Tech giants keep wading into abortion politics. Will the GOP punish them?

Cain ultimately bumbled his way through the rewrite, which passed the deep red legislature in spite of his foibles. But his selection to champion the cause validated his brand of pugilistic conservative politics in Texas, where Republicans are waging an increasingly hostile war against liberals.

I recount this bit of recent history as a precursor to a warning for Silicon Valley: Cain and his like-minded GOP brethren might be coming for you next.

Two developments Monday set the stage for a new frontier in the battle between MAGA-style Republicans and the liberal-leaning tech industry, a faceoff that could impact corporate bottom lines. 

First, Amazon joined Apple, Match, Yelp and several other non-tech companies, including financial services giant Citigroup, in announcing plans to cover up to $4,000 in employees’ travel costs for certain out-of-state medical procedures, including abortion.

Second, Politico published a draft U.S. Supreme Court opinion that shows the nation’s highest court is poised to strike down decades of abortion precedent. The ruling, if finalized, would mean that states could dramatically curtail or virtually ban abortion within their jurisdiction. About half of U.S. states are expected to do so, including tech hubs like Florida and Texas.

The Supreme Court’s potential decision would not preclude companies from offering financial support to employees seeking out-of-state abortions, putting Apple and Amazon on safe footing under federal law. But tech giants should brace for backlash from anti-abortion Republicans, who could craft state laws and federal rules to punish corporations offering any abortion-related financial assistance.

Already, Cain has signaled his willingness to wage battle on this front in Texas—where Amazon reports about 95,000 workers, Apple employs 8,400 people, and Match has its headquarters.

In a letter sent last month to Citigroup CEO Jane Fraser, Cain said he will introduce legislation that bars local governments in Texas from doing business with any company that offers an abortion-related employee benefit, regardless of where the procedure is performed. Cain noted that his proposed legislation mirrors a Texas law passed in 2021 that targeted Citigroup’s municipal-bond underwriting business, a direct legislative response to the company’s support of some firearm-related restrictions.

“Your decision to divert corporate resources to this end is unacceptable and will not be tolerated,” Cain wrote. “Your responsibility as a CEO is to maximize return to the shareholders, not to divert shareholder resources toward ideological causes in an effort to placate the woke liberals in your C-suite.”

Some federal lawmakers also appear ready for the abortion-expense fight. As Bloomberg reported in early April, about 40 GOP members of Congress called on the House chief administrative officer to cancel Citigroup’s contract to provide lawmakers with credit cards for their business-related expenses.

While the abortion benefit debate hasn’t yet sparked nationally, Florida’s targeting of Disney illustrates the willingness of some Republicans to wield state power as punishment for left-leaning politics. (Worth noting: Democrats in New York and San Antonio fought Chick-Fil-A’s expansion over the past several years, citing company executives’ opposition to gay marriage legalization and other policies expanding LGBTQ rights.) 

The appetite for laws like those proposed by Cain will vary by state and industry. And as two of the world’s most powerful companies, Apple and Amazon will have an opportunity to throw around their corporate might in defense of their abortion travel policies. 

At a minimum, the drumbeat of a culture war between anti-abortion advocates and left-leaning tech companies has begun. Based on Monday’s news, it only figures to grow louder.

Want to send thoughts or suggestions for Data Sheet? Drop me a line here.

Jacob Carpenter

NEWSWORTHY

A big plus. The streaming service Paramount+ added 6.8 million net subscribers in the first quarter of 2022, further illustrating the increase in competition weighing on sector-leading Netflix, The Wall Street Journal reported Tuesday. Paramount Global said the service tallied nearly 40 million subscribers by the end of March, up 20% from the previous quarter, as it continues to add original television series, live sports programming, and movies released through the Paramount film studio. Company-wide quarterly net earnings fell 52% year-over-year, settling at $433 million, on weak advertising revenue and increases in operating costs.

Delivering an EV boost. White House officials on Monday formally unveiled a $3 billion grant program designed to spur investment in electric vehicle battery manufacturing, Reuters reported. Automakers and suppliers can now apply for the grants, which were included as part of the $1.2 trillion infrastructure package passed by Congress last year. The federal funding aims to increase domestic battery materials sourcing and manufacturing in the automotive sector, most of which is currently controlled by Chinese companies.

Sound off. Facebook pulled the plug Monday on its underwhelming foray into audio streaming, ending a year-long effort that failed to snag significant market share from Spotify, Apple, and Amazon, Bloomberg reported. The retreat means that users will no longer be allowed to upload podcasts to Facebook starting next week, while all other audio-based efforts will cease by early next month. Facebook will continue to invest heavily in its short-form video product, known as Reels, as it battles top rival TikTok for coveted ad dollars.

A Staten Island setback. Amazon employees working at a New York City warehouse soundly defeated a unionization drive Monday, blunting the early momentum of a nascent organized labor movement in the tech industry, The New York Times reported. About 60% of nearly 1,000 voters opposed unionization at the Staten Island facility, located adjacent to another Amazon warehouse where workers voted last month to form the first Amazon employee union. Election observers noted that Monday’s electorate included more part-time workers, which might have impacted support for the union drive.

FOOD FOR THOUGHT

Going after Gary. Securities and Exchange Commission Chair Gary Gensler would be wise to avoid crypto Twitter. As Protocol reported Tuesday, blockchain boosters have turned on Gensler over the past 12 months, frustrated with his agency’s refusal to provide clearer guidelines for acceptable operating practices. Cryptocurrency advocates initially gave Gensler some slack following his confirmation to the position in April 2021, noting that he taught classes on blockchain as a professor at MIT. But the crypto community has soured on Gensler’s leadership, citing his preference for reactive policing of crypto activities over development of blockchain regulations.

From the article:

Marc Fagel, the SEC’s former regional director for San Francisco and now a lecturer at Stanford Law, said the cases the agency has filed “are well-reasoned that under settled law, these are securities.” But he also said where the SEC “falls short is giving more than proactive guidance with rulemaking of what the industry can do that won't get them in trouble."

The responsibility for the problem also rests with Congress, which has also failed to legislate on crypto. As a result, “both politicians and regulators are not finding a way to quickly get in there and provide some industry guidance,” he said.

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Why eliminating A.I. bias is harder than it seems, by Jonathan Vanian

Data scientists are using the most annoying feature on your phone to save lives in Ukraine, by Bernhard Warner

Activision boss Bobby Kotick could see $500 million windfall from Microsoft deal months after employees walked out to demand his removal, by Scott Carpenter and Bloomberg

BEFORE YOU GO

An A+ for Alphabet. Surely there’s a money-making angle here, but regardless, a tip of the cap to Google for its education announcement Monday. As Reuters reported, the Alphabet unit will provide businesses, free of charge, with up to $100,000 worth of online instruction through its career certificate platform. Users can take classes in data analytics, project management, IT support, Android programming, and other tech-focused subjects. It’s barely a blip on Alphabet’s bottom line, and the courses don’t count toward college credit. But at a time when higher education is more expensive than ever, every affordable learning alternative helps.