Although small business is often described as the backbone of the state economy, the backbone can be severely tested when laws are enacted that impose high costs, competitive challenges, or take away critical services.
Unfortunately, in the desire to protect consumer privacy, not enough attention was paid to the impact of the California Consumer Privacy Act (CCPA) on small-business owners.
Like the flood of ADA lawsuits, the current provisions of the CCPA and newly introduced legislation, Senate Bill 561 (Jackson) place small-business owners at risk regardless of their ability or efforts to comply with the CCPA.
SB 561 would expand the threat of lawsuits by permitting lawsuits against a business for any violation of the CCPA, eliminates the 30-day right of a business to cure a CCPA violation before a lawsuit can be filed, and eliminates the ability of small business to seek compliance guidance from the attorney general. Rather than helping small business to comply, SB 561 makes compliance more difficult and the risks more likely.
Also, it’s clear that compliance with the CCPA will not be cheap. Small-business owners, such as restaurants and retail outlets, may need to hire a lawyer and a technology consultant to determine how to comply with the CCPA. And they may need to hire a new employee or vendor to manage compliance.
In order to compete with large businesses that utilize television, radio, and print ads, small business has relied on a functioning internet that matches small-business owners with customers. But small-business owners do not have the resources to cast a wide advertising net like large business enterprises do. Instead, they use scare resources to create targeted advertising designed to reach specific audiences at a low cost, high probability of reaching people that are interested.
Senate Bill 753 (Stern) protects consumer privacy without eliminating the ability of small-business owners to advertise their products and services and compete with large corporations. The CCPA was intended to eliminate the collection and sale of “personal” information. But the law may have the unfortunate effect of disconnecting small-business owners from their customers and potential customers by classifying everything as personal information and disrupting the ability of the internet to share information without divulging personal information.
SB 753 corrects that problem by allowing businesses to share information to the extent necessary to show specific advertisements to the consumer.
Finally, small-business owners rely on many advertisement-supported internet services. If those services are no longer supported by advertising, the services will cease to exist or charge subscription fees. Like consumers, small-business owners use location-based apps and services for transportation, communication, and popular media and news. The Legislature must develop the protections consumers desire without eliminating the products and services that small business and consumers utilize ubiquitously.
Protecting consumer information is vital. So, too, is maintaining an internet that provides low-cost advertising that matches customers with small-business owners. We need both, and the Legislature needs to develop policies that achieve both goals.
If we want to make sure we are safeguarding our economy’s foundation, we need to make sure that privacy protection coexists with the efficiencies, cost savings, and free services that are vital to the health of California’s small-business sector.
John Kabateck is California state director for the National Federation of Independent Business