Assembly Standing Committee on Privacy and Consumer Protection

This is... call. It's just you. Okay. This one? This is good, right? Okay. All right. Okay. We are going to go ahead and get started and hope... and hope that we have people running to join us soon. We'll start as a Subcommittee. Welcome to the Assembly Privacy and Consumer Protection hearing. Assembly Member Gabriel is not here today, so I will be serving as Committee Chair in his place.

I would like to acknowledge that Assembly Member Kalra will be filling our Committee vacancy during Assembly Member Gabriel's absence today. To effectively manage our time today, we will be limiting testimony to two witnesses for support, two witnesses for opposition on each bill. Each witness will be allowed three minutes to present their testimony. After the support witnesses conclude their testimony, the Committee will call up additional supporters. No further testimony will be permitted. Additional supporters may only state their name, affiliation, and position for the record.

The same process will be followed for the opposition for this hearing. And until further notice, the Committee will be returning to in-person testimony only as reflected in the file notice. I'd like to note that we are accepting written testimony through the Position Letter Portal on the Committee's website. We have two bills and one resolution on the agenda today. The following resolution has been approved for consent ACR 96, Senator Hoover. Assembly Member Hoover. Yeah, Assembly Member Hoover.

And we cannot do any of this quorum business yet. So we have Senator Skinner, who is going to be presenting both of our bills today, and we still do not have a quorum. So the first file item is number one, SB 478, which is Senator Dodd.

I was going to present, if it's comfortable with you, SB 680 first.

Would you prefer to do that? Then please...

With the Chair's permission.

With the Chair's permission, we will go to 680, file item two. Senator Skinner.

Great. Thank you so much, Madam Chair, members. Pleased to present SB 680. I think many of you are aware that we are facing an unprecedented and urgent crisis amongst our kids where there's high levels of social media addiction. The numbers of hours per day that many of our young people spend on average on social media is beyond at least my comprehension. But the data is there.

There's high levels of teen suicides and that increase in teen suicides, while some people think about the pandemic, have been steadily increasing over the past ten to twelve years and in effect began with the onset that increase with onset of much of this social media. We also have evidence of the very easy ability for anyone, which includes our youth, to purchase fentanyl and other illegal substances via social media sites, as well as illegal firearms.

And in fact, on the illegal substances like fentanyl lace drugs, it is quicker to procure such a substance on social media than it is to use your app and get your Lyft or Uber driver. Research, if we look at teenage girls in particular, or adolescent girls, that researchers posing as teen girls on social media platforms were directed to content on eating disorders every 39 seconds, regardless of any request or content request by the teen.

So, in other words, just the algorithm, the feature, or design of the platform directed that teen girl to eating disorder content every 39 seconds, and to suicide oriented content less frequently, but still with high frequency. What does SB 680 do?

It basically makes it unlawful for a social media platform to use to a feature that they control, whether it's a design, an algorithm, or other feature that would cause child users to inflict harm on themselves or others and experience addiction to the platform and a variety of other things. And that the bill does not have a private right of action. It is solely enforceable by our public prosecutors, whether the AG's office or DA's office.

And there is a safe harbor from liability if the platform audits its practices and if identifying that its design feature is resulting in this, it shows that it has adjusted that practice. And with that, I would like my witnesses in support. I have Nancy Magee, who is the superintendent of schools for San Mateo County, and Anthony Liu, who is the Deputy AG at the Office of Legislative Affairs for our Department of Justice.

Thank you, Senator Skinner. Good afternoon, Madam Chair and esteemed members. I'm Nancy Magee, a lifelong educator, having dedicated 20 years as a high school teacher and another 20 as a school librarian, district and county administrator. I was elected San Mateo County Superintendent in 2018, and I'm here to urge support for SB 680. Senator Skinner's proposed legislation prohibiting social media companies from designing platforms that cause harm to youth. As a teacher, I can attest to how technology can enhance instruction.

At the same time, as an education leader, I contend daily with the mental health crisis gripping our youth. In fact, only weeks ago, the US Surgeon General released an advisory on the impacts of social media on youth. Despite the many ways it poses risk, 95% of 13 to 17-year-olds report using social media, and more than a third say they use social media almost constantly.

