Assembly Standing Committee on Privacy and Consumer Protection

Good afternoon, and welcome to Assembly Privacy and Consumer Protection hearing. We have 12 bills on the agenda today. We will have Assemblymember Berman subbing in for Assemblymember Wicks, who is out today. As we've notified authors, although we typically hear bills in file order, we're doing a couple of changes to accommodate my schedule.

And so we will be hearing my Bill, A.B. 1405 first. And then Assemblymember Lowenthal with A.B. 2 second. And then we will proceed with the agenda as in the daily file. So to manage time as usual, two minutes per witness, two witnesses per side. If you have one witness, you may take all four minutes.

After the support witnesses conclude, the Committee will call for all additional supporters. Same for the opposition. Don't disrupt the hearing. Be polite. Be better than that. Let's have good government with that. We will begin with AB 1405. And we'll hand the gavel over to Ms. Dixon. To Madam Vice Chair. To run the show. All right?

No, I don't believe so, but we can start as a Subcommitee.

Yeah, she just open, so. Republicans are. Well represented.

But it allows us to be efficient.

Okay. Are we ready? All right. So remember. Okay. And. Would you like to begin? We do not have a quorum. We do not have a quorum yet. I don't believe. No, we do have a quorum.

zero, we do. Did we just get one? Great. All right, we are. Wait, we need 908. 08. You're right.

[Roll call]

We do have a quorum. Let's proceed. Good afternoon, Madam Vice Chair. Thank you for presiding. I want to start by thanking the Committee staff, as always the best in the building, for their hard work on this Bill.

I'll be accepting the Committee amendments which allow whistle blower reports to be shared for enforcement purposes and require additional information to be included in the audit reports. Today I'm presenting AB 1405.

And just to be clear, AB 1405 is a continuation in the work this body is doing to set up what will be needed to have good oversight of AI tools. It itself does not require the auditing of any specific AI tool.

It merely says that if somebody requires AI auditors in a separate piece of legislation that this will set up what is necessary for those auditors to provide the work in a way that this government should, with Independence and with good standards and the like. It requires the auditors to abide by basic transparency, as I said, ethical standards.

And you know, the goal really here is to have a consistent approach for us to be weighing in on what we want the future of AI regulation to look like. This is a lightweight mechanism for oversight that can be shared across bills as they move through the process.

And I really believe that consumers will benefit when we have these unbiased experts in settings where we think it is necessary, again, not here, determining what is necessary and what is not. But in order for that auditing to work properly, they must be experts and they must be unbiased. And we need to know who they are.

And so the database that would be available through govops would allow us to assess and select from those auditors.

This will improve consumer trust in AI and allow for AI to be something that is present in our lives every day, like it is today, but in a way that individuals know that it has been in high risk situations, that it perhaps has been viewed by those with these standards.

With me today is Shea Brown, the CEO and founder of Babel AI and a Member of the International Association of Algorithmic Auditors.

Chair Members of the Committee, thank you for the opportunity to speak in support of this law. My name is Shea Brown and I'm speaking today on behalf of the International Association of Algorithmic Auditors, or the IAA, A community of practice aims to advance and organize the AI auditing profession.

I am also a Member, a board Member of the For Humanity, a global nonprofit established to certify AI systems. And finally, I'm the founder and CEO of Babel AI, formerly Professor of astrophysics at the University of Iowa. So, since 2018, the team at Babel has conducted AI audits, impact assessments and technical testing of high risk AI systems.

And we are committed to working at the forefront of research, policy and education in this field. We're just one example of dozens of organizations represented by the IEEE that are dedicated to serving the public, businesses and regulators in ensuring the AI promotes human flourishing.

As an AI auditing community, we recognize the urgent need for clear oversight and accountability in the deployment of artificial intelligence. And AI auditing is a critical mechanism for ensuring these systems align with public expectations for transparency and safety.

Just as independent audits help stabilize capital markets, we believe that AI auditing will similarly build trust in the emerging AI driven marketplace, enabling Businesses, investors and consumers to confidently innovate with these new AI technologies. AI audits help ensure AI technologies not only compliant with regulations, but also aligned with ethical and societal standards.

By putting requirements for AI auditors into law, California would set a strong precedent, one that balances innovation with accountability and fosters public trust in AI. The AI auditing community welcomes this effort to provide oversight, transparency, and mechanisms for holding all stakeholders accountable.

As auditors, we stand ready to support the responsible implementation of AI and work collaboratively, collaboratively with lawmakers, businesses and the public to ensure AI systems serve society safely and effectively. Thank you for your time and consideration.

Thank you. Do we have any speakers in support of Assembly Bill 1405?

I'm on the wrong one.

Jay Jessima from the Transparency Coalition in support.

Thank you. Tracy Rosenberg from Oakland Privacy in support of the bill. Mikey Ho on behalf of Common Sense Media and support.

Any other speakers in support? Do we have speakers in opposition? Please come forward. Seeing none comments from the DAIs. Mr. Patterson.

Thank you. I think I'm sharing the microphone with Assembly. I'm just kidding. You got your own. All right, good. So what this, this Bill creates a registry of auditors. Help me understand why the government should do that, rather than like a trade Association or something like that.

So I think, you know, we do this in other settings where we require auditors because we want to make sure that they have certain standards, they have Independence, they have the ability to provide good quality audits. In my mind, and again, this doesn't actually say where audits would be required.

We would be doing this in, you know, we've seen this in bills where there are significant high risk settings. That's where we've seen legislators proposing that we should have AI audits just like we have financial audits in situations that we want to make sure books are proper.

And in those settings, I think it's important that there's some standard that we understand what that audit looks like and what it means.

All right. The one thing I just want to point out in one of the letters that did give me some concern, I think it was from one of the opponents, or sorry, supporters, was that the California Privacy Protection Agency, as you know, they're inexplicably creating regulations around AI. I don't think they have the authority to do so.

They're one of the Commissioner's comments that the Legislature is incapable of doing something around AI. It's totally inappropriate and shows how rogue our government agencies and regulatory agencies have gotten. In California, the Privacy Agency has no authority to do, in my view, to do regulations.

But one of the letters pointed out that this Bill would help them as they're proposing their regulations, that this would kind of set a foundation.

And I just want to personally put on record that I hope in future letters, and I know you didn't write the letter, it's one of the supporters that we don't reference any authority that they have to do so because I don't think we've determined as a Legislature that they have the authority to do that.

They've taken it upon themselves. But just want to make. I don't want this Bill to assist them, I think is really the comment I was going to make. So just wanted to put that out there. So thank you.

Yes. And if I may, Madam Vice Chair, may I? Thank you. And I will say that I made a choice to put the enrollment under govops and not the privacy agency. That was. We all make choices. That was a choice I made in the Bill. To your point, and I know that a question has been raised.

As I mentioned, the Bill is silent on what these individuals would audit. That's because I don't intend this Bill to require any audits. To be honest with you, some Members of the Committee saw that silence as me empowering an agency to do so. And it was the first time that had been raised with me.

But I'm happy to address that in future committees.

Any other questions? Yes.

Like Mr. Patterson, I've got concerns about the. The practical implementation of the Bill. I think eventually we're going to be going to a system like this, but I, I prefer using the private sector or trade associations. So when the technology world. Well, it's, it's. For the past 60 years, they've been able to appropriately deal with this.

The ISO system, International Standards Organization, has a variety of methodologies and standards that they've put out. Years ago, there was something called the Capability Maturity Model, remember cmm? And so none of that was established by government.

It was established by practitioners who got together and said, this is what we will hold each other accountable for as the body of practice, as people who do this day in and day out. I wouldn't ask government to set standards on how to even, you know, build a Wagon wheel.

At this point, I don't trust our government to get this better than the State of practice and the actual industry. And so I'm concerned when I see in the summary that the government will be evaluating the, quote, relevant qualifications, certifications and accreditations of the Auditor.

So it would presume that this Government agency will be the one to police whose certifications, which accreditations are sufficient to be an AI Auditor. That's a lot of delegating by this body, this legislative body, to a government agency to determine who passes the test, if you will.

It also says that it requires an enrolled Auditor to abide by generally accepted industry best practices. AI is so new. I'm not sure we know what that means at this point.

And so I'm very hesitant to just say, okay, we're going to have a voluntary place where people can sign up and get this gold standard from the State of California that you're somehow an AI Auditor, when we ourselves, as a Legislature, we don't even know what standards those are going to be.

I know what you're trying to achieve, and I think it's laudable. We eventually need to get there, and hopefully the industry gets there. But I'm very concerned about the unintended consequences of the Bill.

And maybe if we could provide clearer language and maybe there could be some sort of nod to the professional associations that they would develop certain standards, and if those standards are adopted, then we would be willing to move forward as the State of California, creating some sort of registry.

Maybe we see this more as a challenge bill to the industry, but right now this is such a new space that I worry that the government bureaucrats are probably going to get it wrong. And we really do defer to them in a very broad sense.

With all of these reviews for people wanting to be auditors, I mean, I don't even know. Maybe I could be an AI Auditor on the basis of this. There doesn't seem to be a clear standard for who gets in and who gets out. So.

Madam Bishop? Yes, you may. Sure, yeah. My witness on this.

Yeah, those are really good points. I think the. There needs to be some basic sort of baseline. I think this. There are. I'll give you an example. So in New York City, there was a law that was passed requiring bias audits, and there was no guidelines at all on what it meant to be an Auditor.

And that caused a lot of problems, not just for auditors like my company, but also the companies who are trying to get these done. And having a list, even if it's. And I don't think that the way it's written currently, I think it's ambiguous because things are changing so quickly.

But just having a list where there's some transparency, because at the moment it's a little bit of the Wild West and just having a place where auditors can put their Name, put contact information and people can look them up. I think it's going to facilitate business, actually. I think that it will build trustworthiness.

And examining it, it didn't feel like it was too much. It didn't feel like it was too prescriptive, at least from our perspective, I.

