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How a wily Californian beat Google and Facebook's influence operation

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Amid a national reckoning over the perils of social media, a looming question has been whether — and
 
August 14 · Issue #186 · View online
The Interface
Amid a national reckoning over the perils of social media, a looming question has been whether — and how — the US government might respond. A series of hearings in Congress raised the specter of onerous new rules without ever quite convincing anyone that regulation was imminent. Amid deep partisan disagreements, the worst that Facebook, Google, and Twitter have had to contend with some sharply worded questions.
But all the way across the country, a different story was playing out. A single wealthy man, suddenly radicalized on the subject of data privacy, began consulting with experts in the hopes of crafting strong, state-level privacy protections. His name is Alistair Mactaggart, and he succeeded. Here’s how my colleague Colin Lecher described California’s new data privacy law at the time:
The California Consumer Privacy Act of 2018 is set to dramatically change how businesses handle data in the most populous state. Companies that store large amounts of personal information — including major players like Google and Facebook — will be required to disclose the types of data they collect, as well as allow consumers to opt out of having their data sold.
The legislation was a very-slightly-watered-down version of an initiative that Mactaggart planned to place on the ballot. Despite relatively little financing, the initiative received more than twice the required signatures and was polling favorably at the time the California legislature intervened.
Now, from Nicholas Confessore in The New York Times, we have the unlikely story of how the privacy act came about. It’s a very long read, well worth your time, that tells at least two stories. The first is about how Google and Facebook rose came to spend more on lobbyists than any other companies, developing deep ties to elected officials in both major parties, effectively insulating themselves from any regulation that would check their growth or revenue potential.
Facebook, a decade younger than Google, built its political apparatus twice as fast, as if observing a kind of Moore’s Law of influence-peddling. When it went public in 2012, the company had 900 million users — less than half its current size — and earned a relatively modest profit of $53 million. Over the next several years, Facebook simultaneously became one of the world’s biggest collectors of personal data and a powerful presence in Washington and beyond. It acquired Instagram, a rival social media platform, and the messaging service WhatsApp, bringing Facebook access to billions of photos and other user data, much of it from smartphones; formed partnerships with country’s leading third-party data brokers, such as Acxiom, to ingest huge quantities of commercial data; and began tracking what its users did on other websites. Smart exploitation of all that data allowed Facebook to target advertising better than almost anyone, and by 2015, the company was earning $4 billion a year from mobile advertising. Starting in 2011, Facebook doubled the amount of money it spent on lobbying in Washington, then doubled it again. The company employed just 10 lobbyists in state capitals around the country in 2012, according to my analysis of data collected by the National Institute on Money in Politics. By the time Mactaggart and Arney began work on their privacy initiative, it had 67. The tech industry was particularly powerful in California, its home base, where it doled out millions in campaign contributions to state candidates and parties.
But until recently, companies like Facebook and Google also had something that Wall Street and Big Oil and the cable companies didn’t. To many people in Washington, they were the good guys. Through the Obama years, the tech industry enjoyed extraordinary cachet in Washington, not only among Republicans but also among Democrats. Partnering with Silicon Valley allowed Democrats to position themselves as pro-business and forward-thinking. The tech industry was both an American economic success story and a political ally to Democrats on issues like immigration. Google enjoyed particularly close ties to the Obama administration: Dozens of Google alumni would serve in the White House or elsewhere in the administration, and by one estimate Google representatives visited the White House an average of about once a week. But the Obama world had relationships with other firms too. Facebook’s chief operating officer, Sheryl Sandberg, served on a high-level Obama advisory council on jobs and held a fund-raiser for Obama’s re-election campaign at her home in Atherton, Calif. The founders of Twitter, LinkedIn and the app developer Zynga together contributed more than $2 million to a pro-Obama super PAC.
It also tells the story of how Mactaggart used California’s initiative process to make an end run around their influence. Facebook and Google had teamed up to defeat an Obama-era privacy initiative, Confessore reports. Mactaggart benefited from increased skepticism about tech companies broadly, but he also got an unexpected gift this spring: the Cambridge Analytica data privacy scandal.
The Cambridge Analytica scandal engulfed Facebook, sending the company’s stock price plunging and setting in motion the worst crisis in the company’s history. Cambridge executives had long bragged about deploying powerful “psychographic” voter profiles to manipulate voters. Now Facebook was forced to acknowledge that Cambridge had used voters’ own Facebook data to do it. The damage was not only legal and political — Facebook faced lawsuits and new inquiries by regulators in Brussels, London and Washington — but also reputational. Silicon Valley’s public image had survived the Snowden revelations. But tech companies, already implicated in the spread of “fake news” and Russian interference in the 2016 election, were no longer the good guys. When Arney took one of his sons canvassing on the train, it was suddenly easy to get people to sign their ballot petition. “After the Cambridge Analytica scandal, all we had to say was ‘data privacy,’ ” he told me.
Before Cambridge Analytica, Facebook was a top donor to something called the Committee to Protect California Jobs, which tech company lobbyists had established to kill Mactaggart’s initiative. After Cambridge Analytica, Facebook announced it would no longer donate to the effort. And when it became clear that compromise legislation was the only thing to stop the initiative from going to the ballot, Facebook endorsed it.
It’s a twisty tale, artfully told. It’s also a heartening account of a time our democracy more or less worked — and could offer a roadmap for other states (or activists) looking to craft privacy regulations of their own. California’s privacy bill has its critics — Mike Masnick of TechDirt calls it “an unmitigated disaster.” But it’s also an account of how an outsider used the system, fairly, to overcome the influence peddling operation of the two best-funded players in the game.
Or, in the perfect formulation of privacy researcher Ashkan Soltani, who worked on the legislation: “Mactaggart had offered Silicon Valley a take-it-or-leave-it privacy policy — the same kind that Silicon Valley usually offered everyone else.”

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Launches
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Podcast tease
Wednesday is the season finale of Converge, and in this episode I chat with Intercom’s Eoghan McCabe. Among other things, we talk about why he’s still bullish on bots — but not on Facebook or WhatsApp. Check it out anywhere you find podcasts, including Apple PodcastsGoogle PodcastsPocket CastsStitcherOvercastSpotify, our RSS feed, and wherever fine podcasts are sold.
And finally ...
#Resistance Twitter Star Seth Abramson Wants to Turn His Threads Into a Book
Talk to me
Send me tips, comments, questions, draft legislation: casey@thevege.com.
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