More concerning the advisory reports, one-third or more of girls aged eleven to 15 say they feel addicted to certain social media platforms. Our schools are not spared these impacts. For better or worse, social media-driven culture influences student behavior, how they treat others and themselves, and how they show up for learning. It's rare to meet a parent who doesn't share worries about their child's anxiety.

I hear from parents who've tried every trick in the book to establish clear boundaries between their children and their devices, often with limited or at least combative success. SB 680 provides an onramp to action. We cannot put this solely on our families and our schools. Social media companies can prioritize user well-being over metrics and still profit. As great innovators, they can and should implement safeguards to protect youth against addictive algorithms.

SB 680 would be historic towards establishing common-sense regulations that protect our greatest resource, California students. Today I urge your support for this important legislation, SB 680. Thank you for listening.

Thank you.

Good afternoon. My name is Anthony Lew, deputy AG for the Department of Justice Office of Legislative Affairs. Attorney General Bonta is pleased to sponsor SB 680 and thank Senator Skinner for leading on this important legislation to protect the mental and physical health of California children. As children spend more time on social media platforms, it is apparent that the use of social media platforms can lead to harmful outcomes to children in a number of ways.

For example, research shows social media platform addiction has a negative impact on healthy socialization in children and contributes to feelings of social isolation in young people. Other research indicates that time spent on social media is correlated with rates of suicide and depression among teens, especially girls. Social media addiction and its resultant harms are an urgent threat to California's children. In the Attorney General's Office, we are tackling this threat daily, and SB 680 would give California law enforcement an important new tool to protect our children.

Attorney General Bonta reaffirms the need for strong safeguards in California that protect not only the privacy rights of children, but that also address the real demonstrated harms to the physical and mental health of children associated with the use of social media. So, for these reasons, the AG is pleased to sponsor SB 680 and urges to vote I today to ensure California has strong protections for children online. With me is my colleague Eleanor Bloom, who is available to answer any technical questions about the bill.

Love your witnesses.

Ellie along with the child we are trying to protect.

How can we say no? Before we go on to other witnesses in support, I would just like to have the secretary establish a quorum.

Irwin. Here. Irwin, here. Patterson. Here. Patterson, here. Bauer-Kahan. Bennett. Essayli. Here. Essayli, here. Fong. Here. Fong, here. Kalra. Here. Kalra, here. Lowenthal. Here. Lowenthal, here. Papan. Wicks. Wilson. Here. Wilson, here.

All right, we do have a quorum. And I'd like to call other witnesses in the room in support, please.

Good afternoon, Madam Chair and members. Robert Herrell, Executive Director of the Consumer Federation of California, in support of the bill. Thank you.

Good afternoon, Chair and members. Kim Stone, Stone Advocacy on behalf of the California District Attorneys Association, in support.

Good afternoon. Samuel Goodman. Here in support.

Hi, good afternoon. Liz Fenton, on behalf of the Children's Advocacy Institute. In strong support. Thank you.

Good afternoon. Stella Johnson, recent graduate from CK McClatchy Senior High School, here in support.

Good afternoon. Ellie Sutliff, a high school student at McClatchy High School, here to urge you to support 680 to protect teens and youth online. Thank you.

Good afternoon. Nora Smith, Sacramento resident, in support.

Corey Hashida on behalf of the Steinberg Institute, in support.

Kami Peer with Common Sense Media, also on behalf of HalfTheStory, Jewish Family and Children Services of San Francisco, Parents Television and Media Council, and Girl Scouts Heart of Central California, in strong support. Thank you.

Good afternoon. Kathy Van Osten, on behalf of the American Association of University Women California, in strong support.

Thank you very much. And do we have witnesses speaking in opposition? Do we have primary witnesses?

Thank you, Madam Chair and Members. Lia Nitake with TechNet. And we are respectfully opposed to SB 680. We fully support the goal of this bill to protect child users on social media platforms. Unfortunately, in addition to being federally preempted under Section 230 and raising First Amendment concerns, the safe harbor in this bill is unusable. SB 680 prohibits any designs, features, or algorithms that could cause a child user to take certain actions. But the bill is incredibly unclear about how that causation happens.

One of the actions subject to liability is if a child develops an eating disorder. But it's fair to ask, under this bill, would viewing a workout video be considered to trigger an eating disorder? Does cause mean that the platform is the only factor that caused the eating disorder? A contributing factor? A substantial factor? And would that apply to all child users, any child user, or the average child user?