Will say, I mean, we are trying to, in all AI bills, as you describe, the industry is changing so rapidly. And so you, in all of these bills, we're balancing the need for trust and safety with the ability to write legislation that will pass the test of time.

And so there is some, to your point and to his point, there is some, you know, what are industry best practices? They are starting to emerge. Even I would say in the last year we were seeing a year ago, I think there was less clarity around what AI auditors were supposed to do than there are now.

And so, you know, as those come forward, I think it is important that the state says, you know, these are the people who are meeting those standards and you can trust that these are the auditors who should be doing the work that California wants done.

But I appreciate the comments and, you know, as we move forward, are happy to look at how we can do better, to make sure that we are working, continue to working with industry. Because as you can tell, that is how we've come to the point we're at with this bill.

One, one way, one suggestion could be we do have a State Auditor. They're pretty overworked. We should actually, this is the one area of the budget I would absolutely invest more in. The State Auditor, the comptroller's office as well, is supposed to have an audit function, hasn't actually been resourced since the 90s properly.

But perhaps we ask the State Auditor to create a working group and dialogue with the stakeholders and the industry and then come back to this Committee with a set of criteria.

That way we then could look at those criteria, the industry could look at the criteria, everyone knows what they're getting, and then perhaps create a registry around those criteria. But right now it's, it just seems very broad. These are topics that people would want to look at.

But what would be the, what's, what's the standard for getting in the club? There's no standard, but there's a club that we're creating. And so I absolutely think that we need to do this, and I think California needs to be at the forefront of this.

A lot of this work is done out here, and we already have a framework in place for a lot of these issues. I Just worry about the side effects. I wouldn't want us to create a monster because I don't think that's what you're intending.

But maybe we task the State Auditor with coming up and coming back to this body within a time certain with a framework with criteria.

I do. The State Auditor I agree is one of my favorite functions as well. So I think we should all be investing in more state audits. But yes. So I appreciate that comment. Any other questions from the dies any other Members?

I do have questions. Mr. Patterson mentioned industry or professional organization trade groups. I mean I'm familiar I did financial investor relations for many years in my prior life and there's a financial standards board and you know this. I mean there's the American Bar Association. I mean they establish professional standards and criteria.

So I just wonder if this is not prescriptive enough in terms of years in the industry technical knowledge and because it is evolving is there a way to allow for those criteria qualifications to be incorporated or just they will come type of thing?

It's a great question and I will follow up with all the amazing experts that we've been talking to about this Bill because I appreciate it. I have to say I'm surprised that I'm getting the more prescriptive from my.

To work in progress.

Yes. Yes. So I will definitely take all this feedback. As I said to you walking into this hearing, I think I love Committee hearings. I think this process is incredibly important and raises things that often you don't hear prior to sitting at the dais. So happy to take all this feedback and continue to work.

So I appreciate that if we get out today. Of course. Okay.

Do we any other comments? Do we have a motion? zero, move the Bill.

Second.

Second. Do you want to make a closing comment?

Respectfully ask for your aye vote. Thank you very much. Go ahead.

[Roll call]

Okay, the vote was 5:1. Is it? Keep it open. Keep the roll open. All right, I pass the chair. Back to the chair.

Oops, my mic isn't on prior to. Mr. Lowenthal, do we have a motion on the consent calendar? Thank you to a second. Thank you. We'll call the roll on the consent calendar.

For the consent calendar. The motion is due. Pass to the consent calendar. Bauer-Kahan. Aye. Bauer-Kahan. Aye. Dixon. Aye. Dixon. Aye. Berman, Brian. Demayo, Demayo, aye. Irwin, Irwin aye. Lowenthal. Aye. Lowenthal, aye. Macedo. Macedo, aye. McKinner, Ortega, Patterson. Patterson, aye. Pelleran, Pellerin, aye. Petrie, Norris. Aye. Petrie-Norris. aye. Ward, Wilson.

The consent calendar has been adopted, but we will leave the roll open for absent Members. The vote was 10:0. We'll move to AB 2 when you are ready, Mr. Lowenthal.

Thank you, Madam Chair, members. Madam Chair, is it okay if I use Prop. Yes. Objection. Very pleased to present AB 2, which will hold social media platforms accountable for the harm that they cause to children and teenagers.

This legislation would impose financial responsibility on large social media companies if and only if their own negligence has been proven in court. I would like to start by accepting the Committee amendments and thank the Committee staff for their work and thoughtful analysis on this Bill.

I find myself compelled as a parent and as a Legislator to bring this piece of legislation back. Because despite the Legislature's diligent efforts to thoughtfully address the harms and negative impacts that social media platforms have on the mental health and well being of children and teens, we are struggling to hold the platforms accountable through regulation.

Children, parents, researchers, doctors, regulators, lawmakers alike have clearly delineated the problem. Social media platforms are causing untold harm to our kids. What's worse is that the platforms know that their product is harmful and addictive exposed.

Internal studies and documents have revealed that Meta, TikTok, Snapchat, are all undeniably aware that they are exposing children and teens to addiction and harm. But our pleas for social media platforms to self regulate have gone unanswered. Our attempts to regulate the platforms are being challenged by the platforms and their trade associations in the courts.

And the public, meanwhile, is demanding action. And this is why AB 2 is so critically important. Unfortunately, social media platforms continue to deny that their algorithms and design features are contributing to these harms. In fact, some platforms seem to be flagrantly ignoring what the problem we have identified by actively rolling back what little safeguards they previously offered.

Earlier this year, for example, Mark Zuckerberg announced that Meta would be getting rid of fact checkers, the platform's human based content moderators, dialing back automated content filters that flag and limit the dissemination of false and harmful content content.

And we'd be replacing those safety features with a community notes system where users will determine the veracity and potential harm of posts and content.

The video statement issued by Zuckerberg in conjunction with Meta's announcement, he noted, in regard to the proposed changes and their impact on content moderation, quote, it means we're going to catch a lot less bad stuff. I don't think Mr. Zuckerberg could have said it any more clearly.

Meta's announcement is just the latest in a troubling pattern among social media platforms that consistently puts child safety second to maximizing profitability and shareholder value. California and this Legislature are not alone in our concern.

The Federal Government, along with multiple states and many of our allies overseas, are actively seeking ways to hold social media companies accountable for the negative impacts their platforms have on the well being of children and teens.

Recent congressional hearings and an alarming number of studies point to the negative impact social media can have on a child or teen's development, mental well being and health. More must be done, and fast.

Last year, one of the opponents of AB 3172, which was the previous version of AB 2, described the Internet, and by extension social media platforms as a mirror that reflects the underlying harms and ills of our society. There is some truth to this description, but I think a more apt metaphor to describe social media is that of a bullhorn.

Like a bullhorn, social media has the ability to both amplify and distort social ills and harms. There is no other outlet in existence that allows individuals to disseminate information, true or false, good or bad, help for harmful to such a wide audience.

With so little oversight and accountability on a social media platform, we have no guarantee that the information we're receiving is true and accurate. And if it turns out to be false, misleading or leads to our harm, we have little to no recourse. And that's just how the platforms want to keep it.

A reasonable person would not suggest to a child that Anorexia is a good weight loss solution, that steroids are a good way to build muscle and get fit, that driving at dangerous speeds to impress your friends was safe, that choking yourself until you were able to pass out was a good idea, that self harm or suicide were good ways to deal with depression.

Doing so would not be exercising ordinary care. Well, the proprietary algorithms and design features used by social Media platforms are full, fully capable of and have done exactly that. They drive children and teens to harmful content, encouraging them to engage in dangerous and sometimes life threatening behavior.

While social media companies may not be the publishers of harmful content themselves, they're the creators of the algorithms that push this harmful content onto the screens in our kids hands. And this is a failure to exercise while ordinary care. Social media platforms can and must do more to protect our kids.

AB 2 will hold social media platforms accountable for their failure to exercise ordinary care that results in harm to children and teenagers. AB 2 does not change California's underlying law or the burden of proof in court required in court.

What it does do in response to the damage knowingly and admittedly being done to an entire generation of children by just a handful of companies that are earning unbelievable profits off our children and teen users is apply appropriate financial incentives and accountability to prompt these few companies to be more careful and responsible partners.

Especially when it comes to children. Our top priority must be ensuring our children are safe and secure offline and online. I don't need to tell you that millions of teenagers and children turn to social media apps, their primary form of social interaction and communication.

I don't need to tell you that they're online on average 5 hours per day, every day. It's imperative that we are safe that they are safe in doing so. I, like many parents, have skin in the game here.

As a father of three daughters in the age of social media, I see firsthand the dramatic impacts and influence these companies have over my children's well being.

As a former social media company shareholder and somebody who has spent a career in the tech industry, I believe the potential for these companies to promote the healthy development of our youth and be a benefit of all users.

But as a parent and as a Legislator, it's my responsibility to stand up and demand accountability and real action when they claim they want to protect our youth. So I should make myself clear at this point I am not against social media.

In fact, as a parent of young children, I see the positive effects on most social media tools can have on connecting young people. I just want social media companies to much more vigorously step up to the plate, be responsible partners that take safety and well being of our children as serious as they do their profits.

AB 2 will help make social media companies more responsible for their own algorithms and actions that affect our kids and more accountable when there is proven negligence. Again proven in court. I'm pleased to be joined by Amy Neville and Nicole Rocha who are here to testify in support of AB 2.

Thank you. Two minutes each. When you're ready.

Thank you. Good morning or good afternoon. Chair, Mayor Kahan and committee members. And familiar faces. Hi.

Will you move the mic a little closer just so we can all hear you? It come to me this way. It will.

Thank you. I was reading the note, do not lean on the glass. And so I was trying not to do that. I was trying to follow the rules.

So I come before you today as a grieving parent sharing the story of my son, Alexander, who was just 14 years old when he tragically lost his life to a counterfeit oxycodone pill containing fentanyl.

