A Senate bill introduced
Thursday would impose ad taxes on large social platforms that use algorithms to recommend content to users.
The In Real Life Act, unveiled by Senator Chris Murphy (D-Connecticut), would require
social platforms with at least $500 million in ad revenue to pay taxes at rates ranging from 10% (for ad revenue between $500,000 million and $2.5 billion) to 50% (for ad revenue over $10 billion) --
but only if those platforms use automated systems to promote content based on users' personal data.
Murphy's office stated Thursday that
the measure is "part of his policy agenda aimed at record-high rates of loneliness and distrust."
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His office added that social media companies "can avoid the tax by turning off
their addictive algorithm," and that "big social media conglomerates can also pay lower rates by breaking up into smaller companies."
The measure would only apply to platforms
that use automated systems to promote content to users based on personal data -- which the legislation defines as information "that identifies or is linked or reasonably linkable, alone or in
combination with other information, to an individual" or "a device that identifies or is linked or reasonably linkable to an individual."
The bill also provides that not all
types of recommendations based on personal data would trigger a tax. For instance, recommendations based on a user's language, recognized location, age and type of device wouldn't in themselves
subject a platform to the tax.
The proposed law would only apply to social media platforms, generally defined in the bill as services with a "primary function" of providing a
forum for user-generated content. The bill exempts numerous other online sites and services -- including e-commerce sites, online video games, and sites that "primarily" offer news, sports,
entertainment or other content that is not user-generated.
The bill also requires tax revenue collected from the social platforms to be "distributed to local communities for the institutions,
programs, and physical spaces that bring their residents together in common cause."