California Small Business Leaders Urge State Officials to Reconsider Proposals That Would Overregulate AI-Powered Tools

Sacramento, CA (Nov. 8, 2024): Today, 24 small business leaders urged the California Privacy Protection Agency (CPPA) to reconsider proposed rules that would make Artificial Intelligence (AI)-powered products and services more expensive and less effective. In a letter to the CPPA, the signers recognize that AI is making digital advertising, marketing, customer acquisition, and product delivery more efficient, which makes small businesses more profitable and helps them compete against larger companies and grow. The CPPA is holding a public meeting today to discuss the proposals that would make operating a small business more difficult.

The small business leaders’ chief concern is a proposal allowing consumers to opt out of having their data used by AI-powered decisionmaking tools (ADMTs). For software developers and small businesses, ADMTs are just upgraded software that processes more data faster and helps small businesses make better decisions about things like where to buy ads and which consumers are more likely to become purchasers. The opt-out would also make it more difficult for small businesses to recruit and hire workers, as AI tools are more frequently powering resume reviews and other hiring tools.

“AI is powerful software, but it’s just another way we deliver value to clients, customers, and team members. AI-powered tools help us make better decisions and operate more efficiently. There is nothing risky about small businesses using AI in lawful ways — additional government regulation will just slow us down and hurt our businesses,” the letter states.

The letter’s signers – small businesses from across California – make clear that they’re not opposed to new regulations, but that CPPA rules should directly help individuals, not just create challenges and costs for small businesses.

“Instead of regulating technology that provides enormous benefits, we urge the agency to regulate practices that harm individuals. California is a tough state for small businesses. Please don’t make it harder,” the letter concludes.