This pill was sold to him by a drug dealer who was able to gain access to him through Snapchat, a social media platform that has repeatedly failed to protect its young users. Alexander was a bright, curious child with many interests. He loved to skateboard. He loved American history. He was a Pokemon encyclopedia.

He had just become a little entrepreneur that was selling off his childhood toys on ebay. And he was really good at it. But what should have been safe exploration of the world became the gateway to his death. Like many children, he had access to Snapchat, an app that was meant to connect him with friends.

Ended up connecting him with drug dealers. This platform, through its ephemeral messaging, allowed dangerous connections to form without any meaningful safeguards, putting my son in harm's way. Snapchat, along with other platforms, prioritizes engagement and profit over the safety of our children. Despite knowing the risks, they continue to operate in ways that enable drug trafficking, abuse, and exploitation.

My son's death is not an isolated incident. It's part of a pattern that has been repeated thousands of times across our country. It is a direct result of their failure to take responsibility for the harm their platform facilitates.

If this were an airline or a car company causing so many deaths, there would be public outrage, investigations, and accountability. Yet social media companies are allowed to continue their operations with zero consequence. AB 2 is essential because it forces platforms like Snapchat to face the consequences of their inaction.

The heightened penalties and statutory damages proposed in this bill are necessary deterrent to prevent future tragedies. No parent should have to bury their child because a social media company failed to exercise ordinary care. I urge you to support this bill not just for Alexander, but for every child that is at risk.

Thank you for your consideration and to Assembly Member Lowenthal for championing this important legislation.

Thank you so much, and we are all so sorry for your loss. May his memory be a blessing.

Good afternoon, chair and committee members. My name is Nicole Rocha and I'm here on behalf of Common Sense Media. Every person in California has an obligation to avoid reasonably foreseeable harm to others. This is the common law tort of negligence and it's codified in the Civil Code.

Social media companies are already subject to this statute and are litigating cases under this section in both state and federal courts. Unfortunately, the actual damages plaintiffs have traditionally been able to prove in these cases have not been high enough to deter harmful behavior by some of the most profitable companies in the world. AB 2 is simple.

It builds upon existing law and creates enhanced financial penalties for large social media companies who have breached the ordinary standard of care and caused harm to children through their negligence. The opposition today will argue that ordinary care in this context is ill defined, making it inappropriate to subject them to increased penalties.

They will argue that this bill is unconstitutional content moderation and that this bill is preempted by Section 230. These arguments are nothing more than a red herring by an industry seeking to ensure that their liability remains disproportionately disproportionately small compared to their profits.

Social media companies fail to meet the standard of care when they have reason to know that their products are harmful, but fail to mitigate that harm. Whistleblowers Frances Haugen and Arturo Bejar have shown that these companies have knowledge of how their products harm kids, including increased risks of depression, anxiety and suicide, but choose to do nothing.

And changes to social media platforms we have seen rolled out overseas in response to demands that they mitigate harm show that these companies know exactly how to protect kids but won't do it unless forced to.

The opposition will argue that this bill is content moderation that will ultimately subject kids to surveillance and shrink the universe of information available to them. But this Bill does not moderate content. Which brings me to Section 230 which provides specified immunity for publishers of third party content.

It does not provide immunity for all business decisions such as features the platforms choose to offer to the public. Courts are trained and accustomed to determining whether a claim is barred by the First Amendment or Section 230. And nothing in this bill will stop that. We need to entrust courts to do what they do.

This bill is simple. It creates right size penalties for kids well being. Sorry. It creates right size penalties to ensure kids well being is acknowledged by social media companies as required by existing law. It deserves your I vote. Thank you and I'm happy to answer questions. Questions.

Thank you. Anybody else here in support of this bill. Come on up. Name, position, organization.

Good afternoon, chair Members. Sam Nash, on behalf of the Los Angeles County Office of Education and Support. Thank you.

Good afternoon, chair Members. Ken Wang, on behalf of the California Initiative for Technology Democracy, product of California Common Cause, in support. Thank you.

Mikey Hoi, on behalf of Common Sense Media, proud to sponsor this Bill. Thank you.

Xavier Maltese with the California Charter Schools Association in support.

Thank you. Do we have primary witnesses in opposition to this bill? Come on up. I'm seeing three of you. Is that okay? Thanks for fighting it out. I appreciate you. They really ro cham beaud for those not in the room, two minutes each. When you're ready. Thank you.

Good afternoon, chair Members. Robert Boykin with TechNet. How's everyone doing today? We are respectfully opposed to AB 2 TechNet, and our Members agree with the author's goal of protecting children online. Our members have been at the forefront of these efforts, creating new policies, tools, and features for users and their parents to exercise greater control over their online environment.

We are, however, opposed to this Bill for a variety of reasons. The parent goal of the bill is to incentivize platforms to change how they operate. We assume that they're referencing operations related to user content and the features and the features platforms use to organize and deliver that content. But this bill doesn't target anything specifically.

The bill simply acknowledges a platform's general duty of care and then sets high statutory penalties for failure to meet that duty.

We read the statutory penalties in this in the bill to apply to all claims against social media platforms by a minor, including, for instance, a claim by a child that trips and falls during a tour of one of our company headquarters or a child injured in a car accident with a platform employee.

We do not think this is the author's intent, although we certainly understand the difficulty of drafting a bill to be specific to user content and its related features. If the intent is to apply these penalties to claims focused on content and content delivering features.

We believe the bill runs afoul of both Section 230 and the First Amendment, we believe this bill creates a strong incentive for plaintiffs to sue social media platforms on the basis of user generated content and content serving features.

Due to the vagueness of what might be included in a duty of care, platforms will have to take drastic actions to try to limit your liability, including by limiting or removing access for persons who are under 18 years old. This is a bad outcome from teens and has negative implications for the First Amendment rights. For these reasons, we are respectfully opposed to AB 2 thank you.

Next witness, Becca Kramer Mauter with Kaiser Advocacy on behalf of the Electronic Frontier Foundation. In respectful opposition to AB 2. Californians do not agree about what content is harmful to children. And it's not hard to see how AB 2's combination of a vague harm standard and statutory damages will result in censoring a wide swath of online content for everyone.

For example, thinking back to last year's bill on tackle football and the wide growing body of evidence showing that tackle football may cause severe and fatal brain trauma to young people, an online service that provides information about high school football, including permitting users to discuss games, could be considered in violation of AB 2 legal standard by failing to protect children from harm.

Claims that discussing these activities online harmed a child would come with a risk of court imposed penalties for the online service, giving them a powerful incentive to censor anything related to tackle football. And the censorship would not just be related to tackle football. AB 2 incentivizes filing lawsuits against services for speech about anything a person may find objectionable.

The risk of such lawsuits would likely push these services to restrict access to content that many children may benefit from accessing, such as medical, reproductive health and LGBTQ information. But it's not just children who benefit from having access to this information, adults do as well.

And this widespread censorship will be a big problem for every Californian attempting to access information online. The government cannot enact a law that forces online services to steer clear of conversations about controversial or benign topics, the overwhelming majority of which are protected, specifically speech.

The government also can't set up a legal regime that allows anyone to seek to censor speech they disagree with or view as dangerous. AB 2 unfortunately, will not reduce online harms to children and will likely be struck down as unconstitutional. And for all these reasons, Electronic Frontier foundation must respectfully urge the Committee's no vote on AB 2.

Thank you. Anybody else here in the room in opposition? I know we have one more because he didn't have a chance to speak. So anybody else as well, obviously.

Thank you. Aiden Downey with the Computer and Communications Industry Association in respectful opposition. Thank you.

Thank you, I'm a lot Shorter. Ron Deami on behalf of Cal Chamber, respectfully in opposition. Thank you.

Thank you. Seeing no additional witnesses in opposition, I'll bring it back to the Dais. Questions? Comments?

Okay, so, Maya, we can start with you.

So when I first went through this Bill, I was opposed. I then met with the author, and I'm now very open minded. I understand what the author is trying to do in terms of responding to some of the real problems that we're seeing with the use of social media.

But we have to make sure that we assign the blame for those problems to the right parties. And I don't want to kill the goose that laid the golden egg. I mean, social media has a lot of great benefit in society. The author has already accepted an amendment. Can someone explain who's got a law degree?

What is the, what is the benefit by changing the language in the Bill from breaches, its responsibility of ordinary care and skill to just simply by causing injury? And does that get to the point that you're raising about divorcing these companies from third party generated content?

We'll start with Mr. Chair.

My witness answers this question, Ms.

Richa.

So it more closely aligns with the elements that you would have to prove in a negligent claim in court anyway. And I know this has been referred to Judiciary next, so I'll just quickly go through them. You need to have a duty from one person to the consumer or the child.

There needs to be a breach of that duty. There needs to be harm, and there needs to be causation showing that it was the breach that caused the harm. And that's just normal negligent law, negligence law.

It may actually depart from negligence law if we said that you only had to have a breach but not injury or harm. So it actually just more closely aligns with how this would be presented in.

Court and the opponents, specifically on the third party content issue through the chair, please.

Yeah.

That's a good question. I have to take it back. And I can get back to you on that one.

because I would like to clarify, you know, what does the social media company have to have done to have responsibility? And maybe that's one area where we could provide a bit more consensus building here. Maybe we define it as causing injury through their own action of gross negligence and reckless misconduct.

But I'm going to leave that to the experts because this is part of a process. The second issue I have with this Bill is the potential, great potential for the proliferation of shakedown lawsuits and frivolous litigation when we have private right of action.

And so perhaps if we narrow at least in the initial phase to perhaps the Attorney General or the District Attorney or maybe even a city attorney. Cause they deal with, you know, felony wobblers sometimes, but folks who could be given more responsibility to truly assess whether there's misconduct here.

So private right of action, any thoughts on eliminating that or narrowing it down to a government?

Assemblymember, first of all, I want to appreciate your and recognize your openness on this Bill and for meeting with me and having an open discussion on this. And I think that your questions and comments are truly thoughtful.

