ENDING FORCED ARBITRATION IN SILICON VALLEY — Legislation passed by the Senate on Thursday that bans companies from forcing their employees to handle sexual misconduct cases in private will likely have a huge impact on the tech industry, which has a history of forcing arbitration over a slew of workplace discrimination issues. Vincent White, an employment discrimination attorney with White, Hilferty & Albanese, said that the major tech companies have been in "an arms race to weaponize non-disclosure agreements and forced arbitration provisions." The bill, called the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (S. 2342), now heads to Biden to be signed into law. — Tech's role: Major tech companies, including Facebook, Google and Microsoft, were some of the first to proactively ban forced arbitration clauses in 2017 and 2018 amid a wave of tech worker activism and the rise of the #MeToo movement, which shed new light on sexual harassment in the tech sector. Google spokesperson Jose Casteñeda confirmed to MT that Google does not force arbitration on any workplace misconduct issues. But those were voluntary pledges that lacked the backing of federal law. Even the California law to end forced arbitration, which passed in 2019 , was unenforceable because it was trumped by federal law. The big tech companies' bans on forced arbitration also did not extend to their armies of third-party contractors at companies like consulting firm Accenture, which now will have to end its forced arbitration policy as well. A slew of smaller companies in Silicon Valley — including many startups — continue to force arbitration in situations of alleged sexual misconduct, according to Myriam Gilles, professor at the Cardozo School of Law. "We're going to see a ton of emails go out in the next week indicating that this is now the law," she said. — Limits of the legislation: But advocates say the bill doesn't go far enough. "This bill only covers sexual assault and harassment," said Tanuja Gupta, a technologist at Google who has advocated for the legislation. "There are still so many issues — racial discrimination, wage theft, retaliation, pregnancy discrimination, all these things — that are not covered in this bill." For example, it will not protect Amazon's low-wage warehouse workers or Google's janitorial staffers if they want to report issues unrelated to sexual misconduct. Gilles said she's concerned that the bill leaves out "the people who are most deserving of judicial adjudication" in the tech industry and beyond. BILL PUTS MICROSCOPE ON SOCIAL MEDIA FEEDS: New bipartisan legislation from Senate Judiciary antitrust chair Amy Klobuchar (D-Minn.) and Sen. Cynthia Lummis (R-Wyo.) — spurred explicitly by Haugen's leaked research documents — would study the impact of push notifications and other tech-imposed "interventions" in stopping the spread of harmful content online. — Addressing virality: The Social Media NUDGE Act is one of the first bills to come out of the Senate Commerce Committee that directly addresses new issues raised by Haugen last fall. It may not be the last — Sens. Richard Blumenthal (D-Conn.) and Marsha Blackburn (R-Tenn.) are separately working on legislation to mandate algorithmic transparency. —More research: The bill directs the National Science Foundation and the National Academy of Sciences, Engineering, and Medicine to study the use of content-neutral interventions — think Twitter pop-ups prompting users to read an article before retweeting — as a way to reduce social media addiction or the spread of harmful content. It would also require the FTC to issue a rulemaking on how to apply the study's findings to tech platforms. — Not after Section 230: "We can build a healthier internet without the federal government dictating what people can and can't say," Lummis said in a Thursday statement. The legislation aims to address the spread of harmful content by algorithms, but would not impact Section 230, the tech industry's primary liability shield. It also would only apply to social media platforms with more than 20 million monthly U.S. users. ARIZONA APP STORE BILL ABRUPTLY COLLAPSES: The unexpected failure in the Arizona House of a bill that gave developers a way to avoid fees imposed by Apple and Google's app stores bodes poorly for state efforts elsewhere, as tech lobbyists move to undercut similar legislation in statehouses across the country. — Republican defects: Last year Arizona House Rep. Mark Finchem, a Republican, voted in favor of HB2005 , a bill meant to loosen Apple and Google's grip on the app ecosystem. (That bill passed the House, but soon after died in the state Senate). But on Wednesday, Finchem surprised his colleagues by voting "no" on HB 2662, substantively similar legislation that would've barred app store providers from exclusively preferencing their own app platforms or forcing users to utilize their payment systems. The legislation failed 4-5, meaning Finchem's vote would've been vital to the bill's passage. The GOP lawmaker told his colleagues on Wednesday the bill was a "ham-handed" attempt to insert the state government into what is "really a discussion between parties in a contract." — Silicon Valley fingerprints: Arizona House Rep. Regina Cobb, also a Republican, suggested Finchem had been flipped by tech industry lobbyists. "I am very disappointed to see some conservative members who voted for this bill last year buckle under pressure from big tech and change their vote," said Cobb, who was the primary sponsor of the bill. Receipts: Lobbying disclosure forms examined by MT show Finchem met for a $155 meal last February with lobbyists for Google (though that meeting took place before last year's vote on the app store bill that Finchem ultimately supported). A Google spokesperson declined to comment on the lobbyists' interactions with Finchem. Finchem spokesperson April Riggins said the state lawmaker "stands by his testimony" to colleagues on Wednesday. The Arizona bill's failure is an ominous sign for state efforts to rein in app store practices elsewhere. Legislative activity has been especially lively in Minnesota and Illinois, with bills in both states seeking to undercut Apple and Google's allegedly abusive behavior against app developers. Both companies are now spending heavily and building out teams of lobbyists in those states. Apple's won this way before: Legislation in Georgia targeting app stores fell apart last year under a sustained blitz from the tech giant. — Meanwhile in D.C.: The Open Markets App Act (S. 2710) , federal legislation with roughly the same aim as the state bills, was approved by the Senate Judiciary Committee last week. That legislation would preempt any state laws regulating app stores (and is also being fiercely contested by tech industry lobbyists). KLOBUCHAR SINGLES OUT GOOGLE IN HOT MIC MOMENT: Klobuchar — the driving force behind a suite of antitrust bills that, while not technically targeted toward the tech companies, would nonetheless have a massive impact on them — was caught Thursday on a hot mic referring to an unspecified piece of legislation as "the Google bill." "How's the Google bill going?" Klobuchar asked someone — possibly a staffer — during Thursday's markup of the EARN IT Act (S. 3538) in the Senate Judiciary Committee. While much of the conversation was muffled, MT could also make out the senator saying, "Does he want to get it done?" It's not clear what bill Klobuchar is referencing or who she was referring to. A spokesperson for her office declined to comment on the record, as did a spokesperson from Google. — Split caucus: Senate Democrats are already divided over the extent to which the antitrust bills single out individual companies. Californian Sens. Dianne Feinstein and Alex Padilla, as well as other Senate Democrats, have suggested Klobuchar's American Innovation and Choice Online Act (S. 2992) unfairly targets Google and a handful of other top tech companies, according to the Los Angeles Times. FIRST IN MT: SLATER JOINS ROKU — Roku has hired Gail Slater, currently a senior VP of policy and strategy at Fox Corp. and an alum of the Trump-era National Economic Council and the Internet Association, to fill its new position of VP of global government affairs, the company tells John. — The hire marks a big boost for the TV streaming giant, which has expanded its advocacy operations in recent months amid tech antitrust and media battles. As John reported in October , the company also brought on ex-NCTA executive Jared Sher as senior policy counsel. CORRECTION: A previous version of this newsletter misstated the status of Dimitri Kusnezov's nomination. His nomination advanced out of the Senate Homeland Security and Governmental Affairs Committee on Wednesday.
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