Consumer Privacy Proposal Impacts Small Businesses

A bill that mirrors the California Consumer Privacy Act by restricting how companies share personal information could hurt small businesses through its harsh penalties.

The legislature’s Government Administration and Elections Committee heard testimony March 25 on SB 1108, which is designed to enhance privacy rights and consumer protections for residents.

CBIA’s Eric Brown says the version the committee sponsored has many flaws.

“Small businesses—many with razor-thin margins that host even just a few customers a day—would be subject to expensive and otherwise overly burdensome requirements of this proposal,” Brown said.

“As we understand the bill, a small coffee shop, restaurant, or hardware store that accepts even a modest online payment from a Connecticut resident would be held accountable for compliance with this bill.”

Establishing national privacy protections critical for #smallbiz given the costs and complexity of trying to comply with a maze of inconsistent state laws. https://t.co/W2cDMdGFoN

— CBIA (@CBIANews) March 27, 2019

Severe Penalties

What’s worse, Brown said, is that severe penalties associated with even one violation could cripple a small- or mid-sized business.

California passed its law in June 2018 but it won’t take effect until January 2020.

The proposal demonstrates that a state-by-state quick fix is not the way to approach consumer privacy, Brown testified.

“Instead, federal lawmakers should craft a careful and comprehensive policy that ensures transparency and protections against data misuse,” he said.

Brown urged committee members to take no action on SB 1108.

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For more information, contact CBIA’s Eric Brown (860.944.8792) | @CBIAericb