I want to give you a little lay of the land on the genesis of this Bill because we brought it back from last year. This Bill made it through the Assembly Privacy, Assembly, Judiciary and the Assembly Floor and went through the process in the Senate Judiciary of going through amendments and negotiations.

And that was all done working in collaboration with Chairman Umberg. And in that process, there was actually a shift from a private right of action. The Bill was amended to public prosecutors only. And my commitment to this group is because there are multiple Members who brought up the same topic.

What's a better way course of action is a private right of action or public prosecutors.

And we are going to continue to have those discussions as this Bill goes forward and lean on the expertise that we have within our body and the Assembly Judiciary and their chair and the Senate Judiciary and their chair and lean on their guidance as the best way to go on that. So those discussions will happen.

Assemblymember, I will also take this opportunity to let you know that myself and the Bill sponsors met with Chairman Umberg prior to kicking this off again to ask should we start where the Bill ended or should we start where the Bill began?

And he was very confident that we would be able to have the same level of discussion negotiations as it goes on. And he, his counsel was to start as it began. And so here we are.

So I know that the other issue that you brought up was Section 230 having an override here and then the potential for unconstitutional, basically the Bill could be deemed to be unconstitutional. That might happen, it might not happen.

But I would encourage the opponents to work with the author of the Bill to make it as good as possible in the coming weeks. And I will be a yes vote on a Bill that I don't quite support at this point just to move it through the process. I know it's going to go to Judiciary next.

And I would strongly urge the opponents to come up with some ideas on the issues that you think could improve the Bill.

Thank you, Mr. Deo, Ms. Petri North.

Thank you, Madam Chair. And so I want to start by thanking the author for all the work that you've done in your time in the Legislature as you're trying to tackle what I think is one of the biggest challenges facing us as parents and as a society today.

And I think that there's broad agreement, broad agreement that social media has been pretty terrible for our children. Everything from growing mental health crisis to increase in eating disorders to the fact that platforms are selling or being used to sell illicit and deadly drugs to teenagers. And I've actually worked with Ms.

Neville on legislation in my time in the Legislature to try to crack down on the sale of illicit drugs on social media platforms. I, as I shared with you, have similar concerns around the inclusion of the private right of action.

And so that is something that I would like to see fixed in this Bill in order for me to support it. But. But I guess I.

Then I want to turn my question to our representatives from the technology and social media companies, because as I said, I think there's wide acknowledgement from the public and from us as legislators that your platforms are harming kids. Whether that's the intent or not. Bad things are happening to our children.

And I feel like as we have these conversations, there's a certain acknowledgement of that. But every solution that's proposed, whether it's by Mr. Lowenthal or by the chair or by any of us, hits a brick wall.

And we have yet to land on a place where there's an alternative that you say, yep, this might not be something we love, but we're not gonna take you to court over it. And so I guess I would just ask, what can we do if this Bill isn't the answer?

And I hear you saying loud and clear that it's not the answer. And as I said, I'm not even supporting it in Committee today. But what do you have to say to parents like Mrs. Neville?

You know, parents like all of us who look at what's happening and desperately feel like we have got to do something and we've got to do more. So if this isn't the answer, what is the answer?

I think that's for technet.

I will say that I don't specifically have the answer right now in my. Back pocket, but I will assure you. That I will put in the work necessary and the time necessary to try to move and try to get to a good place on this Bill.

As always, we'll work with the author's office as the Bill moves forward. As far as the answer for your specific concern, I'm sorry, I don't have one. Okay.

I think all of us would love to have a better answer to that question because like I said, I'm not even supporting this Bill in Committee today.

But if, if the industry is unable to give us a better answer than that, then you give us no place to go than to support every proposal that comes before this Committee.

And so I think that, I think that you all need to engage your Member companies in a very urgent and very genuine way to find a better answer. Because we were working on legislation together a couple of years ago, and I don't think much is. It doesn't feel like we've made a lot of progress since then.

And I would really ask that you get back to me and my office and any of the other Members who are interested with a more concrete proposal about what we can and should do to limit the harms for our kids on social media. Okay, thank you.

Thank you. And I will just add onto that, Ms. Petra Norris is one of the newest Members of the Committee, but those of us that have been on it for six plus years have yet to hear an answer to that question. And so I would advise you to get back to all of us.

I think both parties would be interested in knowing how you intend to protect children, since we've seen nothing but nos and then lawsuits out of what has happened in this Committee. And I know EFF is up there for a different reason, which I don't know if.

Can I respond first?

Would you like, Ms. Crowder? Sure, go ahead.

Yeah. Thank you. Speaking not as one of the platforms, but coming from community that's caring about privacy, that's caring about our rights online, what, what our communities have been saying for years is that the way to get at these problems is to protect privacy for everyone online.

That, that instead of dealing with kind of the symptoms that we see above, a lot of these issues could be dealt with by getting at the root cause, at some of the root causes.

And it's not going to solve all of the problems, but there are ways to protect everyone's privacy online that will reduce a lot of the harms that we are seeing to children and to adults on social media. And I think that that's, that might be another place where our organizations are in disagreement on these.

But that is what we would propose from Electronic Frontier foundation and some of the other privacy groups that have engaged on these types of bills in the past.

Thank you. Mr. Can I go to Mr. Patterson? Mr. Patterson, you are up.

Now. I'm going to use this, this microphone here. So I'm like in the wrong seat. First of all, I want to Acknowledge, you know, Amy and you know, Alexander. I, you know, the reason why I became so passionate about this issue is.

First I ever heard of fentanyl was when I went to a press conference that two parents, two neighbors of mine when I was on the Rockland City Council, Laura Didier and Chris Didier, they lost, you know, their son Zach to, to, to fentanyl poisoning.

And so ever since that time I've had several pieces of legislation signed into law. And, but you know, similar, similar. You. Know, issue in terms of what I saw through a social media platform at that time and so appreciate the advocacy.

You know, I'm, I'm a parent of four and you know, I think actually my kids are in a much better position because of people like you. It's given me an opportunity to educate them on the harms of fentanyl in particular, but other drugs, you know, and how to be safe. I actually had a great conversation.

My oldest kid is 12 and the conversations I've been able to have with him and my 10 year old daughter about the risks that are online. And you know, I recently had this conversation about caffeine, by the way. I guess that's like a big deal now for athletes in high school.

I don't know what these kids are getting into these days, but you know, it's this, the advocacy from parents like you have given me an opportunity to really address issues with my kid that I don't think was around, you know, when I was a child.

So thank you for being here and kind of reliving, you know, I know your, your harm on a regular basis. I know that's hard and I appreciate you being here.

I want to say last year when this Bill came through, I remember walking through the door and one of the opponents at the time was like yelling at the Committee Members. I'm sure it was like the most memorable Committee meeting I had ever been in, ever. And I, like Mr.

DiMaio, I came into that hearing actually opposed to this Bill and I think the longer that went on, I changed my position. Not just because I felt like we were disrespectful, by the way, live tweeting about comments we were making. I was, I mean this person was.

But also it, the, the testimony I think really kind of swayed me the other way. And a lot of that was around free speech and censorship. And I know those points came up again and I, my point, my view at that time was that this Bill does, in my view, of course, everybody have different opinions on this.

Does not tell social Media companies, what they can and what they can't doesn't change what the algorithm can say, you know, but sure, it may change the incentive structure on what can be out there. I'm incentivized to do and not do certain things all the time in this building.

In fact, because there are certain incentives for things that I say and do. I don't look at that as a violation of my free speech. I look at it as the incentive structure in this place is such that I don't say certain crazy things that are on my mind. I'm trying to take a page out of Mr.

Demyo's book sometimes, but I do, you know, I've thought a lot about addiction. I think human nature is to be addicted to something. I mean, when I was a kid, it was like Nintendo or when AOL came out, like, that was the deal, you know, remember the 56k modems and all that. But it's before. He does not.

He does not. But I'm just saying I don't. I don't actually believe that social media companies are responsible for addiction of children. I think it's an inherent thing in human nature. But I do think that there's a level of responsibility out there when a platform is really not doing what it's supposed to be doing.

I do think Meta was mentioned on occasion, and Facebook, I do think they're actually implementing some great tools right now for people that really separate themselves out from other platforms that have been mentioned that we all know is happening.

What drives me crazy about some of the other platforms is like, we all know that this stuff is going on. And I've met with the, you know, lobbyists and government relations people with all these companies, and it's like, it continues to happen. And it's like, well, when are we going to address this?

When are we going to do something about it? And it just seems like nothing is ever happening on certain platforms. And so that makes your job difficult because you have a bunch of different companies, a bunch of different interest levels. You have some companies trying to do the right thing and some companies that.

That I honestly don't think are so. So that makes it really difficult to come up with a solution. But what I do know, and happy to support this Bill and join with you, Mr. Lowenthal, moving this Bill forward and the high. I think we, you know, the highest level of authorship you'll let me have.

But we continue to work on this Bill and take in feedback in terms of. Because I am concerned about shakedown lawsuits. You know, lawsuits that just get filed, like Ada type lawsuits. I do have some concerns on that.

I know that you don't want that either, but there has to be some level of responsibility when, you know, there's a problem. I was on one of these platforms the other day and a person is like openly selling drugs. And I reported it. This was last year. I reported it.

The platform did nothing about it other than the sin break violation. I reported it to my friend who works at the FBI, you know, because it was going through the postal service. So there's got to be some responsibility out there. If somebody died from that drug, I reported it and the platform didn't do anything. So.

So anyways, thank you for listening to my TED Talk and I'm looking forward to supporting it and continuing to work on it to make sure it gets to a place to where the true the responsibility for perpetuating lethal conduct, that there's accountability behind it.

Madam Vice Chair, that's up to you. We're next in line.

