Why Legislators Target California’s High-Tech Innovators

The California Assembly will soon consider proposals to “protect” residents from two of Silicon Valley’s most successful innovators. Google and Facebook help form the backbone of the state’s high-tech economy, but some lawmakers see them as a threat to privacy and security.

AB 255 would censor Google’s popular online mapping services to remove or blur photographs of schools, churches, hospitals, or government buildings. According to Assemblyman Joel Anderson (R-El Cajon), these detailed photographs could assist terrorists in plotting attacks. While any technological advance could potentially be misused for criminal purposes, AB 255 singles out Google for special treatment. Anderson contends that “there are no other uses for knowing on a map” the structural details of a building.

Google earned more than $20 billion in 2008 by offering applications that a broad range of consumers demand and enjoy. This includes mapping and satellite imagery tools. According to the California Association of Realtors, 72 percent of home buyers today rely heavily on such tools. If lawmakers censor Google, they could thwart other creative uses of these technologies. Interfering with rapidly evolving business models can also have severe unintended consequences.

If Google fails to identify and blur every applicable building, AB 255 prescribes fines of $250,000 per day, and even threatens jail time for company executives and board members. The enormous costs of compliance could force Google to black out California altogether, and may deter new startups from entering the market. This would needlessly deprive consumers and send high-tech investors, entrepreneurs, and jobs out of state.

The second bill, AB 632, limits sharing of information on social networking sites such as Palo Alto-based Facebook. More than 175 million people have voluntarily joined Facebook since it was founded in 2004, creating a vast online community that rivals the sixth-largest country in the world. The site’s success hinges on providing a platform for users to interact freely and openly. Members can join or leave with the click of a button, and all rules are determined democratically, but Assemblyman Mike Davis (D-Los Angeles) believes users need protection from so much freedom.

According to Davis’ proposal, nobody can share a photo on Facebook unless the site first obtains permission from the source. Not only does AB 632 defeat the purpose of social networking, but it imposes an absurd level of privacy that doesn’t exist in the real world. If someone sends a holiday card or birth announcement, for instance, they cannot expect mail carriers to obtain permission from the sender before recipients share these photos. If such a requirement would never make sense for UPS or FedEx, why should it apply to Facebook? People share photos through these services because they want those photos to be shared.

Ironically, AB 632 would actually decrease privacy on social networking sites. In order to comply, companies would first need to verify which users are physically located in California. This requires collecting and storing additional personal information about every customer that could be released in the event of a data breach, or handed to the government in response to a subpoena.

It is understandable for lawmakers to have concerns over new technologies, but standing in the way of innovation only harms constituents. In 2004, for example, California Sen. Liz Figueroa introduced legislation to ban Gmail, Google’s web-based email service. The bill failed, and more than 90 million customers have since determined that the benefits of this product far outweigh any privacy concerns.

AB 255 and AB 632 target two of California’s most prosperous technology firms, which have created more than 10,000 jobs in less than a decade. The Committee on Arts, Entertainment, Sports, Tourism, and Internet Media should quickly reject these proposals, or risk killing the Google that lays the golden egg. The legislature can best ensure privacy and security by embracing the flow of information, not restricting it. This will promote savvy consumers, informed citizens, and the prosperous high-tech economy California needs.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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