Balancing data privacy and small business growth

In the digital age, data privacy has emerged as a growing concern, prompting states to enact laws that protect consumer information while preserving the online marketplaces that are the bedrock of our economies. While the intentions behind these measures are laudable, the scope and impact of such laws should be carefully considered to avoid unduly disrupting online marketing, which is key to growth for small and large businesses alike. must be carefully considered.

The impact on small businesses is especially significant in Maine, where more than 80% of our businesses are classified as small and are the backbone of our economy. Sensitive personal data should be protected, and the Maine Chamber of Commerce supports common-sense reforms enacted in other states.

However, any law adopted by Maine must protect businesses' ability to compete and attract customers around the world through targeted marketing and e-commerce. We can do both, but unfortunately Congress' efforts on privacy have the potential to cut Maine businesses off from the global online marketplace, so we need to fix it.

Last year, two bills aimed at addressing data privacy were introduced in the Maine Legislature. LD 1973, hosted by Senator Lisa Keim, and LD 1977, hosted by Representative Maggie O'Neill. Congress' Joint Standing Committee on the Judiciary has worked with bill sponsors over the past several months to consider the intricacies of these policy proposals and find common ground. On March 26, the committee voted on both bills.

With no federal policy in place, states are forced to address the issue on their own. To date, 14 states have enacted consumer data privacy laws, and 13 of those states share what is called the “Connecticut Framework.” Like these states, Maine is currently at a crossroads regarding data privacy laws.

Small businesses drive local economies, create jobs, and are catalysts for innovation and entrepreneurship in Maine. Policies that affect them must be approached carefully and deliberately.

According to a report titled “Empowering Small Businesses: The Impact of Technology on U.S. Small Businesses,” 87% of small businesses credit technology platforms with improving operational efficiency. From online storefronts to targeted digital advertising, technology is enabling small businesses to compete in global markets. Without a doubt, technology has revolutionized the way small businesses operate. It served as a critical lifeline for many businesses during the coronavirus pandemic.

While the data privacy debate centers around big tech companies, it's important to remember that small and medium-sized businesses rely on them as a critical tool to reach their target audience and grow their customer base. Your local bike repair shop, wine bar, outdoor retail store, or typical Maine bed and breakfast can't market and advertise itself through the services of a big technology company that most small businesses can't afford on their own. All will be affected.

The legislation pending in Congress, LD 1977, will directly impact their ability to conduct targeted marketing. For small businesses, targeted marketing ensures that your products reach the right people, rather than a broader audience with interests different from those of the product or service being advertised.

Narrow data privacy laws that restrict the use of certain types of data not only significantly hinder companies' ability to effectively market their products and services online, but also limit the use of these platforms during times of labor shortages. It also hinders small and medium-sized businesses from hiring employees. It affects all employers.

In today's interconnected world, data privacy is important. However, policymakers must tread carefully to avoid unintended consequences for Maine's small businesses. As currently drafted, LD 1977 would stifle innovation and hinder the growth of e-commerce. By advocating for policies that balance consumer privacy with business needs, Maine can continue to foster an entrepreneurial ecosystem while protecting sensitive consumer information.

The scope of the Maine Data Privacy and Protection Act, as considered in the LD 1977 majority report, would have far-reaching consequences for small businesses by cutting off the ability of Internet platform data to conduct targeted advertising. It will have an impact. Rather than replicating the sensible protections that exist in other states, Maine is proposing cutting off businesses from their current methods of contacting customers. The Maine Chamber of Commerce urges collaboration with other states to ensure the highest levels of compliance and feasibility, and to keep Maine businesses competitive.

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