California bid to curb Big Tech self-preferencing fails after Apple-backed lobbying blitz

A California bill aimed at stopping trillion-dollar tech companies from favoring their own products has failed after an intense opposition campaign. Here are the details.

BASED Act fails after intense lobbying campaign

Last month, state Senator Scott Wiener proposed the BASED Act (Blocking Anticompetitive Self-preferencing by Entrenched Dominant platforms Act), or SB 1074, a California bill targeting how large digital platforms treat their own products and those of their competitors.

In essence, the bill would bar companies with at least $1 trillion in market value from prioritizing their own products and services over competitors, while also limiting how they use third-party data and restricting interoperability and data portability.

From the proposal:

This bill would prohibit a covered provider, as defined, from preferencing its own products, services, or lines of business over those of another business user, including manipulating the order of search results or rankings to favor the products or services of the covered provider. The bill would prohibit a covered provider from restricting interoperability or data portability, as specified, including restricting a business user or consumer from obtaining a copy of their data in a useful and portable format.

As reported by Bloomberg, even before Senator Wiener was done introducing the bill on March 18, a pushback campaign was put underway, “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.”

The Chamber of Progress was founded in 2020, and its website currently lists 39 supporting partners, including a16z, Amazon, Apple, Google, OpenAI, and Uber.

According to Bloomberg, the group “drove constituent calls to members’ offices arguing the bill could degrade popular products like Google Search and Apple’s app marketplace,” running campaigns that claimed that the BASED Act would “make search results ‘less useful,’ deliveries ‘slower’ and phones ‘less secure’.”

Following Senator Scott Wiener’s introduction of the bill in March, it quickly advanced through an initial committee vote before ultimately failing in a key privacy committee, despite efforts by giants like Y Combinator to counter the opposition campaign.

Here’s Senator Weiner for Bloomberg:

“They absolutely flooded the Capitol with lobbyists to trash the bill and times to spread misinformation (…) It was a tidal wave lobbying effort, and we were at a real disadvantage.”

Despite the defeat, Senator Scott Wiener signaled he may not be done with this proposal, telling Bloomberg to “stay tuned” as he considers next steps.

To read Bloomberg‘s full report, follow this link.

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