What about content related to recovering from an eating disorder that's meant to be empowering, but may actually be triggering for some child users? Because of these ambiguities, the safe harbor is unusable. Should the platform know that the user would develop an eating disorder because of a newsfeed? Features, designs, and algorithms are not limited to showing just one type of content. And this is why they will almost always scope in far more than what's being targeted in this bill.

And this is why it's impossible for platforms to sufficiently correct these kinds of core features without completely dismantling a platform's fundamental design, or limiting or restricting access for child users. Finally, the threat of liability will lead platforms to over-remove content, silencing lawful speech. While attempting to protect child users from harm, this bill would, in fact, harm other child users, including teens who find their only welcoming and safe communities to be on these platforms. Again, we appreciate and support the intent of this bill, but for these reasons, we must respectfully oppose SB 680.

Thank you.

Good afternoon, Chair Irwin and Members of the Committee. I'm Jess Miers, Legal Advocacy Counsel for Chamber of Progress, a tech coalition promoting equitable access to technological advances for all Americans. Today, I'm here to voice Chamber of Progress's opposition to SB 680, which, despite its stated goal of safeguarding children, will have unintended consequences that undermine this objective. The bill's vague definition of addiction will leave platforms to make impossible decisions about what kids should see online.

Given the bill's liability provisions, platforms may choose to restrict access to California youth, disproportionately impacting marginalized teens, including LGBTQ Plus youth seeking support, and teens in need of reproductive and sexual health information. Indeed, a recent Pew study found that the majority of teens consider social media a social lifeline. SB 680's restrictions on designs, algorithms, and features related to self harm will inadvertently limit access to crucial self-help resources.

This includes information on recognizing warning signs for suicide and algorithms that redirect at risk users to immediate help, like the suicide hotline. The bill similarly hampers platforms' ability to guide child users towards positive content when searching for information on disordered eating. Lastly, SB 680 will likely result in the removal of substance abuse resources from libraries, pharmacies, and other organizations. This includes information on identifying signs of drug use and obtaining life saving products like Narcan.

Consequently, individuals may resort to unreliable sources, increasing the risks associated with substance abuse. We recognize the importance of protecting young people online. Platforms consistently improve safety measures through advancements in designs, algorithms, and features. Improvements which SB 680 would directly undermine. While the intention behind SB 680 is commendable, the unintended consequences cannot be ignored. We urge the committee to reconsider the bill knowing the potential harms it will cause. Thank you for your time and consideration.

Thank you very much. Do we have other witnesses in the room in opposition?

Hi. Yadi with Oakland Privacy in opposition of SB 680.

Good afternoon, Chair and Members. Naomi Padron on behalf of the Computer and Communications Industry Association in respectful opposition.

Good afternoon, Chair and Members. Cameron Demetre on behalf of NetChoice, in opposition.

Good afternoon, Chair, Members. Ronak Daylami on behalf of the California Chamber of Commerce. Respectfully opposed. Thank you.

Dan Chia of the Civil Justice Association in California. We're going to be in opposition.

Tim Lynch on behalf of the Entertainment Software Association. With apologies to the author and the Committee. We're late with our letter, but we are opposed to the bill.

All right. Do we have comments from the Committee? Comments or questions? Assembly Member Lowenthal?

It's going to be a little lengthy here, Madam Chair. Forgive me. The very first thing I would like to do is commend the Senator for bringing this very, very important legislation forward. I am living this right now As a dad of three adolescent girls, I'm in this. And with respect to the opposition, the words I have for you are, shame on you. Shame on you for trying to throw the baby out with the bathwater. I come from a career in tech.

Some of the greatest minds we have in the state of California are in tech. And we do not have to put at risk these unintended consequences. The levels of sophistication that can be drawn in this artificial intelligence preclude the very things that you're talking about. I have complete and total faith in our tech community for doing the right thing and protecting our youth and measuring the right thing. And let's be honest as to why we're actually wanting to do this.

We're wanting to do this, or the Senator needs to bring this forward, because our federal government is failing to act. Straight up. We have a lack of robust age verification systems across all platforms in other countries there are for the very same social networks. We lack robust age verification systems. We don't have any action despite this incredible change in the mental and emotional health of our girls in this state.

