Amazon, Microsoft, and Uber are paying big money to kill a California privacy initiative

Amazon, Microsoft, and Uber are paying big money to kill a California privacy initiative

June 15, 2018 0 By Nazmul Khan


As data-sharing scandals continue to mount, a new proposal in California offers a potential solution: the California Consumer Privacy Act would require companies to disclose the types of information they collect, like data used to target ads, and allow the public to opt out of having their information sold. Now, some of tech’s most prominent companies are pouring millions of dollars into an effort to to kill the proposal.

In recent weeks, Amazon, Microsoft, and Uber have all made substantial contributions to a group campaigning against the initiative, according to state disclosure records. The $195,000 contributions from Amazon and Microsoft, as well as $50,000 from Uber, are only the latest: Facebook, Google, AT&T, and Verizon have each contributed $200,000 to block the measure, while other telecom and advertising groups have also poured money into the opposition group. After Mark Zuckerberg was grilled on privacy during congressional hearings, Facebook said it would no longer support the group. Google did not back down, and the more recent contributions suggest other companies will continue fighting the measure.

The campaign to pass the California Consumer Privacy Act is almost wholly funded by Bay Area real estate developer Alastair Mactaggart. To date, Mactaggart has spent more than $3 million on the campaign. He argues that, in the personal data industry, “there’s so much money, and there are very powerful corporations that really have an immense interest in keeping business as usual going and having no regulations.” He started working on the initiative about four years ago, after hearing a Google engineer say the public would be frightened to learn how much data the company holds on consumers.

Big Tech’s latest resistance to the proposal comes during a key moment. The initiative recently submitted 600,000 unverified signatures to qualify for a place on the November ballot. The state is currently sorting through those signatures to determine whether there are 366,000 legitimate ones, the required threshold for a ballot spot. Mactaggart says the measure is polling well, and he expects the constant drip of data-sharing scandals to further buoy the effort.

In a statement, a spokesperson for the tech industry-aligned group the Committee to Protect California Jobs called the measure “flawed” and said it’s not only the tech industry that opposes the plan. “Credit unions, grocers, and car manufacturers are among the many recent additions to the coalition and are the top of the iceberg,” the spokesperson said.

But tech companies have been the most visible antagonists and have cast the proposal as anywhere from frustrating to an existential threat to their business models. “Protecting people’s information is critical to maintaining customer trust — a principle Amazon was built on,” a spokesperson for the company said. “While we share the initiative’s overarching goal of protecting consumer privacy, we are concerned by unworkable requirements that would hinder our ability to innovate on behalf of our customers. We look forward to working with policymakers to find a solution that allows us to do both.”

Mactaggart says he and his campaign “completely reject” the idea that the measure would radically damage business interests, and he says business models like targeted advertising would still be workable.

Earlier this week, the supporters of the initiative slammed Microsoft for its contribution, accusing the company of hypocritically supporting Europe’s GDPR protections while funding opposition to related efforts in California. In a statement, the company defended the contribution.

“Microsoft believes privacy is a fundamental human right,” a spokesperson said. “That’s why we are strong supporters of GDPR, Europe’s new privacy regulation, and why we made the commitment to extend the rights at the heart of GDPR to all of our customers worldwide. It’s why we have also advocated for national privacy legislation in the U.S. since 2005. We believe the California measure could have unintended consequences for both businesses and consumers and that there is a better way to give consumers the privacy rights they deserve.”

Meanwhile, supporters of the proposal are waiting to hear whether they make the ballot and are challenging tech companies to stop funding the countermeasure. “If your commitment to your customers’ privacy is as strong as you say it is, please,” Mactaggart wrote in the Microsoft letter this week, “prove it.”



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