Senate President Jake Chapman, R- Adel, one of 30 sponsors who introduced Senate File 402, said the bill — which targets internet sites and digital marketplaces with at least 20 million subscribers or members — would block or take away government financial inducements for companies like Facebook and Google that have located data centers in Iowa if they were deemed to be muzzling free speech.
But representatives from business groups, education and the Iowa Attorney General's Office warned the result could cause widespread interference with contractual arrangements, cost the state jobs and damage efforts to attract and keep high-tech companies.
"By considering this legislation, the state's business environment and reputation could be damaged as companies that were considering entering the state would have to weigh whether or not it's worth angering the Legislature," said Tyler Diers of TechNet, a national bipartisan network of technology CEOs and senior executives during a Senate Commerce subcommittee. Diers said companies take seriously their responsibility to remove harmful content in an unbiased manner, while keeping their services open to a broad range of ideas.
But the proposed bill "perversely creates an incentive" for private entities not to prohibit or remove objectionable content in order to keep tax incentives for projects that are providing jobs and economic development in Iowa.
"It would be bad public policy for the Legislature to 'weaponize' economic development programs in order to forward a political agenda at the expense of the state's economic interests," he said.
However, subcommittee member Jason Schultz, R- Schleswig, said he believes social media platforms have tilted in favor of liberal ideologies to suppress conservative speech in agreeing to advance the bill to full committee for consideration.
"These platforms have become weaponized by progressive ideology and moved to the point where they will leave anything inappropriate up on the progressive side of the nation's ideological spectrum but seem to jump immediately like a guard dog against anything that moves toward the conservative side," Schultz said.
"I think you have to let both or you have to stop both if you are a private company trying to be consistent and I don't see that," Schultz said. "I don't think we should stop here today."
Nathan Blake of the Iowa Attorney General's Office said the bill establishes some unrealistic timelines and complaint procedures without investigatory powers that would be difficult to meet without a "substantial increase" in state resources and creation of a new division to handle complex cases.
He said the bill likely would raise conflict of interest concerns with the attorney general responsible for enforcing provisions but also defending state government agencies that have entered into contractual agreements with technology providers.
"Policing all of that is going to be just an enormous amount of volume," Blake said.
Emily Piper of the Iowa Association of School Boards said the bill could negatively disrupt the delivery of online educational services.
Keith Saunders, a lobbyist for the state Board of Regents and the University of Iowa, worried a contractual interruption with a technology provider could shut down the UI's utility plant, hospital, thousands of computers, email and phone systems, as well as the scoreboard at Kinnick Stadium.
"We depend upon these technologies to deliver education, to deliver service and to do research across our campuses," he said. "It would literally shut down how we do business."
Chapman said a legislative response that sends "a strong message" is needed because overreaching Big Tech companies — whose social networks are "the public square of the 21st century" — have shown a "feckless disregard" for individual rights but are being shielded by an antiquated federal law that provides liability immunity from civil action, with no prospect for congressional action.
"Under our proposal, Big Tech will be required to recognize the rights of our citizens," Chapman said last week. "Failure to comply with the law will result in Iowans having a mechanism to have their complaint investigated and heard before a court of law.
"If a judge determines, constitutionally protected speech has been censored, the Big Tech company will forfeit their rights to any and all tax breaks, exemptions or any other benefit they receive in our state for 20 years."
Chapman said he was disappointed that no representatives of large-tech companies like Amazon, Apple, Facebook, Microsoft and Google that have facilities in Iowa showed up to testify at Wednesday's subcommittee hearing, and he was disappointed that Iowa interests only raised economic impact concerns.
"What is the value of our Bill of Rights?" he asked. "I think it is a very dangerous road Big Tech is going down. This is not to simply get the attention of the Big Tech. This is to change the behavior of Big Tech."
Subcommittee member Sen. Liz Mathis, D- Hiawatha, said she understood but disagreed with what sponsors of the bill were trying to get at and, while trying to make a point, may have "opened a can of worms" in the process.
"I think there are some levels of realism that we have to take into account around this bill" in regard to actual enforcement of its provisions. "This is an imperfect piece of policy and to advance this could be more dangerous than you think."
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