Getting Data Privacy Right is Critical for Small Business Success
Small businesses continue to show incredible resilience despite years of unexpected economic turbulence. The economy remains fragile, but policymakers in Washington, D.C., and some states are tackling an issue that could have profound financial implications for small businesses: data privacy.
The need for a national data privacy law
One central tenet we can all agree on is that people have the right to know their most sensitive personal data is safe. Small businesses agree and have shown a deep commitment to data privacy, with 47% identifying data security as their top tech-related regulatory concern for Congress to address. Small businesses need Congress to pass a national data privacy law. In today’s economy, small businesses’ customers cross state lines, and the costs of tracking and monitoring various privacy laws are nearly impossible for most small businesses.
Challenges without a national data privacy law
Without a national privacy law, small businesses could face crippling tracking and compliance costs from the patchwork of state laws that arise. Already, California, Colorado, Connecticut, Iowa, Indiana, Tennessee, Montana, Texas, Florida, Utah, and Virginia, have passed their own data privacy laws, and more states are considering data privacy bills every year.
The importance of data for online marketing
Online advertising and social media are vital for helping small businesses find customers, and they are powered by data. Digital advertising is effective, affordable, and helps small businesses grow and succeed. Recent 3C research shows that 82% of small advertisers say digital ads help them reach customers more effectively than traditional ads like billboards and television, and 80% say they help them compete with larger companies. Digital ads are effective because data helps advertisers create the best ads possible for the customers most likely to want to buy their products and services.
The patchwork among state laws
While some states like California and Virginia, for example, passed meaningful data privacy legislation protecting small businesses and consumers, others have passed laws beyond protecting consumers’ sensitive personal data. This year, Florida passed a privacy law that over-regulates collecting and using basic, innocuous data that helps small businesses reach consumers or earn revenue by selling ads on their websites. New York considered similar legislation, but luckily the legislature adjourned before passing the proposal.
If more states adopt this approach, digital advertising will become “mass media” advertising like television, which is unaffordable for most small businesses, and gives big national chains and international conglomerates a significant advantage. Small business owner Alexander Federowicz of QRxLabs in Miami understands data’s critical role in online advertising and shared his views in this opinion piece in Florida Politics. He knows how digital ads help his skincare company succeed and why the Florida privacy law threatens his existence.
Advocating for a balanced national data privacy law
The only solution to ensure consumers maintain their privacy while small businesses can keep advertising effectively is for Congress to pass a balanced, common-sense national data privacy law. This law should protect consumer privacy without stifling small businesses’ ability to compete and thrive. Click here to tell your elected representative why small businesses need Congress to pass balanced, thoughtful federal privacy legislation.
