After California passed a law forcing digital platforms to adopt privacy guardrails and safety standards for young users, Carl Szabo had a blunt warning for legislators attending the nation’s biggest conference for state policymakers: “The lawsuits are coming.”
Over the past decade, Szabo and his colleagues have transformed NetChoice, their small, right-leaning lobby known for its brash tactics, into Silicon Valley’s litigation powerhouse.
With Meta Platforms Inc., TikTok Inc., and X Corp. among its members, the Washington-based trade association’s won injunctions against laws regulating social media in five states.
The US Supreme Court will hear challenges on Monday to the constitutionality of the Florida and Texas laws. Each was introduced by Republican legislators after social media platforms suspended accounts supporting the January 6 Capitol attack, and aimed to prevent companies from “censoring” posts.
The spotlight reflects NetChoice’s outsized role in a free-speech debate that’s drawn increasingly more political, legal, and governmental scrutiny, from state capitols to Congress.
It doesn’t publicly disclose how much money it receives from each member, but NetChoice’s total revenue jumped from just over $3 million in 2020 to $34 million in 2022, according to public tax records. The group also has built a lobbying presence in 26 states, and opened a new litigation center last year.
Unlike other trade associations, NetChoice’s member companies don’t have a say in whether the group brings a lawsuit, its leaders say. That has allowed the relatively small firm—about a dozen employees, with only four focused on litigation—to move nimbly and punch above its weight in influencing internet policy by targeting state laws in court.
“When there’s a threat, when there’s an opportunity, we will act,” Szabo, the general counsel for more than a decade, said in an interview with Bloomberg Law. “That’s kind of a running theme in our DNA.”
Critics paint the group as an attack dog willing to “weaponize” the First Amendment in a bid to stop any internet regulation—bringing cases in a way that shields its members from having to take a public stance. Some cite its successful challenges to laws governing how platforms treat underage users.
“NetChoice isn’t interested in an actual debate because they would rather concern troll on behalf of their Big Tech members who have a vested interest in profiting off of kids rather than protecting their youngest users,” said Nichole Rocha, Head of US Affairs at children’s online advocacy group 5Rights.
Adam Kovacevich, a former Google lobbyist who helms the left-leaning tech trade association Chamber of Progress, said many tech trade groups are afraid of harming their relationships with legislators, which makes them hesitant to bring lawsuits. NetChoice is not, he said.
“They have established themselves as a voice that is willing and eager to litigate,” Kovacevich said. “I think of it as moving at the speed of politics.”
Starting small
NetChoice was founded in 2001 by a coalition of online businesses hoping to fight what they described as “threatened middlemen”—the brick-and-mortar businesses concerned by the rapid rise of online competitors, such as liquor stores and auction houses.
EBay, Orbitz and 1-800-Contacts were among the group’s founding members. It also had the support of then-Connecticut Sen. Joseph Lieberman, Democrats’ 2000 vice presidential nominee.
The trade group’s leaders shun the description “libertarian,” to keep their distance from the political party of the same name. But from the start they made clear its libertarian values, arguing the internet economy should remain free of government intrusion, or “protectionist legislation or regulation.”
Several of NetChoice’s current and former employees have attended or teach at George Mason University’s Antonin Scalia Law School, a school with a reputation as a hub for libertarian and pro-business ideology.
The lobby has also long maintained ties to the free-market network of nonprofits funded by billionaires Charles and David Koch.
NetChoice president Steve DelBianco, a former IT consulting executive, sat on the private industry advisory council for the American Legislative Exchange Council, or ALEC, a group that has received millions in funding from the Kochs. And NetChoice has partnered throughout the years with Americans for Tax Reform, which receives funding from Koch-affiliated foundations.
2024 Bloomberg L.P. Distributed by Tribune Content Agency, LLC.
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