State attorneys general talk future tech cases in national conference

State attorneys general may soon play a larger role in the regulation of tech companies and digital industries, speakers discussed at the National Association of Attorneys General summit this week.

Iowa Attorney General Tom Miller, NAAG president, chose the topic for this week’s conference in Des Moines: consumer protection in the internet age. The officials heard from experts this week on issues from data privacy to cryptocurrency in preparation for future legal battles their states may take on.

One of the largest growing legal frontiers emphasized in discussions was the digital economy, as state and federal legislators work to create rules for both the businesses conducting commerce online, and the companies which own those online spaces.

‘We need states to be stronger’

Consumer Financial Protection Bureau director Rohit Chopra told AGs to expect more cases involving tech companies and online finance.

“The pandemic accelerated the digitization of our daily lives,” Chopra said. “… Every single sector is being transformed and offering new opportunities, but also a lot of questions.”

Many of those questions, Chopra said, are about how to best protect consumers as technology advances. He said AGs should see federal agencies like the CFPB as partners when it comes to these legal fights – but that federal enforcers sometimes lag where states can act quickly.

“We need states to be stronger,” he said.

He pointed to an antitrust case that 48 attorneys general filed in 2020 against Meta, then Facebook, which alleged the company stifles competition to protect its “monopoly power.” The case was dismissed in June 2021 when a federal judge argued the states waited too long to challenge the acquisition of Instagram and WhatsApp. The attorneys general appealed that decision this January.

Frances Haugen, a whistleblower who used to work for Facebook, spoke at the event. She had revealed internal research the company conducted which showed a correlation between the algorithms used and mental health problems in teenagers, especially among girls, on Instagram. Haugen, originally from Iowa, argued that the company could monitor existing algorithms and create new methods to help young people exhibiting at-risk behavior.

Miller joined the group of at least 11 state AGs conducting a probe into Meta following the document leak. State officials are investigating whether the data showed that Meta violated consumer protection laws and put the public at risk with the algorithms used to keep young people engaged on Instagram.

It’s not the only case of a tech company’s use of children’s data that came up at the conference. One panel discussed a federal lawsuit brought by the New Mexico Attorney General Hector Balderas against Google, which claimed the company collected data on New Mexico students and their families from educational products.

Google collected personal information from physical locations to browsing history to voice records, Balderas said in the lawsuit, in violation of the Children’s Online Privacy Protection Act. The law requires a parent’s consent before a company can collect personal details from a child under 13. The state settled the lawsuit in December, with Google agreeing to launch a privacy and online safety project for kids in New Mexico.

But data collection is not just a problem for children, Federal Trade Commissioner Alvaro Bedoya told conference attendees Tuesday. Vulnerable populations are at risk because of the lack of government oversight on data collection, he said. Domestic abuse survivors have faced threats because of geolocation data collected, Bedoya said, and fraudsters target people who do not speak English in online scams.

To help the people hurt most by these practices, the government needs to step up, Bedoya said. That means passing more legislation on data collection regulation in Washington and state capitals, he said, but also for state and federal enforcers to pursue more challenges.

“Algorithmic discrimination isn’t just about what’s under the hood,” Bedoya said. “It’s also about having the right mechanic—or simply having a mechanic, period.”