I'm authoring a bill called AB 10 that has to do with body shaming in our public schools and having policy and curriculum around body shaming in our public schools because of the total and complete change in behavior amongst girls in our schools right now as a result of what's happening on social media networks. And I've seen in my children's social media the presentation of diet pills, of other things that make them question their own self worth and their own body image. I've seen it firsthand.

It is totally and completely inappropriate. And if you think about the incentives under which these networks are operating. We're not the customer in social media, we're the product, everyone. The customer are actually the ad networks that are paying for this very, very rich and sticky media. And the more sticky it is, the more they're willing to pay for it. And that's preying upon the immaturity and lack of emotional and intellectual development that our children have. And that has to end. There's two ways to do that.

There's ways to do that with a stick, which is what this bill brings forward, and there's ways to do it with a carrot. We need, as a state, beyond this bill, to continue to partner with the social media networks and state deliberately exactly what do we want our social networks to present as they do in other countries where they emphasize STEM research, and how to become an astronaut, and how to break ceilings that you may not know that are in front of you?

How do you aspire for greatness? And those are all things that we should have in California and the United States. So I think that there's a long way to go that this bill is actually just the beginning of it. I have two other bills. One of them is to... Or one other bill that's to create a state commission on social media and mental health to continue to address this. So this is a starting point, not an endpoint. So once again, I thank you Senator, for bringing this forward. I totally, completely support this bill and would ask if you would consider me to be a co author or principal co author. Thank you.

Assembly Member Essayli.

Yes, thank you. Hi. Good afternoon, everyone. Question for the opposition. Have you guys seen The Social Dilemma on Netflix? Have you? You haven't seen it? Well, I highly encourage you to watch it. Because it's very interesting when you watch what the experts in tech who built the systems talk about, how they use the systems to manipulate human behavior. And they rely on brain reward mechanisms like dopamine to attract and addict people to their platforms. And I think it's been very, very successful.

And you could see our kids today, they're glued to their phones. They're highly addicted. The US Surgeon General just put out a huge report finding that... He said teens use social media for more than 3 hours a day face double the risk of depression and anxiety symptoms. Double. And then we know it's especially problematic for young women, with the eating disorders and the body image issues. So I haven't seen a lot of benefits from kids being on social media, to be honest.

I think it's been, on the balance, it's been a lot more harmful. And so I do think it's a public health issue. Whether this is the right solution, I don't know. I plan to support it. I have a feeling you'll gum it up in the court system. And so I just encourage that we as policymakers continue to really take this seriously and figure out a solution. My personal views, I've made it clear, is that I don't think kids should be on social media.

I think Utah's done that. Some other states are doing that. I think social media is more harmful than tobacco, so we should treat it the way we treat tobacco. You cannot... Try to find a kid who can buy tobacco in California. It's almost impossible. So we can stop kids from getting tobacco. I think we can stop them from getting on social media. And I know some lawsuits have been filed by school districts. I encourage more of those. We do need litigation in the court system. We need laws. We got to get our kids off there. So with that, I will support the bill, and if this doesn't work, then we figure something else out. All right, thank you.

Assembly Member Wilson.

Thank you. I commend the author for bringing this forward. I'm going to support the bill today. And my only concern is that it is pretty broad, and I do think that that could be problematic later. I think that can be worked out and figured out not necessarily even through the legislative process, through just how we do it in lawsuits and there's decisions and things like that.

I always try to avoid those and hope that we can mitigate those things here. But I think it's a starting point. And I do know that several times, even in the analysis, it shows we've tried this before. I got the chance to vote on something last year that didn't make it all the way through. So we'll support it. But I do recognize that point that there is some broad language in there that I think can be problematic. And so as you continue to navigate, I know it's not over till it's over. Think about how we can word things to know narrow that. Thank you.

Assembly Member Kalra.

Thank you, Madam Chair. I want to thank the Senator for bringing forward. I do think that there are some benefits from social media, even with youth, but it must be regulated. And one thing is for certain, that no matter what the result of this legislation is, we're going to have to come back and continue working on it because it's an ever evolving... technology is ever evolving. And I think it's going to require our diligence.

