A group of people, largely obscured by voting booths, assemble voting booths in a large room.
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The (other) tech midterm races to watch

Protocol Policy

Hello and welcome to Protocol Policy! Today, we recap the midterms items tech leaders should be paying attention to across states. Also, the future of the Consumer Financial Protection Bureau is in peril and the Biden administration is scrutinizing Elon Musk’s foreign ties.

State by state

The midterms are less than a month away, and while all eyes are on major congressional races, lots of other items up and down the ticket could have a big impact on tech. In states across the country, ballot measures will determine the future of everything from EV funding to how gig work works, with some policies kicking in as soon as January if they win voter approval.

Here are a few of the items smart tech leaders should be watching.

California: Proposition 30 would impose a new 1.75% tax on Californians with more than $2 million in annual income to finance climate initiatives and fight wildfires.

  • Why it matters to tech: The tax is expected to generate up to $5 billion annually, with the majority of the funds going toward California’s ambitious electric vehicle plans. About 45% of the money would be spent on rebates for individuals, businesses, and local governments that buy electric vehicles and 35% on expanding the EV charging network in the state.
  • Who’s backing it: By far the biggest backer is Lyft, which has bankrolled the yes vote to the tune of $45 million, according to state filings. Company CEO Logan Green has said the tax is needed “to help turn back the clock on this existential threat” of climate change.
  • Who’s against it: While the measure is backed by Democrats, Gov. Gavin Newsom has broken from his party, describing Prop. 30 as a “Trojan horse” initiative devised by Lyft “to funnel state income taxes to benefit their company.”

Illinois: Amendment 1 would amend the state’s constitution to include an explicit provision that employees have the right to organize and collectively bargain over wages, hours, and working conditions.

  • Why it matters to tech: The amendment would guarantee workers the right to organize at a time when tech workers appear particularly keen to do so. Chicago is also a major tech hub, with nearly a fifth of the city’s overall workforce employed in the sector.
  • Who’s backing it: The amendment is backed by workers’ rights organizations, unions in Illinois, and Gov. J.B. Pritzker.
  • Who’s against it: The Illinois Chamber of Commerce, of course. “It sends a signal that we are not serious about becoming a pro-business state,” organization president Todd Maisch told local station WGEM.

Washington: Advisory 40 is a nonbinding vote on HB 2076, which the state legislature has already passed. The bill sets a per-trip pay floor for Uber and Lyft drivers, gives drivers paid sick leave, and prohibits surge pricing during the first seven days of an emergency (as declared by the governor or the president).

  • Why it matters to tech: Technically, HB 2076 has already passed. But because the bill levies a premium on rides in Washington, state law also requires that voters get a chance to have their say. Their vote won’t definitively determine the fate of the legislation, but will act as guidance to the legislature as to whether it should repeal or uphold the law.
  • Who’s backing it: When the state House was debating the bill, it received support from both Uber and Lyft. Local Democrats hailed it as the “best in the nation” package for app drivers.
  • Who’s against it: The National Employment Law Project said HB 2076 doesn’t do enough to protect the rights of drivers.

Montana: Constitutional Amendment 48 would amend Montana’s constitution to explicitly require law enforcement agencies secure a search warrant before accessing individuals’ electronic data.

  • Why it matters to tech: It would be a big win for privacy rights in the state.
  • Who’s backing it: The amendment has support from conservative groups such as Americans for Prosperity Montana.
  • Who’s against it: There are no active campaigns opposing the ballot measure, but some Montana House Democrats voted against the Senate bill that produced the measure. The Montana Association of Chiefs of Police also opposed it, but is not campaigning to block it.

Of course, no list would be complete without mentioning the Peter Thiel-backed Arizona and Ohio Senate races, where Blake Masters and J.D. Vance, respectively, are vying for the title of Big Tech’s biggest adversary in Washington. So far, Vance’s chances are looking better than Masters’.

Then there’s the gubernatorial race between Beto O’Rourke and Gov. Greg Abbott in Texas. So far, tech money seems to be mostly flowing to O’Rourke. Wonder why?

— Kwasi Gyamfi Asiedu (email)

A version of this story first appeared on Protocol.com. Read it here.

In Washington

Funding for the Consumer Financial Protection Bureau is in peril after the 5th Circuit Court of Appeals ruled against it in a court case. The Federal Reserve currently funds the CFPB, which critics say limits the oversight Congress has over it. Sen. Elizabeth Warren decried the decision as coming from “extreme right-wing judges.”

The Biden administration is considering upped national security reviews for Elon Musk, according to Bloomberg. Officials reportedly consider his tweet promoting Ukraine peace negotiations as being Russia-friendly. The Twitter deal could be targeted for review since it involves foreign investors, including Prince Alwaleed bin Talal of Saudi Arabia, and a Binance-affiliated investment arm.

The Pentagon is expected to rely further on SpaceX over the years, despite the Starlink funding dispute.

In the states

The Texas attorney general sued Alphabet over its alleged “indiscriminate” collection of biometric data. The AG said Google collects and stores facial-recognition data without users’ consent. A Google spokesperson responded that the AG is mischaracterizing the Google Photos product feature.

On Protocol

Microsoft confirmed a customer data leak. Cybersecurity vendor SOCRadar reported the leak, which resulted from a server misconfiguration. SOCRadar claims the leak affected 65,000 companies across 111 countries — but Microsoft disputes those figures, and said it was “disappointed that SOCRadar exaggerated the numbers involved in this issue even after we highlighted their error.”

Parler’s COO told Protocol the Ye deal could close before the end of the year. Interest in the company has also grown since the announcement: He said Parler had seen four times as many new users sign up between Monday and Wednesday as it did the entire preceding month.

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Around the world

A lawsuit brought by British consumers seeks around $1 billion from Amazon over the company’s use of its “secretive” algorithm to promote its own products on the site through the “Buy Box” button.

EU officials believe banning crypto mining in member states could help alleviate the energy crisis. The EU wants to cut gas use by at least 15% through March.

Russia and China are more likely to conduct a major cyberattack against the U.S. and Western Europe,according to CrowdStrike co-founder and former CTO Dmitri Alperovitch.

In data

75%: In pitching investors on his Twitter takeover, Elon Musk said he planned to axe almost 75% of the company’s 7,500 employees, The Washington Post reported.

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Web3 is going just great

Protocol’s Benjamin Pimentel spoke with Molly White, creator of the blog Web3 is going just great, which, as you might guess, is about how Web3 is not going just great. White took issue with Web3 proponents likening their technology to the internet, excluding the possibility it could end up being more like 3D TVs. “You can say that any technology is like the internet and you should just stop being skeptical of it, and everyone should get on board and you don't want to be laughed at in the future for saying it has no promise,” White said.

Thanks for reading — see you Monday!

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