The Big Story: California’s new privacy law. This week, California lawmakers passed—and Governor Jerry Brown signed into law—a sweeping new online privacy law that will dramatically increase burdens and legal risks for startups with users in California.
The law is a modified version of a ballot initiative that was supposed to be in front of California voters this coming November. Engine opposed the ballot initiative, which was written and funded by real estate developer Alastair Mactaggart to the tune of more than $3 million. As we explained earlier this year, “the measure would significantly limit the kinds of innovative goods and services that startups can offer Internet users in California and would open startups up to significant legal liability and the risk of huge fines if they suffer a data breach.”
While lawmakers made some changes to the initiative, the final language in the law is the result of a deal struck behind closed doors with little to no input from stakeholders and no real consideration for the impact it will have on small startups. The law creates costly, regulatory burdens that will disproportionately harm the companies that anchor California’s startup ecosystem while enshrining incumbents’ market power, since large, well-funded companies are the only ones that can afford to navigate and survive challenges under these rules.
Policy Roundup:
Travel ban stands. The Supreme Court upheld the Trump administration’s executive order that kept individuals from several Muslim-majority countries from entering the U.S. Engine joined more than 200 startups and investors in opposing the ban last year.
“Startup Visa” comments close. This week, Engine filed comments with the Department of Homeland Security on the proposed removal of the International Entrepreneur Rule. We believe the IER is vital to maintaining the U.S.’s reputation as a leading innovation economy and strongly oppose its removal.
Europe’s copyright battle continues. Article 13 passed the first parliamentary vote last week, but European policymakers will be making their final decision on July 5th. Organizations across Europe and the U.S. are fighting to ensure it doesn’t pass in what would be a hugely detrimental reform for Internet platforms.
Apple and Samsung truce. After seven years of litigation, Apple and Samsung settled their long running patent dispute over allegations that Samsung violated Apple’s patents by copying the iPhone design.
Foreign investment review. The House this week passed a bill to broaden the role of a panel tasked with reviewing foreign investments in U.S. companies, sparking concerns that reviews could discourage investment in emerging technology companies.
Groups sue over SESTA-FOSTA. Internet rights groups and others are suing to stop enforcement of a dangerous law passed earlier this year in the name of preventing sex trafficking that will require Internet platforms to censor their users and chill free speech online.
Startup Roundup:
#StartupsEverywhere: Washington, D.C. We met with Shelly Bell, founder of Black Girl Ventures (BGV), to discuss how she is working to change ecosystems across the US. In 2017, only 17 percent of startups reported having a female founder, and many of those female founders struggle when accessing capital. Shelly and her team are working to find creative place-based solutions to dissolve the race and gender gap in access to capital. Policy makers have looked at crowdfunding a solution to this issue, but more work has to be done. With D.C. as Shelly’s homebase, she hopes to expand BGV to other ecosystems across the nation to support underrepresented communities.
Will your city keep up? Technology is changing the way people work and live, but not all cities are adapting as quickly as others. Some cities are future-proofing to ensure a sustainable and lasting infrastructure. The leading cities for future-proofing, as identified by JLL’s City Momentum Index, include major global hubs such as New York, London, and Paris.
