese!tati%es of Silico! <alley, wic some worry will limit its

effecti%e!ess.

/HTe committee was createdI also i! a way to get it out of tat 7udiciary

s&ace a!d i!to someti!g tat migt be a little frie!dlier to te i!dustry's

&ers&ecti%e,0 said Sto!e.

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Sam Ward for Al Jazeera America

Two members of te 1ri%acy Committee, a! Caldero! a!d E%a! 8ow, are

also te fou!di!g cocairs of te !ew Califor!ia 8egislati%e Tec!ology a!d!!o%atio! Caucus, wic was lau!ced at te fall &olicy e%e!t &ut o! by te

!ter!et Associatio!. Two oter members of te 1ri%acy Committee also

belo!g to te caucus.

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Califor!ia!s wo wa!t to resol%e legislati%e gridloc$ also a%e te &ros&ect

of i!itiati!g a ballot measure. Suc a &rocess is e2&e!si%e, owe%er, a!d

could also face fierce i!dustry o&&ositio!. A rece!t Sa! @ra!cisco ballot

i!itiati%e to regulate omesari!g faced BD.F millio! i! s&e!di!g from

 Air6!b, wic o&&osed te i!itiati%e, accordi!g to Ma&8igt. Te &ro&ositio!

failed.

6ut des&ite &ressure, lobbyist Corbi! a!d oters see tis te!sio! as

someti!g Califor!ia is u!i*uely &ositio!ed to resol%e.

/Te trut is e%eryo!e is loo$i!g at Califor!ia o&i!g we ca! figure it out,0

Corbi! said. /6ecause we a%e bee! a leader o! tis issue a!d because te

state is a ub for i!!o%atio! i! tec!ology, we a%e a res&o!sibility to do it

rigt.0