And as someone that's on many platforms, including TikTok, the reality is, if you look at in China, they regulate TikTok heavily and only allow for educational content for young people. And yet here, you know, we just presume that we don't have control over it. And it's completely not true. We do have some degree control. And to our colleague's point, because of a lack of federal action, we can't just sit on our hands. Especially given the fact that technology, much of it is being created here in our own backyard, in my district and near my district.

And so I do think that we have an extra obligation to protect our youth and to ensure that these very valuable, otherwise very valuable, social media companies and experiences that they can provide are done so in a way that creates the least amount of harm possible to our youth. So I want to thank the Senator and would also like to be added on as a co author.

Thank you, Assembly Member Kalra. Any other comments? Senator Skinner, I appreciate your work on this issue. Obviously very complicated. And whether this is going to be the solution, we don't know yet. And to your point, I don't think it's just children that are addicted. We can sit with a group of our colleagues and see everybody addicted to the phone. Because we have put every possible thing we could want in there, including Assembly Member Kalra's camera, right? For the selfie.

And I'm very grateful that my kids are a little bit older than a lot of your children because I just don't know how I would navigate the system the way it is now. Allowing children and teens to spend a lot of time on social media. In allowing that, we've embarked on a dangerous experiment, and we are using our children as guinea pigs.

A growing body of research has demonstrated that young users face significant health risks because of social media. And we've heard about it. Suicide and depression and anorexia, low self esteem, and the list goes on and on. I think the big part of the problem is these media platforms want you to engage, and very often that engagement is exactly what leads to addiction. So it's a difficult problem to solve.

But I think that by requiring these social media companies to regularly audit and update their platforms, ensuring that they don't harm children. I think that that's going to be a very beneficial part of your bill. So I just want to make sure that you're going to be taking the committee amendments.

Yes. That was not on my talking points. Absolutely.

And Senator, you may close.

Thank you so much. So we, the State of California, do not have the right to regulate the content. There's areas, both the federal laws and others. So this bill was carefully constructed. We used our best legal minds available, both in our Department of Justice within our Leg. Council, within other stakeholders that were advising us, including, also, lawyers in different of our committees, to craft this in a way that did not run afoul of those other, either constitutional or other legal jurisdictional areas.

And so that is why it is around the design features and the algorithms and such. Then on the question of, perhaps should we take like Utah's approach. And certainly there are many people who would advocate that. And I chose not to go that direction yet. I think that's certainly something that in future should be considered because there are benefits for many youth. Their comfort community, their community of likeminded peers is often only found through social media.

And so I did not want to, as I think somebody said, somebody like throw the baby out with the bathwater. I wanted really to get at those aspects of it that create harm. And so that's really what we attempted to do. Now on the broadness, if this bill were a private right of action, then I can certainly see that point.

But given that the only ability to enforce it is through our public prosecutors. I think most of us know that prosecutors don't tend to take things to court unless they... act on something... unless they have good evidence that it has violated more than just the spirit of that. So that's another reason it was designed that way. And I would guess it will be put in court, and we will see how all that goes.

But I really appreciate that there are lots of folks, lots of our colleagues in the legislature, thinking about this issue. And thinking about what else. If this bill, and I hope that it is successful and the Governor signs into the law. If it does not accomplish the goal, then that we are still pursuing other things. Because to leave it to parents, as our good superintendent described, to leave it to parents or schools now, is just such an unfair circumstance.

Because anyone beyond The Social Dilemma, which your colleague referenced. If you just go on 60 Minutes and do some searches, they have had numerous features around parents, encounters where parents tried to limit and monitor and restrict their children, and schools that tried to, the whole gamut. And basically that it's close to impossible. So it's not a fair position to put our parents or our schools in. And with that, I ask for your aye vote.

All right, very good. Motion? All right, we have a motion by Assembly Member Lowenthal and a second by Assembly Member Essayli. And the motion is due pass as amended to the Appropriations Committee. Can I have the secretary please call the roll?

Item number two, SB 680 by Senator Skinner. Irwin. Aye. Irwin, aye. Patterson? Bauer-Kahan? Bennett? Essayli? Essayli, aye. Fong? Fong, aye. Kalra? Kalra, aye. Lowenthal? Lowenthal, aye. Papan? Wicks? Wilson? Wilson, aye.

All right, that Bill has passed. We'll leave the roll open yes. And changing course, but with the same author. We are going to go back to file item 1, SB 478. While we're waiting for everybody to, while we're waiting for everybody, why don't we go ahead and do the consent calendar? Okay. Motion by Assemblymember Fong. Second by Assemblymember Kalra.

