Online Safety: Don’t Sideline Competitiveness

Spring is an important time for Connecticut’s business community. Once the snow and ice thaw, restaurants will start promoting patio openings, retailers will launch seasonal sales, and local service providers will look to fill their early summer schedules.

For these small- and medium-sized businesses, seizing the moment to reach new customers while maintaining their loyal base is the top priority—but doing so cost-effectively is just as much of a priority.

That’s why a new movement to regulate one of their most effective tools to reach consumers in the state house is raising alarms. 

Social media marketing is no longer a novel tool. It’s been a trusted staple of Connecticut’s business community for the last decade or so, becoming increasingly important as more consumers shift online.

Recent polling reflects that reality, showing that most small business owners across the country believe it’s the most effective channel for reaching those who matter most.

That’s because social media is far cheaper and more targeted than other options, stretching limited marketing budgets to achieve the widest reach.  

Guardrails

As the state’s leading voice for the innovations, entrepreneurs, and leaders that shape Connecticut’s business sector, CBIA believes that preserving the effectiveness of these tools is essential.

At the same time, we recognize that while social platforms deliver real value, they also present serious risks, particularly for our kids.

That’s why, while we are grateful to see Connecticut’s state lawmakers consider new guardrails for kids online, we urge them to carefully weigh how their proposed solution, HB 5037, could create more problems than it solves. 

The majority of the proposal poses significant challenges and introduces higher compliance costs and regulatory uncertainty.

The bill imposes broad new requirements on social media platforms, including the need to verify users’ ages and obtain parental consent before allowing anyone under 18 to access the platforms.

HB 5037 also calls on platforms to institute mental health warning labels, limit notifications, prohibit tailoring algorithms to users under that age, and change default privacy and content settings.

Some of these provisions may have merit, but the majority of the proposal poses significant challenges and introduces higher compliance costs and regulatory uncertainty—both for small developers operating in our state and for small businesses that use their platforms.  

Sweeping Mandates

The bill’s restrictions on tailored feeds would severely undermine the effectiveness of targeted advertising, something that might be inconvenient for a national brand but a serious blow to a mom-and-pop shop.  

Beyond the direct economic impact lies a serious legal question.

Connecticut has a duty to protect kids online. But doing it in a way that limits small business reach, costs taxpayers, and jeopardizes innovators is simply not the right approach.

Similar legislation has already been blocked in Ohio, Arkansas, Georgia, and Louisiana by courts citing constitutional concerns.

Similar legislation has already been blocked in Ohio, Arkansas, Georgia, and Louisiana by courts citing constitutional concerns following legal battles that cost taxpayers, raising the question of why the Constitution State is taking the same approach.  

With a short session and a long list of other priorities to address, there is no reason the Land of Steady Habits should rush forward a policy with ramifications like these.

Instead, lawmakers should slow down and work with the business community to explore a viable path forward that doesn’t risk competitiveness and innovation across the state.