Should California’s privacy law be modified?

The California Consumer Privacy Act (CCPA), which takes effect next January, was intended to protect the privacy of personal consumer information by limiting the sale of information between organizations that use data to reach customers, and it provided consumers with certain rights. To achieve these consumer-focused goals, the CCPA imposes significant requirements and burdens on businesses.

In fairness, the CCPA was not aimed at small businesses, and the Legislature should be acknowledged for endeavoring to carve out small businesses from the compliance requirements. But it is unrealistic to think that the small business community is shielded from its impacts in totality.

The Legislature can help balance the interests of consumer privacy, business health, and small business by passing several pieces of clean-up legislation that will mitigate the indirect impacts on small enterprise

Every small business enterprise is part of the larger, symbiotic business ecosystem. We purchase supplies from large vendors. We use social media to promote our companies. We depend on internet-based business tools for banking, finance, sales, and logistics.  Small businesses often produce the goods, parts, and services that are procured and distributed by larger companies; conversely, larger companies provide the components that we use for our products and services.

Most importantly, because we are more vulnerable to changes in the business climate and less able to weather change, what hurts our larger business collaborators trickles down to impact us even more.

Under the CCPA, qualifying businesses will be forced to hire highly technical employees and consultants to ensure they are complying with the law’s new data requirements (and face stiff fines even if an error was inadvertent). They must revisit and reconfigure their online marketing plan with new ways to reach customers, and they must establish new systems to organize and store customer data, respond to consumer data requests, and ensure ongoing compliance with individual opt-out notices.

These changes have the potential to dramatically increase costs and create new liabilities. The law will also undermine the model of free or low-cost business tools or content platforms that are currently supported by ads, and incredibly useful to small or growing businesses. Say hello to more subscription-based services and generally higher costs across the board.

The Legislature can help balance the interests of consumer privacy, business health, and small business by passing several pieces of clean-up legislation that will mitigate the indirect impacts on small enterprises.

The definition of “personal information” in the CCPA is so broad and vague that many companies may be overwhelmed by the obligation of associating non-identifiable data with specific individuals. The Legislature should support AB 873 (Irwin) which seeks to clarify that “personal information” is limited to information that poses legitimate privacy or security risk to individuals. This will ensure that costs associated with unrelated data collection are minimized.

Digital advertising is the simplest, most direct, and least expensive way for many businesses to connect to customers who want information on goods and services they offer. The Legislature should support the concepts outlined in SB 753 (Stern), which seeks to clarify that CCPA doesn’t inadvertently disrupt the opportunity for businesses to reach customers, including small business partners, through web-based advertising. Community businesses are not interested in collecting or selling personal information.

Additional improvements include AB 1564 (Berman), which clarifies methods by which consumers can submit verifiable consumer requests, including through an email option rather than just an old-fashioned 1-800 number. AB 846 (Burke) ensures that loyalty programs will still be allowed under CCPA – so restaurants, hotels, wineries, salons, and other businesses can continue to build their customer base.

These common-sense bills will allow consumers to protect their sensitive information while supporting business growth both large and small, helping to keep California’s economic engine thriving.
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Editor’s Note: John Kabateck is California State Director of the National Federation of Independent Business.