Consent calendar. The motion is do pass to the consent calendar. Irwin? Irwin aye. Patterson? Bauer-Kahan? Bennett? Essayli? Essayli aye. Fong? Fong aye. Kalra? Kalra aye. Lowenthal? Lowenthal aye. Papan? Wicks? Wilson? Wilson aye.

Alright, and consent calendar is out. Senator, you may begin whenever you are ready. On behalf of Senator Dodd.

Yes, absolutely. And our Attorney General witnesses on this Bill also. So SB 478, pleased to present for Senator Dodd. I'm, also a joint author or co-author or something to that effect. Sorry. Anyway, this Bill deals with this phenomena that's increasing where any of us will go online and book a vacation or book a hotel room or book a ticket, and we see the price listed.

And then next thing you know, we get to the place where you're checkout or whatever and use your credit card, and boom, all of a sudden, there's multiple hidden fees. Or worse than that, we make the reservation and we get to the location, and we're told about multiple hidden fees at a point where we then can't even remove ourselves.

So what this Bill does is it stops junk fees and deceptive price advertising by making it unlawful under the Consumer Legal Remedies Act to advertise a price for a good or service that does not include all required charges other than the taxes and fees imposed by government. So with that, I would like to have Ted Mermin, who is the Director of the California Low Income Consumer Coalition, as my witness, and Eleanor Blume.

Good afternoon, Mrs. Chair and committee Members. First of all, I would like to thank you all for your patience and thank Senator Skinner for her patience and her colleagues for theirs. With our little bit of a childcare crisis today, my son is far too young for social media. We still have time to fix those problems before he is old enough to be online. But we are in the crux of another urgent social challenge here with childcare and working parents.

My name is Eleanor Blume, and I'm the Special Assistant Attorney General for Economic Justice in the Attorney General's office. Attorney General Bonta is proud to sponsor SB 478 to bring an end to hidden fees in California. On behalf of the Attorney General, I want to thank Senator Skinner and Senator Dodd for authoring this important legislation to protect California consumers. Businesses use hidden fees or junk fees to pitch an artificially low headline price to attract a customer before revealing additional charges later in the buying process.

These hidden fees are bad for consumers and bad for competition, whether traveling, purchasing concert tickets, or picking up a meal. We all know how frustrating it is to get to the checkout and find out that something advertised as one price actually costs much more. This is more than just frustrating.

Obscuring the true price of a product or service makes it hard for consumers to choose to sort by price and make the decision that is best for them and their families at the outset of a transaction to plan and to budget. This lack of transparency also makes it hard for honest businesses to compete on price. Bad for consumers and bad for competition. We're seeing this bait-and-switch pricing adopted in many industries.

Rather than moving toward greater transparency, more businesses in more industries are choosing to hide the true cost to the consumer. In fact, we know at least 85% of Americans have encountered an unexpected or hidden fee over the past two years. There's no reason to tolerate this. These junk fees cost consumers billions of dollars each year and hurt working families at a time where every dollar matters that much more.

This deceptive practice also hurts businesses that are doing business the right way by being transparent about their prices. This necessitates legislative action. We can and should stop this in California. We can and should stop the fleecing of consumers. We can and should stop the imbalance in the marketplace that makes it even harder for businesses that want to play by the rules and do right by their customers to succeed. In California, the price listed should be the price you pay. It's pretty simple.

And we have a pretty simple solution. SB 478 will prohibit the practice of charging hidden mandatory fees. The Bill would prohibit advertising a price for a good or service that does not include all required charges other than taxes and fees imposed by a government. SB 478, as I said, is a simple solution. With this legislation, California would make clear that the price you see should be the price you pay. Attorney General Bonta urges your aye vote on this consumer protection legislation.

I am here along with my colleague Anthony Liu, to answer any questions you may have.

Thank you.

Senator Skinner has many talents. Chair and Members, my name is Ted Mermin. I'm here today on behalf of SB 478's co-sponsor, the California Low-Income Consumer Coalition, or CLICC, to explain why this Bill means so much, not just to all Californians, but specifically to those living on the financial edge. CLICC's members provide free legal services to the state's most vulnerable residents. Day after day, we hear from people who are barely getting by.

