Feds aren’t protecting you from tech giants, but Nevada could try

Image by Bethany Drouin from Pixabay

Unidentified hackers recently stole thousands of children’s private information from Clark County School District computers and we know little or nothing of how this happened. This theft of sensitive personal information raises questions as to the security vulnerabilities created by the five tech giants (Apple, Amazon, Facebook, Google, and Microsoft) and their hold over consumers’ data. 

While hackers are a serious threat, it’s time to reexamine how the monopolistic actions of the big five tech companies pose a severe threat to the market and consumers alike. Apple, Amazon, Facebook, Google, and Microsoft possess a sovereignty that discourages other firms from entering the market. This dominance concentrates an enormous amount of control in the hands of  five companies. These corporate giants are able to run roughshod over longstanding rights to privacy. In addition, companies like Amazon and Apple regularly create atmospheres of worker abuse in their facilities, with many well-documented instances of poor working conditions.

Lack of oversight and absent legal repercussions tech giants that hold massive amounts of data on consumers operate with impunity, answerable only to shareholders and, leading to less privacy, less individual security, and less workers’ rights. This is the case for workers and consumers all over the world, and now for  CCSD students. The dilemma will continue to grow with an increased reliance on online education and distance learning. 

Often we think nothing can be done, but in one state, legislators are fighting back. The California Consumer Privacy Act (CCPA) of 2018 requires corporations doing business in California to adhere to stringent privacy regulations, thoroughly transforming consumers’ relationships with internet-based firms. What’s remarkable is the ability of this bill to ensure that companies obey its provisions: all five tech giants are CCPA-compliant, and Google and Facebook both offer assistance for organizations using their services to follow the new regulation. In a survey taken three months before CCPA became law,  88 percent of businesses had plans to become CCPA-compliant. Not bad for a regulation that only applies for Californians, who make up just 12 percent of the U.S. population.

However, that’s precisely why the CCPA has been so effective. That 12 percent of the U.S. population is a massive fraction of the global tech market. California’s 39 million people generate so much revenue that tech companies cannot afford to ignore them. Combined with the fact that many tech companies are headquartered in California, California’s state Legislature has a regulatory power that carries almost the same weight as Congress. When it speaks, big tech listens.

The successes of the CCPA should not be confined solely to data protection. The new law addresses a symptom of a deeper concern in the tech sector: monopolization. Tech giants provide only a handful of basic services to us: searching the internet, providing social networks, online retail, and computer manufacturing. All of these can be reconfigured by state legislators through offering public options that complement regional economies. 

For instance, while companies like Amazon make it easier to order goods online, it’s also contributed to the destruction of traditional handicrafts by making alternatives so much easier to obtain. The cultural heritage of the Southwest, and many other areas, has been almost irreparably damaged. According to a report by the Institute for Local Self-Reliance, “by the end of 2015, Amazon’s growth had displaced enough sales at brick-and-mortar stores to cause about 135 million square feet of retail vacancy,” driving scores of corner shops, bookstores, and other local pillars of the community out of business.

By contrast, an online shop operated by a publicly-owned organization could ameliorate this, by prioritizing local small businesses to shoppers. A New Mexico resident using the State of New Mexico’s online store could market handmade products (perhaps even subsidized by the state to make them more affordable) before big-box alternatives are displayed to consumers.

Another way technology could benefit local economies would be to bring manufacturing jobs to the Mountain West states where land is plentiful and tax incentives are available. Computer manufacturing provides the potential for reliable jobs. Offering locally made computers to small tech businesses would create partnerships within local communities and potentially spur a tech revolution in the Mountain West. This localization of e-commerce and other internet services would result in an economic boost for everyday people, and states in general, as money formerly sent out-of-state returns to the local communities. 

This is another application of the innovative spirit of Internet entrepreneurship, where everyone’s idea has the ability to contribute to the marketplace, and not be overwhelmed by monopolies.

These reforms are not pipedreams; they are absolutely possible. Data protection without Congressional action, after all, was merely a pipedream until California stepped up and took action. 

It is a fair point to consider the implications if the costs to big tech companies exceed the benefits gained by remaining in these markets. What happens if big tech decides not to comply or to leave California entirely? The solution is not surrender; instead, other states should up the stakes.

California represents 39 million citizens. However, the entire Southwest (and beyond) has significant economic ties to the Golden State, as seen during the current COVID-19 crisis. Five states (California, Colorado, Nevada, Oregon, and Washington) banded together in the Western States Pact (WSP) to coordinate pandemic responses, because of their interconnected economies. The WSP represents more than 60 million people, comprising the entire West Coast and some of the most innovative regions in the U.S., and provides an already-existing framework for implementing tech reform initiatives. Its massive bargaining power transforms adherence to these regulations from a highly-favorable option to a virtual necessity to operate in the U.S. More states could join this new “fair tech coalition” when they see its economic benefits.

If Congress refuses to take action to reform the 21st century’s most important economic sector, that role falls to the states. It is time for Nevada’s Legislature to revolutionize tech and build a fairer, more competitive, and sustainable system, blazing a digital trail for the rest of the nation to follow.

Eshaan Vakil
Eshaan Vakil is a researcher working at Brookings Mountain West and the Lincy Institute at UNLV.
Katie Gilbertson
Katie Gilbertson is a researcher working at Brookings Mountain West and the Lincy Institute at UNLV.