Okay. All right. Thank you, Chair. Assemblymember Lowenthal, you have this has been a special project of the heart and mind for at least the last two years, if not three years. And I will be supporting the Bill. And Assemblymember Cotti Petri Norris, your comments were certainly appropriate. I mean, this type of.

And you've been carrying these bills for a couple of several years. You say six years. So there's been repeated efforts to slice and dice this issue that's so obvious to so many people that and there have been books written about the impact on children that what they're seeing and doing on social media.

And we know we can't just ban social media for obvious reasons. So how can we make it work? Protect privacy, protect freedom of speech, but identify the cause of mental illness, social anxiety, other bad behavior? It's beyond just drugs and fentanyl. I mean, I've been working with families in my district.

A mother lost her son, same identical situation on one of the platforms, and her son bought a pill and took it and was dead the next day. And she's been this was 20, 25th year anniversary of his death on a social platform. So there's more.

What makes this difficult in my mind, is there are more harmful activities that come from the social media platform, whether it's selling of drugs or illegal activity or just corrosive behavior. And you've been looking at this and I respect all the hard work you've put into it.

I wish that there and I know you've talked with the platforms or you both have. I wish that there were some solutions that they could work with instead of falling to the Section 230 in the federal Communications Code because that should not protect anyone from bad behavior.

We know that the platforms can get in and say something is disinformation or misinformation. They were able to do that through human intervention. So I don't know why this is such a stumbling block.

But I'm wondering, though, on the private right of action or the stiff fine, is there a occurs to me, is there a curing mechanism that if someone identifies a problem, a hurtful, harmful activity, that even if someone has died, that the platform must remedy this situation within 24 hours or something like that? Has that been explored?

Yeah, I want first of all, thank you Assemblymember Dixon. And all of us have Members in our districts that are suffering or have endured unspeakable tragedy and are demanding relief and crying for relief.

And so I feel for the constituents in your district that have spoken out about this, I want to make sure I want to level set this to some degree so that everybody understands this is not changing the existing law at all. Private right of action today is the existing law.

There are cases moving forward today, right now, literally as we speak, what this Bill does, it sets a damage level. Think about when you're flying on an airplane, the old tickets that you used to have, and it would stay in the fine print, the the levels of liability of the damages associated with negligence.

And think so much today about how much an airplane and an airline goes through safety standards and checks to make sure that the clients that are on that airplane are not going to be unsafe. That's standard duty of care. There are damage levels set for those airline passengers.

All this is doing is saying these products that our kids are spending five hours a day online.

I'm going to keep saying that over and over again because for those of us who limit our kids and keep them at two hours a day online or less, think of all the children that are spending 8910 hours in line.

Think about the parents that are working 2 and 3 jobs to make ends meet and how much their kids are being influenced by all the things that we're talking about here. So we are definitely open to having conversations about the things that you're talking about. About Summit Member Petrie Norris, speaking about Mr.

DeMaio in changing the existing law specifically for this, which is what the ask is, because current law right now, there is no change. There's nothing. And that's a big Jump. And what I'm saying is we are open to having a discussion on the big jump. So we'd appreciate your consideration as for moving the Bill forward today. Okay.

That's a good answer. Thanks.

Thank you. I actually do need to depart, so, Mr. Ryan, if you don't mind if I just say something before I have to leave, I want to thank the author for this. I think I was having a conversation with a colleague earlier about age appropriate design, which Ms.

Wicks is not here, but was a Bill that this was signed into law in California years ago. I want to be clear that age appropriate design as a list of functions that protect our kids should have long ago been done voluntarily by these companies.

There is no reason that these companies could not do every single thing in the age appropriate design Bill that protects our kids from being commodified and from ending up as your dear beloved son did.

They not only chose not to do those things, they sued on the Bill and won so that they wouldn't have to protect our kids. They are choosing to run platforms in a way that harms our kids because our kids are a commodity to them. Our kids attention is what makes them money.

And that is why I have gotten to where I've gotten on these bills. Because I just don't know what to do to protect our children.

And to me, when I show up every day in this building and I go home and I sit down at dinner with my children, I need to look each and every one of them in the face and I need to believe that I did what was right for the most kids in California.

The most sacred duty I have here is to protect the children of California. And again, these companies could be making different choices and they aren't. And Alexander and kids like him are paying the ultimate price. And there are too many kids like your son.

Just in this room, two people know someone who had the same experience on social media and ended up losing their lives. And so I agree.

And I want to say that a lot of what was said by the opposition, as a former litigator was confusing to me because if you bring a case that is spurious because it violates the First Amendment, and I'm not saying that doesn't happen. It happens.

That is, our courts are set up to dispense of those cases in summary judgment. There is a process by which you can say, this case has no merit, it needs to get thrown out. Let's not go through the long process of trial. That's what would happen. Because this doesn't actually Say you can violate the First Amendment.

So may someone bring that case today? Yes, because as the Assembly Member says, you can bring a negligence suit today if you think someone has been negligent against you and the courts will dispense with those. The same is true of Section 230 as well. If it were to violate Section 230, it would be thrown out.

Nothing in this Bill would change any of that. But what it would do is it would say, you have to care. You have to care because we're going to make you pay if you don't. And I think that that is the law today, as far as I'm concerned.

And we had a witness in one of our hearings that talked about using these legal theories and they are being used successfully in some parts of the country. And this just ups the ante in the way that we do in other sectors. So I think that this is an important approach.

I also think that age appropriate design was the ideal approach. But we are where we are with that. And so we will continue to do what we can to protect our children.

And I am glad to hear that today we will have bipartisan support for this Bill because I think this is one of those areas where we are so united in protecting our children and making sure that the state does right by them. And so I want to thank Mr.

Lowenthal for his work and I look forward to supporting it here and in judiciary charge. So, Mr. Bryan.

Thank you. Thank you, Madam Chair. I want to thank the author now having served on Privacy Committee for, for a session. I'm familiar with your work and the things that you've been consistent on trying to address since you've been here and the various ways you've tried to address them.

Interestingly enough, Facebook was around when I was in school. MySpace was dead by the time I was in high school. We had already transitioned on to Facebook. The first Iphone dropped before I was out of high school. I remember the way social media encroached just in my life as a student.

I couldn't imagine giving 14 year old me Snapchat and all of the different things that are out there currently. It's a very complex and difficult time for young people to be trying to navigate the world.

And I think your experience as a father and the experiences of so many people that you've surrounded yourself by to better understand these issues are why, even if I don't know that this Bill will actually incentivize the changes that need to happen fully, I know that bills like this are the reason that you can't advertise certain types of ads to people under 18 even now.

Right. Some changes have happened because of this pressure. And I think in this building, you embody that pressure. And so while you continue to work through this Bill, I am proud and happy to support you in that effort.

Thank you. Mr. Bryant, any other comments from the dais? Yes, Ms.

Irwin, I could just echo what a lot of my colleagues have said already. I really appreciate all the passion that you've put into this issue. And it is extremely frustrating that we don't seem to be moving forward. And when we move forward, the courts knock things down.

So I think it is really important to be wary of the challenges that we're facing. Obviously, everybody's discussed the harms that social media has from drugs to pornography to self harm, the anxious generation. But obviously there's also a lot of good with social media.

During the fires, we were able to see exactly what was going on in communities where people were using it as a form of communication. So last year I supported the Bill with hope that there would be a consensus.

And then as it moved through the process, I personally thought that it was more reasonable to have the knowing and willing standard that Senate Judiciary put in. And then we're back with the pra. So I'm not going to support today. I think you have enough votes to get out.

And I really hope that as you move through the process that you get to that consensus, because I think it's really important on this Bill to have a balance. And then I would also admonish TechNet and the tech companies do these things voluntarily.

We see what is happening to our children and the mental health crisis that they're facing. And there is, you know, obviously you can sue and a lot of these bills have gone down because of First Amendment concerns. But I'm repeating what my colleagues have said. You are able to affect change, and that's really what we're asking.

Thank you.

Thank you. Any other comments? Do we have a motion? zero, yeah. Close. I'm sorry. Would you like to make a statement?

I would like to close. First of all, thank you for the spirited discussion. I want to say the compliments are more than just meaningful. They give me energy. It's tough fighting against $1.0 trillion industry to do something that seems so basic, which is making sure our kids are well and focus on wellness.

Is that such a crazy concept when it comes to our kids to focus on wellness? I'd like to make a few comments. First to the Assembly Member, Irwin. I appreciate your comments. So much there will not be consensus when it comes to inserting the language of that they are knowingly and willfully committing harm.

That makes the Bill no longer a negligence Bill, but a Bill about malice. And I for one, don't believe that TikTok, Snapchat, Meta are trying to hurt our kids. I don't think that that's their goal. I think there are very thoughtful, conscientious leaders inside those companies.

I think they're trying to maximize shareholder value, they're trying to make money and addiction pays. But I don't think that they're knowingly and willfully, and I don't know anybody who thinks that. And so that is not a compromise that would ever be considered out of this office. I want to thank Mr.

Patterson for joining as a joint author on this Bill. And I really want to commend everybody for having an open mind, bipartisan open mind as it relates to this. I want to comment on some of the things that the opposition, I think so eloquently stated.

They said something very important that we should have all really keyed into, which is they said that without removing liability associated with negligence, that that could mean that they have to stop social media entirely for kids under the age of 18. I don't know if you hear that the same way that I do.

That's a tacit admission that harm is being caused and they have no mechanism to make that change. And that's scary to me. That's frightening to me, because it's not just that social media is out there and available for kids. They're profiting from our kids. You know, finally, I just want to say this.

If there's anything worse out there than child committing suicide, somebody's got to tell me what that is. I can't think of anything worse.

But I want to go through some numbers with you really quickly from the CDC between 2001 and 202120 year span, this is the increase in suicide rates that correlates directly with the time frame that social media became so widespread. Suicide rate among people age 10 to 24 remained stable from 2001 to 2007.

Then after 2007 through 2021, it increased 62%. Suicide rate for people age 10 to 14 declined from 2001 to 2007 and then it tripled from 2007 to 2018 and has remained constant through 2021.