They're managing to hold on, but are one surprise charge away from falling off an economic cliff. These are the people who can't afford to pay the hidden 20% convenience fee for a restaurant delivery service when they don't have time to cook, or the service fee for a concert ticket they'd saved up for for their daughter's birthday. Now, you heard from Ms. Blume that 85% of Americans have encountered these surprise fees.

I would just add that according to the same study, 96% of those people don't like them. As President Biden observed in his State of the Union address this year, junk fees may not matter to the very wealthy, but they matter to most folks. Now, the White House has gotten oral commitments from some big companies to mend their ways, but those commitments don't mean much if there's no law to back them up.

This Congress, as we heard in other contexts, isn't going to act, but I believe this Legislature will. Honesty and price advertising has been required in this state for more than 100 years. The drip pricing trick has infected a lot of industries. Perhaps you have heard from some of them recently. It is the subject of a recent study explaining just how it works on consumers by the Harvard Business School.

In other words, it's everywhere, and it is harming both consumers and businesses that want to be transparent with their customers. How is an above-board business that doesn't want to deceive consumers supposed to compete when the store down the block is advertising a price that doesn't include the real price?

Clearly, this is a problem that requires, as Ms. Blume said, legislative action, because the only solution that will work is one that is across the board, one that will require all Members of an industry to compete fairly. SB 478 would establish a level playing field that will benefit consumers and businesses. We respectfully ask for your aye vote.

Thank you very much. Do we have any other witnesses in the room that would like to speak in support of this Bill?

Samuel Goodman, here on behalf of Kim Stone of Stone Advocacy, representing the California District Attorneys Association in strong support.

Rebecca Marcus, representing the Consumer Protection Policy Center at the University of San Diego School of Law, and CALPIRG in support.

Hi, Yadi With Oakland Privacy and support.

Good afternoon. Robert Herrell with the Consumer Federation of California in support. Though I wouldn't be doing my job if I didn't note that I'm a bit concerned at the potential cavalcade of carve outs that are beginning to impact this Bill. Thank you.

Emellia Zamani with the California Trial Association. Want to thank the authors sponsor and committee. We are moving to neutral with the new amendments. Thanks.

Okay. All right, so let's get up the opposition.

Robert Moutrie for the California Chamber of Commerce. We are respectfully opposed. First, I want to applaud the expert and Senator Skinner for the impromptu childcare. And I have some snacks, if that would be helpful. I'm glad to offer so, we are respectfully opposed to SB 478. This comes down to two key concerns, and I want to thank the chief consultant for the very thorough analysis dealing with the points, I think quite well.

Our first concern relates to the duplicative nature of this as we see it vis a vis was well captured analysis, pre existing law which was utilized in my personal experience to shut down Paul Blanco's Good Car Company for false advertising. Now, obviously, we have a difference of opinion with the analysis about whether a new tool is necessary, but appreciate the capture. Second, I want to thank the sponsor and the local author, I should say, for the amends to deal with industry specific concerns around conflict issues.

I know that's a lot of work has gone into those amendments and appreciate the effort on your part. So with that, we are respectfully opposed. Thank you.

Right. Thank you. Do we have any?

I am taking the committee amends.

That's what I've been waiting for. All right. Do we have any other folks in the room? Speaking on opposition? In opposition.

Madam Chairman, the Committee. John Moffat on behalf of two clients today. First want to thank the author and sponsors on the rental car provisions and the Committee on the rental car provisions on behalf of Enterprise, on behalf of the Alliance for Automotive Innovation. Still working with the author and sponsors on dealing with MSRP and things like that. We're prohibited from selling cars in the state of California, but we do run ads about MSRP and lease options. And so working through those issues and appreciate the ongoing work.

Madam Chair Members, Dan Chao representing the Civil Justice Association of California regarding opposition.

Lia Nitake with TechNet in respectful opposition, but appreciate ongoing conversations with the author and sponsor.

Alright, questions or comments from the dais? Assemblymember Wilson?

Just a quick question as I was thinking through the examples given. Does this apply to like DoorDash and Uber and Lyft and all of that stuff in terms of what they advertise, when you go to click, say yes, I want that, and then the fees are added?

The AG's office wants to apply to any charges by DoorDash or Uber or Lyft.

