Why Silicon Valley Tech Giants Oppose CA Internet Privacy Bill

Internet Privacy Bill Credit: Digital Trends[/caption]

Last week, IVN reported on California’s most recent push towards online privacy: Assemblymember Bonnie Lowenthal’s Right to Know Act of 2013 (AB 1291). Intended to give Internet users more insight into the collection and storage of their data by large companies online, the law would be the first of its kind in the United States.

Its novelty, however, has Silicon Valley giants worried, prompting them to join forces in their quiet, yet forceful, fight against the Internet privacy bill.

Signed by 15 companies and trade groups, an open letter opposing the Internet privacy bill was sent to the members of the Assembly Judiciary Committee, outlining the reasons for the coalition’s opposition of AB 1291.

Calling the legislation “unworkable,” the case against Lowenthal’s Internet privacy bill can be broken down into three main arguments:

  1. It is unworkable
  2. It rests upon mistaken assumptions about the Internet
  3. It costs too much.

The bill makes it necessary for companies to provide consumers with access to the range of information stored by that company. This would require a personalized or standardized format, a task made impossible by the nature of the Internet, the letter continues.

Businesses would be incapable of providing personalized information because user information is not identifiable from an IP address or device identifier, both of which are linked to a router, not an individual.

Furthermore, the letter articulates the risk of unfair competition lawsuits, the type of lawsuits Proposition 64 was designed to prevent:

“It not only imposes unworkably broad new regulations, it would then allow a lawsuit for any technical violation. This is a recipe for abusive and costly lawsuits that may benefit the trial bar, but harm businesses operating in California.”

Given the nature of the law, it was only a matter of time before Silicon Valley companies, who are wholly invested in the collection of information online, opposed the Internet privacy bill. Facebook, for instance, has become the largest social network in the world while maintaining its services free of charge.

What is not often considered, however, is the value of personal information, which was price-tagged last year at $1.21 per person, per quarter.

With that information readily and lawfully available to the public, Facebook has a lot to lose. More specifically, it has around 5 billion dollars worth of information that could potentially be lost per year.

Facebook is not the only company vying to hold on to user information. Among those openly opposing the bill are the California Chamber of Commerce, American Insurance Association, California Bankers Association, NetChocice, TechNet, and TechAmerica, which represents both Google and Facebook, two of the largest data-collecting companies in the Silicon Valley.

Representing the district home of both Facebook and Google, Menlo Park Assemblyman Rich Gordon has yet to take a stand on the bill, hoping to find a compromise where privacy is protected ,”but you don’t completely shut off Internet commerce.”

The bill will be considered by the Assembly Judiciary Committee on May 7, delaying the initial review due to a lack of guidelines.

Letter Opposing AB 1291 by Ars Technica