The suicide rate for people aged 15 to 19 did not change significantly from 20012009 and then it increased 57% from 2009 through 2017, and from 2017 to 21 it did not. So, you know, I'm certainly respect. You know, respectfully asking for your I vote to move this Bill forward today.

We are absolutely open to working with anybody and everybody, certainly the opposition and the best legal minds we have in this building to strengthen this legislation, because we have to do it. I don't see any other way. Respectfully ask for your I vote.

Do we have a motion? I'll move it. Second well, I was asking the second question. If there's anyone else, otherwise I will. Second let's call the vote. I'm sorry.

Position.

[Roll call]

60. We'll keep it open. All right. Mr. Lowenthal, do you want to stay for your next Bill? You have another? Wouldn't mind a bathroom break. Okay.

All right.

All right, we'll move to AB410. Wilson, we are going out of order. The chair had to leave and she kind of rearranged some things here. So we'll do AB410 summary. Member Wilson. zero, so this was number six.

Thank you.

All right, let's come to order. We will proceed with Assembly Bill 410 and then we'll follow that with Assembly Bill 1327. All right, if we could have quiet, please.

To the Committee trying to get your attention.

All right. We'll gradually get it quiet. All right, thank you very much. Assemblymember Wilson, please proceed.

Thank you, Madam Chair. Members, I'm pleased to speak with you today regarding AB 410, a critical update to California's bot disclosure laws.

This bill would ensure transparency and online interactions by requiring bots to disclose their identity up front, answer truthfully to any subsequent requests about their artificial identity, refrain from misrepresenting themselves as human, and allows for stricter disclosure laws to take precedent when applicable. AB410 is about transparency. It does not ban the use of bots.

It simply ensures that when Californians interact with bots, that information is disclosed. AI powered chatbots are everywhere. They handle customer service, provide healthcare advice, and even engage in political discussions. And in many ways, they have made life more convenient. But there's a problem. People don't always know when they are talking to bots.

This knowledge gap particularly affects vulnerable communities such as the elderly, youth, or individuals with psychological disabilities, who may be more easily deceived by chatbots. Today, bots account for nearly half of all global Internet traffic, and that number is expected to surpass human activity soon. Without clear disclosure, California's are vulnerable to AI driven deception and everyday interactions.

Back in 2018, California passed SB 1001, which only prohibits knowingly deceptive bots with an intent to mislead. Another person online for commercial or election related purposes. While an important step forward, this narrow standard fails to address the broader dangers of AI generated deception.

AB410 would simply would simplify the standard, making it unlawful to use a bot in online communication unless it made clear to the user that it is a bot. This Bill brings our laws up to date with the reality of AI today and ensures that digital deception does not undermine public trust. Other governments have already taken action.

Utah passed a law in 2024 requiring businesses disclose AI use and consumer interactions, and the European Union has gone even further, mandating AI disclosures, labeling AI generated content and addressing deep fakes. California should not fall behind. Every California has a right to know whether they're taking talking to a person or a machine.

AB410 ensures honesty and online interactions by making bot disclosure a simple common sense requirement because trust begins with transparency. I'd also like to thank the chair, although she's not here, and the Committee staff for their diligent work on this Bill.

And confirming my commitment to the chair that I will be accepting all Committee amendments, I'd like to introduce two witnesses, Angela Lee, Policy Director and National AI Youth Council, and Ken Wang at the California Initiative on Technology and Democracy, also known as cited Good afternoon.

My name is Angela Lee and I'm a junior in high school and a Director of Policy at the National AI Youth Council, one of the nation's largest youth led organizations advocating for responsible AI regulation.

I'm here to express my strong support for AB410 because I firmly believe requiring the disclosure of bot usage in online interactions is a critical step step towards creating a more trustworthy digital environment, especially for young people.

Studies show that nearly half of global Internet traffic today is driven by bots, meaning that students like me and my peers interact with AI daily, often without even realizing it. I've seen the issues with this firsthand. A close friend of mine was researching college financial aid and trusted a chatbot's advice on scholarship and deadlines.

It sounded official, answering questions just like a real college counselor would. Weeks later, she discovered the information was misleading and incomplete, causing her to miss a crucial deadline that impacted her future. Had she known it was a bot, she could have verified the details. But she didn't, and it cost her real opportunities.

This is the reality for students today. We're growing up in a world where chatbots can sound indistinguishable from real people. Imagine a student seeking mental health resources only to be met with an AI chatbot that lacks true human understanding or a high schooler reading election News unaware that AI generated content is shaping their views.

We deserve to know when we are talking to a bot before it's too late. AB410 doesn't ban AI. It simply assures that all students in Californians can make informed choices by requiring bots to disclose themselves. For these reasons, I strongly urge you to vote yes on AB410 to ensure Californians are not left up to deception.

Thank you, thank you.

Next speaker please.

Good afternoon, Madam Vice Chair. My name is Ken Wang, representing the California Initiative for Technology Democracy, a project of California Common Cause. We're proud to support AB410 as a productive first step towards combating AI generated myths and disinformation.

Cited was established to seek state level solutions to the threats that disinformation, AI and other emerging technologies pose to our democracy and today. Today's AI chatbots are designed to optimize user engagement, with the end product being an immersive conversation that becomes difficult to distinguish with that of a human to human interaction.

This immersion makes it difficult to accurately and objectively judge the information provided by these tools, exacerbating an already dangerous misinformation problem that is inherent in the design. One recent study published by MIT and OpenAI Foundation found that the heavy use of ChatGPT was correlated with increased loneliness, emotional dependence and reduced socialization.

California had previously passed SB1001 in 2018, which made it unlawful for a person to use a bot with the intent to mislead another person online for commercial or election related purposes unless that person disclosed that it was using a bot.

This law, while well intentioned, imposed an impossibly high burden for any person to bring a claim that explicitly and explicitly exempted providers of online platforms from any duty of care. To address the growing impact of AI chatbots, AB410 would update the Bot act to require a basic disclosure requirement that aims to interrupt the immersion of user interactions.

It does so by requiring all bots, including those relying on generative AI technology, to disclose that it is a bot before any user interaction and prevent the bot from misleading users about its artificial nature.

This disclosure requirement is a simple first step to help ensure that users are not misled when interacting with chatbots, and this Bill would also eliminate provisions that exempt online platforms from any duties under this law.

While section 230 may shield platforms from civil liability, courts are still deciding whether online platforms have a duty of care under theories of product liability, how disclosures and warnings are provided when users are being misled about its artificial identity is a product design type that could certainly fall into this category.

To be clear, the very basic requirements of AB410 are only a starting point for protecting the public against the harms posed by these systems. More robust policy intervention must be taken to stop the spread of AI disinformation, including giving the public the ability to hold companies accountable for the faulty design that harms users.

We Hope efforts like AB410 represent the first step of many to safeguarding our democracy and society against the harms posed by AI. The thank you.

Thank you very much. Any other comments from the audience in support of AB410?

Clifton Wilson, on behalf of the California State Association of Psychiatrists, in support. Thank you.

Mikey Hoi, on behalf of Common Sense Media in support.

Do we have any speakers in opposition? Please come forward if you have a primary speaker. You could come to the table if you wanted. Okay.

Hi.

Tracy Krusenberg from Oakland Privacy. We simply wanted to inform the Committee that after conversations with the author's office and the commandments that are proposed in Committee, we are dropping our opposition to the bill.

Very good. Thank you.

Thank you. Ronak De Lami, on behalf of Cal Chamber, we're actually not opposed to this bill. We don't have a formal position. I just wanted to say we have been talking with the author's office, we've been talking with the Committee. We greatly appreciate the conversations and the direction that the spill has taken.

Really wanted to thank the author for the amendment she already took in print and the Committee for their Work. We're looking forward to working with the author. We're reviewing the amendments and we look forward to continuing to work with her. Thank you.

Very good. Thank you.

Robert Bom, TechNet not in opposition. Echoing the comments from the Chamber, performing. Thank you.

Very good. Any additional speakers in opposition, please come forward. Seeing none, we'll bring it forward. Any questions from the dais, Ms. Pellerin?

Thank you. So under this bill, we would bots on social media have to disclose that they are a bot in every post and comment that they make or they'll be in violation of the law. Not every.

They have to disclose initially and then they have to, if asked, disclose again. So they can't lie, basically. So when they start, they say they're a bot, whether they're on social media, a website you call on the phone, whatever. But if any point you ask them the question, are you a bottle?

They have to say, I'm a bot versus like right now. They'd be like, zero, I was just playing earlier. I'm not. I'm really a human. You know, they play like they won't be allowed to play that game.

Okay, okay. And then just what. And if social media bots are covered under this Bill, how do we see this working with bots that are deployed by people in other states?

So if they're, you know, actually, I'm not sure, but my assumption is, is it would apply, because if it's showing in our state, then it would apply. But I'd look to the Committee for their Support on that. I mean, for their analysis on that. The current. Actually, the current law does.

Because, remember, this is an expansion of the current law, and the current law does work in our state and anything shown in our state. So I would assume it's the same parameters.

Any questions? Mr. Patterson?

I always assumed half the people I chat with on Twitter were bots or burner accounts. Is the intent of this Bill really social media? Or is it like if I go to some website to seek help and I'm.

It's. It's all expansive. So the intent is, is that when you're interacting with the bot, that, you know, you're interacting with the bot. The other day, not the other day, but last fall, before this, we came to do this Bill.

I was on a phone call with a bot and didn't know it till a few in, and then I realized this is not real. But that's based on my lived experience. If I was 15, I'd probably think I was talking to a real person. If I was elderly, I'd probably think I was talking to a real person.

But so the intent is to capture everything. The intent is to capture all non humans interacting with us, that we know that they're non humans. Whether it's social media on a website, you know, calling in doesn't matter.

