Big Tech’s “Digital Trade” Agenda Threatens States' Tech Policy Goals

Interactive State Policy Tracker

Nationwide, state legislators have introduced bills to protect people from biased artificial intelligence (AI) models, online privacy violations, abuses of children and teens’ data, and anti-competitive practices by tech companies—and to guarantee our right to repair our phones, cars and other equipment. 

The surge in statehouse tech legislation shows that the American people—and their elected officials at every level—want action now. But few people realize that the very firms whose conduct led to this bipartisan response have a strategy to undermine tech regulation through a stealthy form of international preemption. They want to add rules to international trade deals that limit how state and federal governments can regulate tech.

The most extreme of what these interests misleadingly call “digital trade” rules would:

  • limit governments’ powers to require impact assessments, bias audits, or pre-deployment testing of even high-risk AI and other programs if this involves government regulators or independent reviewers having access to detailed descriptions of algorithms or to source code;
  • forbid right to repair polices that require manufacturers to share repair tools that depend on access to code or algorithms;
  • ban regulation of international data transfers, guaranteeing rights for firms to choose where our personal data moves and is stored; and
  • prohibit requirements to keep certain data locally stored, for instance to keep sensitive data within the state for privacy or any other reason.

To learn more about the “digital trade” agenda, read our International Preemption by “Trade” Agreement report.

State lawmakers’ initiatives to regulate the tech industry must not be thwarted by “digital trade” rules being pushed by Big Tech firms. We must ensure that state and federal tech bills—including some measures already signed into law—are not undermined by this international preemption plot.

The interactive maps and database below show how “digital trade” provisions may conflict with bills introduced in 42 states and Washington, DC, relating to AI regulation, data privacy, kids’ online safety, and the right to repair.

AI Regulation Policies Would be Thwarted by Algorithm and Source Code Secrecy Guarantees

To try to avoid civil rights and liberties violations and other harms from AI systems being rushed into use, legislators are introducing bills in statehouses nationwide that require impact assessments, bias audits, or pre-deployment testing to ensure that AI models are fair and accurate. The Big Tech-demanded “digital trade” rule that bans access to source code and algorithms would forbid such reviews from being conducted by or available to government regulators or independent bodies, as many bills require.

If the “digital trade” rules Big Tech seeks were widely enacted, requirements for AI developers to make available algorithmic information to deployers, mandates to conduct external bias audits, or regulatory disclosure requirements for high-risk AI systems could be attacked as a violation of the “digital trade” special secrecy guarantees forbidding disclosure of even detailed descriptions of algorithms.

In total, 39 AI regulation policies introduced since 2021 could be threatened by source code and algorithm secrecy rules; six of these policies have already been signed into law.

Click on the states highlighted on the right to see their AI regulations legislation.

Kids’ Online Safety Regulation Is Under Threat by Algorithm and Source Code Secrecy

Source code and algorithms are not AI-specific terms. They are also at the heart of social media, another type of software subject to state-level regulation. If the “digital trade” rules Big Tech seeks were widely enacted, the same “digital trade” secrecy guarantees that forbid regulators’ access to algorithmic information would undermine bills meant to protect children from harmful social media models. 

Some bills aimed at addressing social media’s part in the youth mental health crisis impose requirements for software design and government or independent audits of source code and algorithm. Companies could argue that these laws require them to disclose their algorithms in violation of algorithm and source code secrecy rules.

Since 2021, six bills have been introduced with social media algorithm transparency requirements that may be at risk of “digital trade” legal challenges. Three of these policies have been signed into law by their state governors.

Click on the states highlighted on the left to see their kids’ online safety regulations.

Right to Repair Laws Could Be Obstructed by Algorithm and Source Code Secrecy Rules

The “digital trade” source code secrecy guarantees wouldn’t just shield AI and social media companies from government oversight: they also would undermine market competition and consumers’ rights to access the repair tools and information to keep their phones, cars, and other equipment operating.

Right to Repair laws that require manufacturers to make available to consumers and independent repair shops the tools, parts, and information necessary to repair electronic products could be undermined by algorithm and source code secrecy rules since the broad definition of algorithms would encompass repair tools such as diagnosis software, firmware, and digital keys.

In the last three years, state lawmakers have introduced 60 right to repair policies that could be threatened by source code and algorithm secrecy rules; eight of these policies have already been signed into law.

Click on the states highlighted on the right to see their Right to Repair legislation.

Data Privacy Legislation Is Undercut by Trade Rules Banning Cross-Border Data Transfer Regulation

Consumers and regulators have many new concerns about data privacy as AI systems have proliferated in all sectors of the economy. State bills aimed at preserving privacy have gained ground in recent years, including measures meant to limit the sharing of personal information with business and government entities in other states or nations.

Big Tech’s favored “digital trade” rules could undermine legal limits on the transfer of personal information due to the “digital trade” ban on regulation of cross-border data flows and local storage requirements.

Three data privacy policies already signed into law could be threatened by rules relating to cross-border data flows.

Click on the states highlighted on the left to see their data privacy legislation.

 

The good news is that very few of the hundreds of trade agreements now in effect worldwide include Big Tech’s “digital trade” rules. The bad news is that Big Tech lobbyists are using their power and money to try to rig numerous trade deals that are being negotiated right now to derail the wave of tech regulation underway nationwide.

Explore the database below to learn more about state-specific legislation in the areas of AI regulation, data privacy, kids’ online safety, and right to repair that may be undermined if Big Tech’s “digital trade” agenda is widely enacted.

Generated by wpDataTables

Methodological Notes:

  • The tracker only includes policies that could reasonably collide with the extreme digital trade rules included in certain trade agreements, particularly chapter 19 of the United States-Mexico-Canada Agreement (USMCA). Therefore, there are many state policies related to emerging technologies or social media that are not included in the tracker. While many tech policy bills have not been completely applied and enforced, new conflicts could arise when these policies are fully operational.
  • The tracker only includes policies at the state level. However, local policies, such as New York City’s Local Law 144 of 2021 on Automated Employment Decision Tools, could be challenged under “digital trade” rules that require source code and algorithm secrecy.
  • This tracker only includes bills introduced since 2021 or enacted into law if introduced earlier. Bill information including year of introduction, number, name, status, and text is based on state legislature website information as of June 30, 2024.
  • When more than one bill addressing the same issue with a similar policy solution has been proposed in a state, we only included the bill that advanced farther in the legislative process, the bill that more clearly conflicts with digital trade proposals, and/or the bill that was introduced in the most recent legislative session.
  • Bills were compiled using state legislature websites and the following resources:
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