Will New U.S. Privacy Regulations Be Too Expensive for Small Businesses?
Stronger privacy regulations in the manner of the European Union’s General Data Protection Regulation (GDPR) are almost universally seen as a net good for consumers. However, as with most debates that pit private and public interests against each other, there is a legitimate competing interest to consider. New privacy regulations that stress consent of the individual mean added compliance costs, and those are often quite significant. While a Google or an Apple may be able to bear these costs without much pain, it can be much more of a burden on small businesses.
The U.S. is marching toward GDPR-like privacy regulations, with certain states (such as California) already passing comparable legislation. A number of federal proposals are on the table, and something could be in place as early as 2020. While this is generally seen as favorable to consumers no matter what form the national legislation ends up taking, small and medium-size businesses (SMBs) are worrying about what the associated costs of new data privacy laws will be.
The main concerns of small businesses in the U.S.
The Connected Commerce Council, a non-profit digital technology industry organization that focuses on small business needs, recently published the Small Businesses Data Regulation and Responsibility research report. This report surveyed SMBs throughout the country to sample business ideas about new and stronger privacy regulations.
A broad mix of business types were surveyed, with 12 categories ranging from agriculture to finance. Business sizes ranged from 5 to 500 employees and about $25,000 to $1 million in annual revenue. The demographics included were meant to mirror 2016 census data on country business patterns. Persons surveyed were either small business owners or key decision makers at their respective companies.
Surprisingly, even though 80% of respondents said they knew very little about data protection law, 72% support improvements to privacy regulations. The big caveat there is that those changes must not cause distress to their day-to-day operations. 56% of the respondents believe there will be a negative impact to their business if there is any change to current regulations, and only 15% believe that policy makers will pass regulations that do not adversely affect small businesses.