Yeah, I think my concern is there are people out there, you know, as a hobby or whatever, you know, that are writing bots to respond not necessarily negatively, but also to generate information in response to social media inquiries or things like that. Highly doubt that those men and women out there doing that are.

Would be, you know, aware of California law. You know, they're sitting in some basement in South Carolina or something, you know, so I think it might be a little overly broad. I know what you're trying to get to. If it was limited to, like, my inquiries with my utility company or something, I'd totally be cool.

It would take action.

Just so, you know, enforcement would require someone to act and let me get to that section. But it's not just it would take someone to act on that and care that that person was providing information and that there was a lie related to that. And I'll find that in the. Okay. In the Bill for you. But.

But it's not just a random. It happens and you get fined. There is an enforcement mechanism.

Okay. So maybe I read DeMaio.

Lot of bad ideas or costly ideas are driven by good intentions. Sure. And I know that a lot of us would like to know, hey, am I talking to someone real?

But to be given a civil penalty for not disclosing that you're a bot or that you're using a bot seems to be a punishment in search of a benefit. I have a feature I believe on one of my social media accounts that replies to people automatically and says you can get the full video or whatever.

I mean the team put it together. I would not be in compliance with this because it seems to be an automated Carl DeMaio which is very scary talking on the Internet. And I wouldn't know. I wouldn't be in compliance.

I would disagree. It's defined. There's a definition of bot. There's a difference between auto. No, that's not a bot. It's a different. Well, I mean, I guess if you were tends to be me. If it's. If it's an AI generated curated response. So I thought you were talking about an auto response.

But if you have an AI generated curated response of your brain that you're attempting to be, then yes, if people did not know they weren't talking to you.

And so if somebody asks is this actually Assemblymember Di Maio and that bot said no, or if that bot said yes, then you would be in trouble if they said no. This is a response generated which most of them do have that disclaimer already and there is no law.

Well, no, but your law also requires it up front in the conversation and it starts out by saying hi, I'm a bot.

This is a consumer, an automated generated whatever in their initial response and most do that now it's whether they would continue to do that so fast.

I again, I'm always wary of, of good intentions. But then the practical implication for as, as Assemblymember Patterson points out, someone who may not be in California and be familiar with the requirements of our state.

So perhaps number one we could tailor it, narrow it down to kind of what sort of advice or information is so sensitive that you would want that disclosure that, that it would warrant that you know that it's a bot. If I go to A cruise line and I'm asking questions about various cruises. And it's a bot.

It might be convenient and cost effective and keep the price of my ticket down, but I don't know what sort of benefit I would get by knowing that it's a bottom.

The other issue is if we do go forward with this sort of penalty system, perhaps having a provision in the law that says that the company will, you know, should, if the company is warned, hey, you know, you have to be compliant with this law.

You have a bot, it's on the books that their first warning is free before they start getting, as it says here, $1,000 civil penalty per violation. I would assume that that might be per interaction with, with a human being.

That is current law now. So we don't tweak the law, we expand on what it applies to. And so I can't speak to that, but I can get that information for you.

Okay, so that's even more concerning that we would have $1,000 per civil violation. Per violation.

And just to note, that is current law.

So, yeah, me being a newbie here, I think there's a lot of laws that maybe we should go back and revisit, but I can't support it in its current form and.

But I'm going to commit to you to do some more research on this to see if there are big problems with bots and people not knowing that they're talking to a bot.

Thank you, Mr. Lowenthal.

Though I think I just jumped the line. I'm sorry about that. It's my colleague from Los Angeles. I will be very brief. I want to applaud the author for bringing this forward. I think this is very, very straightforward.

I just reflect on my own behavior and how different I feel when I'm talking to a human versus a machine. I tailor my behavior to that. I waste my time. If I'm trying to connect with a machine that doesn't want to connect with me.

I might do it as a matter of fact, because I don't know the difference under current law. And I would think that it's very beneficial to me selfishly, whether or not I know something is a bot or not. I see the technology changing exponentially in tech generations, which are three to four year cycles tops.

This is timely, it's critically important, very confusing to young people. And I thank you again for bringing this forward. I'll be supporting it today.

Mr. Bryan.

Definitely, you know, trying to reread the Bill analysis and get just a better understanding. I understand what this Bill does and I'm gonna test this out, see what's going on currently when I talk to my bank and others, are you a bot? And see what response I get.

What I am curious about though, is I'm trying to understand the social media interplay with this disclosure because I think that the way bots are used in that setting is distinctively different than a chatbot.

Is this intended to apply to chatbots or, you know, in the social media space where like, like I once just got smacked by Elon Musk and got just a ton of racist bots that had to have hit me because they could not have been real people based on the 15 digits after their name.

And like, would they have all had to message, I am a bot. I'm disclosing this in their response.

So I will say this is how this came about. Part of how this came about was an issue where we saw with a particular social media company that actually created people and did not created people in quotes, not real people, but created people and did not say that they were bots and they actually were people of color.

Like one of them was like a sassy black woman, you know, all that stuff. And acted like they were real and were communicating and engaging with folks like they were real human beings. And it was a social media profile.

So not only would it provide, it would be a social media profile as well as all generate AI generated content. You would have to know that that account, that whatever, that bot is not a real human being. And they'd have to disclose. So if you replied and asked, are you real?

They would have to say they were not real.

I love that I moved the Bill. Because I can't lie.

I do have a question. Yes, we all have experienced spots. Did you say earlier when we began that some bots don't disclose they are bots or they disclose they are human?

Yeah. Some generative AI, you can have a conversation with them and people have asked them, are you real? Of course I'm real. And that kind of thing. And even if they say they weren't at 1.0 they can change it up because that's part of the cuteness and coy of AI. They complain.

So this forces it to tell the truth if asked. So they can play the game like, zero, I'm this, this, this. But if you ask the question, they have to say what they are and that they're. Whether they're a human or not. Somebody. So a human being, I guess, could say I'm a bot.

But we don't have a law against that. But a bot can't say I'm a human.

Well, my own personal opinion is I wish we didn't have bots. I mean, when I see that something is being automatically responded to, I just. I guess I have to make a phone call to the 1-800-number or something.

Which sometimes when you do that, just so you know, because that happened to me, I just. To a bot. I called and then was talking to a bot for a bit, and then I realized, zero, my gosh, I'm talking to a bot, you know, and so had to bypass to get to an actual human being.

And to my colleague, Assemblymember Lowenthal's point is that you can tailor your communication.

So now when I know I'm engaging with a bot, I actually tailor it to be more specific in my words, because they could misconstrue more easily what I'm trying to say, especially if I use slang or something like that, because sometimes they know and sometimes they don't.

You can't express frustration or. What are you saying? But anyway. All right, so we have a motion to move and do we have a second? Second. Second. Mr. Lowenthal.

All right. Do you have a closing statement? I do. You know, for me, it's simple. It's common sense. Transparency builds trust. I appreciate Angela Lee, who's, like she noted, a junior in high school. This is my actual sponsor of the Bill.

And so I appreciate her work in working with my team and of course, the chair and Committee staff, who were very thoughtful in their analysis, as well as making sure we got the right language. And so with that, I respectfully asked for an I vote.

Very good.

[Roll call]

I just learned that my feature on my social media is. Would be considered a bot under your Bill.

The vote was nine to one. We'll keep it. We'll keep it open. Assemblymember Aguiar-Curry. Come on up. I know. Yeah. zero, thanks. All right. Assembly Bill 1327, Aguiar-Curry, if you'd like to proceed.

I would. Thank you, Madam Chair. Members, I'd like to thank the Chair and the Committee staff for their work on this Bill. I'll be accepting the Committee amendments. Today. Many of us experience telemarketing or door to door sales for large export expensive home improvement projects.

These sales pitches can be persuasive and consumers who aren't planning to make a big financial decision that day may not fully understand the consequences. Currently, consumers have the right to cancel home improvement contracts within three to five days, allowing them time to reconsider the sales pitch.

However, under current law, consumers only have the right to cancel these contracts by mail. This Bill ensures that consumers can cancel these contracts by email. With the Committee amendments, companies providing these contracts must also offer phone numbers to assist consumers as they navigate the cancellation project process.

This Bill is an important step to ensuring that the right to cancel is accessible and reflects the modern technology. I do not have a primary support witness witness with me today.

Lucabelle second.

And so I respectfully asked. Quick to the draw, would you like to speak? No. This is my. My brilliant ledge Director.

Zero, all right, Very good. Do we have anyone to come forward in support? Do we have anyone in opposition? I think.

Hi. Rebecca May with the contractor state license board. We appreciate the amendments the author's taking and remove our opposition to the Bill. Thank you so much for working with us and we'll continue to work with your staff on the bill as you move forward. Thank you. Thank you.

Very good. Any other comments in opposition? We'll move it to the dais. Move the Bill. I think it's been moved and seconded. Any comments? See now. Would you like to close?

I live in a rural town where mail can take days to get or dales to send out. So emails are really nice convenience. So thank you very much and I appreciate your vote. All right, let's. Let's vote.

[Roll call]

The vote was 110. We will keep it open. Great. Thank you very much. Thank you so much. All right, Assembly Member Lowenthal, would you. What? Yeah. Would you like to go back.

Hi. All right, let's go.

All right, we are on Assembly Bill 566. Assembly Member Lowenthal, please proceed.

Okay, thank you. Madam Chair. Members, I would like to start by accepting the Committee amendments. I appreciate the Committee's thoughtful analysis and work on this Bill. AB566 is a consumer privacy focused Bill that makes it easier for users to choose their privacy preferences from the start.

By requiring that web browsers and mobile operating systems allow a user to exercise their opt out rights across all online businesses they engage with in a single step, California Consumer Privacy act of 2018 gave California consumers important privacy rights, including the right to access, delete and stop the sale and sharing of their personal information.

The act intended to give Californians more control over their personal information. However, accessing these privacy rights through the most commonly used browsers can be very burdensome and time consuming.

