As we begin the new year, it is helpful to reflect on small businesses’ challenges and noteworthy successes in 2022. Despite the ongoing economic uncertainty, small businesses proved yet again that they are incredibly resilient and poised for a strong 2023.
In 2022, small businesses had another prolific year on Capitol Hill advocating for important public policy positions to protect their use of digital tools and technology. From California to New Hampshire, to Florida and Illinois, thousands of small businesses stood up and demanded a seat at the table. Policymakers listened, proving that small businesses are more important than ever as they raise their voices on issues that could affect the digital ecosystem.
Included in these issues small businesses cared about were a package of anti-tech bills that set out to change the way large technology platforms operate. Thousands of small businesses sprang into action because they knew the unintended consequences of the proposed legislation would end up hurting their bottom line. Despite claims that the bill would help small businesses, these anti-tech bills would have made it harder and more expensive for small businesses like Chilitos in California to run effective marketing campaigns intended for a specific audience, since the bills could ban integrated tools like Google Ads and Google Analytics (a free service). It would have also banned services like Fulfillment by Amazon (FBA) from integrating with Amazon, making it difficult for companies like Nested Bean in Massachusetts to guarantee shipping times, qualify for Prime, and save 20-30% on fulfilling orders themselves.
Thankfully, thousands of small businesses got involved. Alfred Mai, the owner of ASM Games, wrote an op-ed in the Silicon Valley Business Journal about how the legislation would make it harder for them to run and grow their business. Angel Johnson, the founder of ICONI in Denver, met with her Senators’ offices to share her concerns about the bill.
Their efforts were critical to ensuring that policymakers knew small businesses had significant concerns with the legislation. Ultimately, these anti-tech bills failed to pass either the House or Senate in 2022, but small businesses should still be concerned about Congress pursuing similar legislation in 2023 and beyond.
Looking Ahead to 2023
As we look to 2023, other serious small business issues are on the horizon. These include new rules restricting the use of data, and changes to laws that would impact small businesses’ ability to host user-generated content, and enable social media posts, online reviews, comments, and even item descriptions on online marketplaces.
Potential new privacy regulations hold promise for protections that improve consumer trust and provide the certainty and flexibility small businesses depend upon to continue investing and innovating. If thoughtfully crafted, privacy legislation could enact important consumer data protections without creating unnecessary hurdles to innovation and small business operations.
Small businesses have shown they care deeply about data privacy and security, with 47% identifying data security as their top tech-related regulatory concern that Congress should address. Over the past few years, some states have passed data privacy laws, such as California, Colorado, Connecticut, Utah, and Virginia. But in today’s digital economy, small businesses’ customers and data cross state lines. They need one national privacy law rather than 50 different ones because tracking and complying with so many privacy rules is costly and time-consuming. Congress must ensure that a new privacy law creates a uniform standard, doesn’t lead to small businesses being bogged down with onerous compliance obligations or costly, frivolous lawsuits, and that they have a simple and clear understanding of how that law will be enforced.
Next, if lawmakers rewrite Section 230 of the Communications Decency Act (also known as CDA 230), the law that enables every facet of the modern internet, it would severely hurt small businesses. Section 230 creates legal protection for websites and services that host and organize user-created content, from third-party online marketplaces to discussion forums, online review sites, and social media. Without this legal clarity, online companies will be forced to choose between over-policing or turning a blind eye to all content on their sites. All of the online services we use daily would change in ways that would make them less useful to small businesses, and some may even cease to exist.
This would mean that the millions of small restaurants, hotels, sellers, and even local dry cleaners that depend on online reviews and social media to validate a business’s quality and draw customers could lose one of their most valuable marketing tools. For businesses like Scaffidi’s family-style restaurant in Northeast Ohio that compete with national chains like Olive Garden, losing online reviews could be catastrophic.
It could also mean marketplaces like Amazon, Etsy or eBay are forced to restrict who can sell on their platform or even shut down the marketplace to third-party sellers altogether.
Finally, the small businesses that operate their own websites that allow customers to post feedback or encourage customers to comment and build a community will be at serious risk of lawsuits and either have to hire an army of lawyers to review the content, allow harmful comments to go unmoderated, or shut down those parts of their websites.
All of this underscores that every issue is a small business issue and that changing the rules of the road for the leading tech companies will have real consequences for small businesses. We look forward to building on 2022’s success and continuing to advocate with small businesses to ensure their voices remain heard on matters affecting their livelihoods in 2023 and beyond.