So I appreciate the question. Food delivery charges that are not taxes and fees imposed by government are encompassed within what would be required to be disclosed at the outset of a transaction.

So the additional fees they have, as long as it's not a tax, government imposed tax. And then one of the things that was mentioned in the analysis that I just caught, it talks about destination fees. And a lot of times destination fees are with our government. They could be tourism, they're approved by the voters or something. Is that in essence government fees or are you talking about destination? Just relate to convenience from the.

A local government, whether county or city, that imposes, say, a hotel tax. That's a government tax. So that is not the hotel itself, if we use that example, does not have to disclose that.

Right. But the tourism fee sometimes is government imposed.

Yea it's the same thing. Same thing.

But basically anything government, correct, local government, whatever. Or if voters tax. Themselves on something that doesn't have to be. Thank you for clarifying for me.

Assembly Member Wicks.

First of all, Ms. Blume, I just wanted to say I see you. I feel you. I've been you. So. Hang in there, Mama. I know what it's like. You're doing great. I also like this Bill a lot.

I'd like to make a motion, if there hasn't one already been made I don't know. And would love to be added as a co-author. Appreciate your good work also, and would love to see this Bill go through and happy to help in any way that I can, because this is obviously an important issue for many people of all walks of life. So I appreciate the good work and happy to make the motion.

All right, Assemblymember Bauer-Kahan.

Just would also like to be added as a co-author if the author is amenable.

Thank you.

All right. Assemblymember Kalra.

Thank you, Madam Chair. I'd also like to be added as a co-author. Thank you, Senator, for your work.

Great. All right. Do we have any other comments? So, as was mentioned, we're all unhappily familiar with what President Biden calls junk fees, unexpected and unexplained charges that pop up at the end of transactions, sometimes after we've spent hours online. And we've been working on that on another Bill. And obviously, this is much more all-consuming.

This Bill would amend the Consumer Legal Remedies Act to prohibit advertising, displaying, or offering a price for a good or service that does not include all the mandatory fees or charges businesses will have to compete on the basis of price and value offered, rather than their ability to fool people into paying junk fees. And there's no reason for us to wait for federal action. The Consumer Legal Remedies Act has proven for decades to be an effective device for targeting and stopping specific types of economic misconduct.

And you have already accepted the committee amendments. And so, would you like to close?

Thank you. Respectfully ask for your vote. And yes, I will have Senator Dodd add Wicks and Kalra as co-authors. And if there's anyone else, please let us know.

All right. And with that, we had a motion by Assemblymember Wicks and a second by Assemblymember Papan, and the motion is. Oh it was Assemblymember Kalra who seconded? Okay. All right. And the motion is to be adopted. Do pass as amended. The motion is do pass as amended. And if I could have the Secretary please call the roll.

Item number 1, SB 478 by Senator Dodd. The motion is do pass as amended. Irwin? Irwin aye. Patterson? Bauer-Kahan? Bauer-Kahan aye. Bennett? Bennett aye. Essayli? Essayli no. Fong? Fong no. Kalra? Kalra aye. Lowenthal? Lowenthal aye. Papan? Papan aye. Wicks? Wicks aye. Wilson? Wilson aye.

Okay. The vote currently is eight to two. I don't know if we're missing any. Yeah, I thought the motion to be adopted might have been a new thing that they use here in privacy. All right, that Bill has passed. We are going to go ahead and add starting with the consent calendar. Thank you, Senator Skinner.

Thank you.

Do pass to the consent calendar? Patterson. The consent calendar. Bauer-Kahan. Bauer-Kahan aye. Thank you. Bennett? Bennett aye. Papan? Papan aye. Wicks? Wicks aye.

All right. And that vote is ten to zero for the consent calendar. File item two, 680. SB 680.

Item number two, SB 680. Patterson? Bennett? Bennett aye. Papan? Papan aye. Wicks? Wicks aye. Did I? I'm sorry. Bauer-Kahan? Bauer-Kahan aye. Thank you.

All right, that bill is out, ten to zero. All right. So we will leave the roll open for...

Consent and two? I think we are good here. We will wait. How long do you usually wait? All right. Oh, no, that's just a little usually we just give like, five or ten minutes. Oh, all right. And with that, we are going to be adjourning this meeting of the privacy committee because privacy and consumer protection.