California

Overview:  Affordable and effective, data-powered digital advertising helps millions of small businesses find customers, grow, and compete with larger companies. AB 566 would require Internet browsers to provide a one-step data-collection opt-out for California consumers. 

The problem:  Consumers rarely read or understand such notices; most hastily click “yes” or “no” without understanding the implications of their choice. If businesses lose the data that powers their ads, they’ll have a much harder time reaching customers. In addition, complying with AB 566 may require businesses to undertake expensive website reconfigurations. Finally, the required pop-up notices may annoy consumers, driving them away from businesses’ websites. 

The impact: California small businesses may see reductions in sales as a result of less effective (non-data-powered) advertising and reduced website traffic. At the same time, they may have to spend more money to reach the same number of customers. AB 566 is likely to impact California small businesses’ top and bottom lines significantly. 

AB 566 Sponsor: Representative Josh Lowenthal

Overview: Increasingly, we’ve seen states introduce “abuse of dominance” (AOD) legislation that seeks to regulate some of America’s leading digital platforms used by millions of small businesses, including Amazon’s online marketplace, Google’s search and advertising platforms, and app store business, Meta’s Facebook, and Apple’s app stores. While these bills would make it illegal for these platforms, or any platform that meets an arbitrary definition of “dominant,” to engage in any practices that harm competitors, they would also cause a slew of adverse impacts on SMBs. Potential antitrust laws would cost California’s SMBs that create and sell physical goods $81 billion annually, or $162,000 each per year, according to a new study by Dartmouth economics Professor Emeritus John T. Scott.