Congress Investigates Whether Privacy Rules Can Protect Consumers Without Killing Small Business

Congress has held many hearings on privacy legislation, mostly with the perspective of creating legislation for large tech companies. Paradoxically, major regulatory initiatives such as the General Data Protection Regulation (GDPR) of the European Union have strengthened the Google, Amazon and Facebook to the detriment of small to medium sized (SMEs) companies.  Fortunately U.S. Sen. Jerry Moran, (R-KS), Chairman of the Subcommittee on Manufacturing, Trade, and Consumer Protection, convened a hearing on Small Business Perspectives on a Federal Data Privacy Framework. Preliminary reports show that companies are spending a minimum of $100,000 just to comply the California Consumer Protection Act (CCPA). One cost benefit analsysis suggests that the costs of complying with the CCPA exceed the benefits four times. Given that half a million businesses are liable under the CCPA which comes into effect in January 2020, it is imperative that Congress address comprehensive national privacy legislation to forestall California’s well-intentioned but misguided law which could decimate SMEs. As Ranking Member Senator Blumenthal (D-CT) observed, “Small businesses are the lifeblood of our economy. They create more jobs than anybody.”

Here are some of the perspectives shared at the hearing.

National Association of Realtors

Nina Dosanjh, Vice Chair of the Technology Policy Committee of the San Francisco based National Association of Realtors (San Francisco) observed, “Realtors, like many main street businesses, rely on data to enhance revenue and drive efficiency, whether by better understanding the needs of existing customers, reaching new ones, or obtaining valuable insights to guide a wide array of business decisions. For example, realtors may use consumer data to allow them to advise their selling clients on how to price their home and how many potential buyers will be interested at different price points. It can also be used to give buyers a better sense of what types of properties competing home buyers are looking at, as well as their buying ability. In sum, realtors use the consumer data they collect to improve their clients experience in a way that consumers can understand and expect.”

Silver Star Communications

Jefferson England the CFO of Silver Star Communications, headquartered in Thayne, WY, explained the need for a single federal standard that allows for companies to serve their customers. “We provide services in multiple states, and having to manage a patchwork of state privacy laws will not only create an environment of uneven protections, but would create administrative burdens on small business,” he said. “Legislation should not interfere with business and consumer relationships that are based on mutually understood privacy protection tolerances. If a consumer is willing to release data in order to receive services, it should be the consumer’s right to do so, and the business should be allowed to provide such services. Similarly, the market should be allowed to present data privacy alternatives as competitive differentiation so long as data privacy protection practices are clearly identified and accepted by the consumer.”

Read more of this Forbes article by Roslyn Layton by clicking here.