Maine

LD 1977 will stop small businesses from “knowing and communicating with their customers” because it limits collection to only data “necessary to provide or maintain a specific product or service,” which inadvertently prohibits legitimate data collection that is otherwise permitted by the bill.

This hurts small businesses in many ways: 

1. Prevents businesses from contacting existing customers about upcoming sales, new products, or other marketing updates. 
2. Prevents businesses from using customer location data to decide where to open new locations.
3. Prevents businesses and their marketing partners from collecting traffic data needed to measure and improve website performance.
4. Prevents businesses and their advertising partners from collecting consumer data necessary to measure and improve advertising effectiveness.

The bill also requires all businesses with more than 50,000 consumer interactions to produce “data protection assessments” for every data processing activity “that creates a heightened risk of harm.” “Heightened risk” activities include anything relating to targeted advertising, profiling, and processing of sensitive data, including data identifying a consumer’s race, color, or gender identity. 

• “Profiling” includes any processing to generate product recommendations.
• A person’s name could be gender-identifying. A purchase of makeup, hair, or religious products could identify race or religion.
• Data protection assessments are a new concept requiring expensive lawyers and consultants. Compliance costs alone will crush small businesses. 

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 Maine’s SMBs that create and sell physical goods $3.45 billion annually, or $174,400 each per year, according to a new study by Dartmouth economics Professor Emeritus John T. Scott.