Data Privacy Bill Needs Balanced Approach
The legislature’s General Law Committee will consider legislation imposing broader and potentially costly restrictions governing the use of consumer data.
Although currently nothing more than a one-line concept bill at the moment, the bill is a top priority for Senate Democratic leadership.
The issue has been the subject of a working group since the later half of 2021 as lawmakers pursue additional rules regarding businesses ability to share consumer data.
However, economists have repeatedly demonstrated that the benefit of open data sharing vastly outweighs potential issues.
For instance, data use can anticipate consumer needs and generate innovative solutions—for example, the development of certain coronavirus vaccines was facilitated by data sharing.
There are broad concerns about the potential for substantial compliance costs, particularly for small businesses, if the legislation is not carefully crafted.
For example, a similar California law resulted in an estimated $55 billion in initial compliance costs, with an additional $16.5 billion in direct compliance costs forecast by 2030.
Several other states have also developed proposals, which represents an additional challenge.
The passage of data privacy laws on a state-by-state basis, as opposed to a uniform federal act, creates confusion resulting in costly and cumbersome processes for many multi-state businesses.
The privacy laws being passed by individual states are all unique, forcing multi-state organizations to comply with a different set of rules depending on where they are doing business.
There is an opportunity to draft a proposal that properly weighs consumer rights versus business interests.
During the 2021 legislative session, business community advocates worked with the General Law Committee to craft legislation that balanced the concerns of both consumers and businesses.
However, after the committee process, the compromise was shelved by caucus leadership in lieu of a more one-sided approach.
That version did not have the support necessary for final passage in the state House.
A public hearing on this proposal will be held in the General Law Committee in the coming weeks.
CBIA encourages lawmakers to adopt a balanced approach, properly weighing consumer privacy rights with keeping compliance costs low.
For more information, contact CBIA’s John Blair (860.244.1921).
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