Users would have to visit hundreds and hundreds of sites and individually ask each different site to stop the sale and sharing of their personal information if they're not using a browser that supports opt out preference signals. There are browser companies that offer this single stepped opt out feature. They include Mozilla, Firefox, DuckDuckGo and Brave.

Other browser companies which occupy 90% of the global desktop browsing market, do not offer support for these signals, requiring consumers take the extra steps to find and download a browser plugin created by third party developers. This is a process that most people do not have the technical ability or patience to do.

Consumers are often unaware of how their personal data is being collected, shared and sold. In many cases, this is information that can be utilized in harmful ways that users do not anticipate. For example, the Federal Trade Commission alleged in 2023 that the online prescription company GoodRx had been sharing users prescription information with Facebook and Google.

These details could be used to infer whether a consumer has a serious health condition, information about their reproductive health, in addition to other sensitive information. The Bill also helps parents safeguard their children's data from misuse by providing a straightforward option to opt out of data sharing.

This is critical because children are increasingly exposed to apps that misuse their data. Just last year, our Attorney General and Los Angeles City Attorney took action against Tilting Point Media for collecting and selling kids information without consent through the spongebob Crusty Cook off app there.

There have been previous attempts to simplify users ability to manage their opt out preferences, but these efforts were mostly voluntary. For example, about a decade ago, nearly all major browser vendors adopted Do Not Track Technology.

Yet, despite vows to honor do not track the Businesses receiving those signals were legally not required to respond to them, and the vast majority did not respond to those signals. California and 11 other states now require businesses to honor do not sell signals, providing a significant opportunity to expand consumer protection by requiring browsers to offer these signals.

If this Bill is adopted, California would be the first state to require browsers and mobile operating systems pursuant to regulation to offer consumers the ability to enable these signals. AB566 would look significant.

Excuse me, would significantly benefit consumption consumers by granting them greater control over their personal data and offer a better way to choose how and when that data is utilized by businesses.

The Bill ensures that an individual's right to privacy is upheld by requiring web browsers and mobile operating systems to include easy to access global opt out settings so that anyone can easily stop the sale of their information by all businesses if they so choose.

Here to testify in support of the Bill is Maureen Mahoney, Deputy Directory Director of Policy and Legislation at the California Privacy Protection Agency and Shivan Sahib, Vice President of Privacy and Security at Brave Software.

Very good. Would you like to proceed?

Thank you, Chair. Members of the Committee really appreciate the opportunity to speak today. My name is Maureen Mahoney. I'm the Deputy Director of Policy and Legislation at the California Privacy Protestant Protection Agency. We implement and enforce the California Consumer Privacy act as well as the Delete act. And our mission is to protect California's consumer privacy.

And consistent with that mission, we are the proud sponsor of AB566. It would require browsers and pursuant regulation mobile operating systems to offer consumers what's known as opt out preference signals.

So just by way of explanation, one of the most important aspects of the existing CCPA is to require businesses that receive these opt out preference signals to honor them as an opt out of sale and sharing of personal information.

For example, if you use a privacy focused browser like Brave DuckDuckGo or Mozilla Firefox, unless you send an opt out preference signal known as the Global Privacy Control. So if you Visit a website, for example ESPN.com, your browser will automatically send a signal to that site requesting to stop the sale and sharing of your personal information.

And under California law, espn.com, is required to honor it. So it's a really important provision. It's already been enforced by the Attorney General and you can see how it'd be much easier for consumers to exercise their privacy preferences that way by enabling that signal rather than going to every single site one by one and opting out.

So 11 other states from Connecticut New Jersey to Texas and Montana have followed in California's footsteps in requiring businesses to honor these signals. So California really has been a leader in this space. We're really encouraged by the progress that's been made, but we are concerned about consumer access to these signals.

Some of the biggest browsers like Chrome, Safari and Edge don't offer native support for these signals. This bill would correct that by requiring them to do so, reducing the burden on consumers, particularly the most vulnerable. So for these reasons, we respectfully ask for your support.

Thank you very much, sir. Did you want to speak?

Chair, Committee Members, thank you for the opportunity to speak. My name is Shivan Kaul Sahib. I'm the VP for Privacy and Security at Brave Browser. I have many years of experience in the privacy tech space and especially in the field of Internet standardization and protocol standardization.

And I currently serve on the Open Tech Fund Advisory Council and was previously an invited expert at the W3C on privacy related matters. So Brave is an Open Source Privacy First Browser and we support AB566 because we believe that every Californian should have the right to privacy and should be allowed to easily exercise their privacy rights.

And since 2020, Brave has offered global privacy control, or GPC. And this tells websites not to sell or share information, personal information of our users. And over the last five years, it has saved our users countless hours trying to exercise their privacy rights. And it took our small team just a few days to implement gpc.

And this is by design, the protocol is very simple. It is just one HTTP header and a JavaScript property. And this also makes it very easy for websites to detect and honor the signal. So which is why I strongly believe that there is no technical barrier here.

It is very easy for browser vendors and for websites to send and receive the signal. So for these reasons, I think we support this bill. Thanks.

Okay, thank you. Could we have speakers in opposition, please?

In favor.

Excuse me, jump in the gun here. Support. Please come. Please come to speak in support.

Mikey Houthi on behalf of Common Sense Media in support.

Ken Wang on behalf of the California. Initiative for Technology Democracy in support.

Thank you. Tracy Rosenberg on behalf of Oakland Privacy in support of the bill.

Becca Kramer Mater with Kaiser Advocacy on behalf of the Electronic Frontier Foundation, Consumer Reports and Privacy Rights Clearinghouse in support.

Thank you.

Thank you. Doug Subers on behalf of the Californians for Consumer Privacy in support.

Thank you. Any speakers in opposition, please come forward. There's a primary speaker. If you'd like to speak at the table.

Thank you. Excuse me. Ronak Dalami, with Cal Chamber respectfully opposed to AB566 for much of the same reasons we oppose AB3048 last year. Our Members support user choice, which is why browsers and devices already compete on offering clear, effective user controls over data, including centralized controls.

But in making opt out preference signals or global privacy controls mandatory, this Bill creates significant compliance questions. Implementing signals is not without complexities.

That's why Prop 24 required that signals meet certain specifications, including that they be free of defaults that presuppose consumer intent, that they be clearly described, easy to use, and not conflict with other commonly used privacy settings or tools.

Prop 24 also wisely actually stopped short of mandating recognition of global privacy controls by all CCPA govern businesses, preserving some flexibility in the mechanisms for recognizing consumer requests. Unfortunately, the agency took that flexibility away when it unilaterally mandated recognition of the signals, and now AB566 would extend the impact of that decision even further.

As to the mobile operating system provisions, to put it bluntly, we don't feel it's appropriate to delegate such authority to the agency based on non existent requirements and unspecified technical specifications, essentially handing away the legislative pen and blank check to write the law as they see fit and making whatever law they land on effective six months later.

While we greatly thank the Committee for at Least narrowing the agency's rulemaking authority moving forward, the mobile operating system provisions are still directly contrary to the governor's Veto message of AB3048 last year.

He clearly voiced concerns over placing a mandate on operating system developers at this time, when no major mobile operating system incorporates an option for an opt out signal, in contrast to Internet browsers. As it stands, however, we aren't sure how this will work.

If a consumer enables an opt out on a phone, have they opted out of all targeted ads for every business whose app is on the phone? Even if they sent a conflicting signal to the business, can the business ever ask them to opt back in? There's a lot of questions that we just don't have answers to.

If we did, we're not sure why it's not in the Bill, so for those reasons we are opposed. Thank you.

Thank you. Next speaker please.

Good afternoon. My name is Todd Bailey and I'm the founder of Gray Dot Media, a small business that helps other businesses grow through digital marketing, media production, and web development. Since 2011, I experienced firsthand all the various platform privacy and algorithm changes and the impact that I've had. During this time.

I've had the pleasure of working primarily with local Sacramento businesses local local businesses of all sizes. But I truly believe small businesses are the backbone of our economy. However, AB566 would make it much harder for us to operate, compete and serve our customers effectively.

Personalized ads are a critical tool for us to connect businesses with their ideal audience at an affordable price. Small businesses don't have the large budgets needed for traditional forms of advertising like TV, billboards or radio ads, and personalized digital ads are often their only chance to compete.

Not to mention, the ads also provide actionable information that traditional advertising can't compare with. I understand the importance of consumer privacy. Small businesses like mine already have the challenges to comply with the strict data protection laws under the California Consumer Privacy Act. But AB566 goes too far.

It forces a one size fits all approach that will make advertising more expensive, less effective and harder to manage for small businesses. While big corporations will continue to dominate the digital space, universal opt out mechanisms are a new and untested approach to user privacy settings.

Businesses are still in the process of developing the best ways to manage their nascent privacy signals to ensure compliance with California's new first of their kind privacy regulations. Studies show that non personalized ads are less than half as effective as segmented ones.

If AB566 passes, businesses like mine and the small business owners we work with would see lower engagement, fewer customers, and ultimately a reduction in revenue. Not to mention, personalized ads remove barriers to accessibility. What we have today allows us to include content in other languages and formats to better serve the regional demographic needs.

Without the ability to serve ads to the right people, we would be forced to spend more money to reach the same audience, which isn't a realistic option for small businesses already struggling to stay afloat. AB566 also brings uncertainties in how we run our businesses.

With new untested regulations like this one, we'd have to dedicate significant time and resources to navigate compliance. Even as we already face economic challenges, the potential for increased costs makes it harder to focus on what matters delivering quality services to our clients and ensuring their businesses grow and reach the right audience.

Finally, I want to emphasize just how much AB566 would disproportionately impact the people I serve. Larger companies with bigger ad budgets can absorb these costs. Small small businesses, however, are already operating on tight margins and AB 566 would create an additional financial burden that many of us simply can't bear.

I respectfully ask that you stand with small businesses and vote no on AB566. Thank you.