The Big Story

The four propositions you need to know

Issie Lapowsky writes: There are four measures on the ballot in California this year that could have outsized impact on the tech industry. Obviously, California is tech's center of command, but in many cases the rest of the country (and the world) is watching to see how these measures do. As California goes, so goes the country.

If you're still deciding how to vote, this is your explainer. And if you've already voted or don't live in California, this is why they matter and what you should be watching for.

Proposition 15 would change a decades-old property tax loophole in California called Proposition 13, which allows landowners to pay taxes on the purchase price of their property, not what it's currently worth.

• The proposition would carve commercial properties out of that loophole, requiring them to pay taxes on the current market value of their real estate, creating a cash windfall of up to $12.5 billion for local schools and local communities. Small businesses and farmland would be exempt from the new requirements.
• Some of the measure's highest-profile backers are billionaire techies like Mark Zuckerberg, Marc Benioff, Dustin Moskovitz and Irwin Jacobs, who have joined with teachers' unions and most mayors in the state to support Proposition 15.
• The opposition, meanwhile, includes business groups like the California Chamber of Commerce and agricultural organizations that say while farmland may be excluded, taxes on "fixtures and improvements" will go up.

Proposition 22 would make app-based drivers exempt from AB 5, the new California law that requires some contract workers to be reclassified as employees. Proposition 22 would classify drivers as independent contractors, but would set a new earnings floor, limit their hours and provide healthcare subsidies to anyone working an average of 25 hours a week per quarter.

• No surprise, the measure is backed by the state's top gig worker companies, including Uber, Lyft, DoorDash, Instacart and Postmates. Those companies have argued that AB 5 would crush their businesses, and Uber and Lyft even vaguely threatened to shut down in California over the summer following a loss in court.
• The opposition, including a slew of civil rights and labor groups, as well as Democratic presidential nominee Joe Biden, argues that Proposition 22 will allow wealthy tech companies to exploit workers for profit and deprive them of benefits like paid sick leave and unemployment insurance.

Proposition 24 has pitted groups that are typically on the same side of the privacy debate against one another. It was written by real estate mogul Alastair Mactaggart, the same guy who wrote the 2018 ballot initiative that formed the basis of the California Consumer Protection Act. Proposition 24 would rewrite CCPA in ways that Mactaggart says improve Californians' privacy rights by allowing people to force businesses to limit the use of their sensitive data, by tripling fines for misuse of children's data and by creating an enforcement agency to oversee privacy violations, among other things.

• It's been endorsed by a broad array of civil society groups and privacy experts. But it's been panned by a lot of them too.
• One Proposition 24 opponent is Mary Stone Ross, Mactaggart's co-author on the 2018 ballot initiative. She, along with groups like ACLU California, Color of Change and the Consumer Federation of California, argues that Proposition 24 creates new loopholes for businesses, including provisions that would allow companies to charge people more money for opting out of having their data sold. Opponents of Proposition 24 call this provision "pay-for-privacy."

Proposition 25 wouldn't have a direct impact on tech companies, but it would dramatically expand the use of technology to make major decisions in Californians' lives. Proposition 25 would replace the state's current cash bail system with an algorithm that determines whether people are low risk offenders who should be released from jail pre-trial. The measure would uphold a 2018 law that sought to do away with bail, so poor people were no longer stuck in jail simply because they couldn't afford to buy their way out.

• But the proposal has split progressive groups. While the California Democratic Party and some teacher and trade unions have come out in support of the measure, groups like the ACLU and the NAACP have joined the bail bond industry in opposing Proposition 25.
• The opposition argues that black box algorithms shouldn't get to make such critical life decisions. Perhaps unsurprisingly, tech leaders including Steve Ballmer and his wife Connie as well as Reed Hastings' wife Patty Quillin have funded the campaign to pass Proposition 25.

We'd love to hear what you're thinking about these propositions, which other ones you're paying attention to tomorrow, and what you think comes next for all four. You can reply to this email, or send a note to issie@protocol.com.

People Are Talking

On Protocol: Why don't tech's richest donate more to campaigns? Damage control, one fundraiser said:

• "There are a large number of uber-wealthy people who just don't want to get hit. For them to have such large checks under their name would put their companies needlessly in harm's way by the Republicans. There's no point."

You know who's not stressed about the election? Bitcoin bulls, Arca's Jeff Dorman said:

• "I would say Democrats are better for inflation hedges, but as long as there's a clear winner at some point, everything's going higher."

After it was reported that Google Cloud works with U.S. Customs and Border Protection on virtual border walls, Google's Thomas Kurian told staff that's not so:

• "The testing that they are doing might include systems to help with customer fraud, to detect drug trafficking, and scanning and translating travel documents … any custom work would have to go through our AI principles review."

The post-COVID commuter lifestyle involves a cheap house in the 'burbs and a chopper to work, Blade's Rob Wiesenthal said:

• "We know people who were paying $3,500 a month for a studio apartment, now paying $1,200 sharing a house with two people in the Hudson Valley. They're renting things that are less expensive, and that's enabling them to fly."

READ NOW

Today's online marketplaces gather millions of sellers, hundreds of millions of buyers, and generate billions of dollars in economic benefits. Specifically, the Connected Commerce Council (3C) research shows that the value marketplaces bring to small and medium-sized businesses exceeds $145 billion annually. Read more on why we should celebrate the benefits of digital tools and the businesses using them.

Read more here.

Coming Up

Oh, not much. Just kidding, it's election week in the U.S. and everything feels like pure chaos! Hope you're staying sane, breathing and not refreshing the 538 tracker too often.

Meanwhile, earnings season rolls on: Uber, Alibaba, Qualcomm, Roku, Square, Dropbox, Cloudflare and others all report this week. It's going to be a volatile one on the markets, I think.

Ant Group is scheduled to list on Thursday. It's set to be the biggest IPO ever, raising almost $37 billion.

In Other News

• Facebook employees say it's given conservative accounts preferential treatment, according to The Washington Post. One person claimed that Facebook's public policy team considered ensuring that 50% of harmful posts escalated to further action should be liberal. Meanwhile, BuzzFeed reports that Facebook temporarily suspended political group recommendations.
• Huawei plans to build a chip plant that doesn't use U.S. technology, the Financial Times reports. Initially, it would only produce low-end 45 nanometer chips, but it reportedly hopes to make 28nm ones by the end of next year.
• Tech companies are mad about the new H-1B visa rules. Apple, Google and Facebook were among companies that filed an amicus brief to block the changes. Startups are also annoyed: VC Kate Mitchell said the new rules make hiring from abroad "prohibitive."
• A judge blocked the Commerce Department from banning TikTok. The Commerce Department said it would comply — while adding that it would "vigorously defend" the executive order.
• Margrethe Vestager doesn't want to break up Big Tech. The European Competition Commissioner said "it will never come to that."
• On Protocol: Wonder what it's like to do a SPAC? We spoke to founders, investors, and sponsors who have all been involved in 2020's hottest trend to find out.
• Twitter might be thinking about buying Substack, The New York Times reported. Co-founder Hamish McKenzie's response: "This is not going to happen."
• On Protocol: Tech workers are experimenting with algorithmic day trading. Online communities are growing fast, as the hobby picks up steam. But making sure people know what they're doing is easier said than done.

One More Thing

AI watches sports a little differently

I'm sure it seemed like such a good idea at the time: Just train an AI-powered camera to follow the ball through a soccer match so you don't need a human behind the viewfinder! What could go wrong? Well, turns out one very bald referee brought the whole system to its virtual knees, and the robot takeover was postponed at least one more day.