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Federal data privacy laws needed to help small businesses

(Photo by Yuri Samoilov via flickr/Creative Commons)

There’s no question that Covid has hit many small business owners hard over the last few years. The pandemic has forced companies to contour their business models to meet the changing needs of their customers. My business, TEASPRESSA, is no exception.

Before Covid, we maintained four stores across two separate states. When the lockdowns started, though, TEASPRESSA was forced to shutter our physical venues. I made the difficult decision to close our in-person locations—and we almost lost everything in the process. But our company found refuge in online sales. Shifting our focus to digital operations, we managed to not only survive but to expand our operations. We now ship our products all over the U.S., from Arizona to Maine.

Allison DeVane

Whether we are digitally connecting with our subscribers or packaging tea orders, we work hard to use data to benefit our customers and protect their information. However, operating online and across state lines creates new challenges for small business owners: navigating the patchwork of state privacy laws.

Since 2018, five states have passed laws regulating the commercial collection and use of personal data. And since January 1 of this year, at least 25 states have introduced their own privacy bills. This current setup causes confusion for customers, creates greater security risks, and increases the compliance burden for businesses like mine. Now is the time for Congress to enact a federal privacy law.

No matter where they live, customers need to trust that the businesses they shop with will protect their online data. A unified privacy law will help us get there. The variability in data privacy laws means customers have inconsistent rights and lack clarity about how their data is handled. Similarly, the changing requirements across states could force small businesses to spend more time and resources on navigating each state’s rules, which leads to higher costs for everyone.

That has been my experience. The patchwork of privacy laws is actually very similar to a situation I encountered while taking part in an event in Texas. There, local sales tax regulations can vary by zip code, meaning that we had to track every location we were operating, compare the zips, and then ensure that each transaction was compliant with each locale’s unique regulations. It was a logistical nightmare—and a clear illustration of what it’s like dealing with various state-level privacy laws.

It’s extremely difficult for small businesses to plan when there’s so much uncertainty. Unlike big corporations, small business owners don’t have the staffing and resources to navigate complex legal requirements. And like most small business owners, I’d much rather spend time investing in my business, hiring new employees, or expanding and upgrading our operations than navigating red tape.

According to the Information Technology & Innovation Foundation, in the absence of a federal privacy law, a 50-state patchwork of privacy laws will cost our economy $1 trillion over the next ten years, with $200 billion of that cost being paid by small businesses. This includes higher costs for lawyers to help with compliance, market inefficiencies, and losses due to unrealized growth potential because of decreased investment in marketing, research, and development.

Senators Mark Kelly and Kyrsten Sinema have been strong advocates for small businesses. Kelly secured a $100 million investment in small businesses, and Sinema recently introduced a bipartisan bill making it easier for businesses to grow and create jobs. Now, I’m calling on Senators Kelly and Sinema to step up and lead Congress in passing a federal data privacy law that would give businesses the certainty we need to grow and succeed in this new world. If Congress doesn’t act fast, states will continue to pass their own privacy rules and regulations, leading to even more confusion and higher compliance costs for small businesses.

As the pandemic demonstrated, small businesses face more challenges than ever, but they continue to be the backbone of our economy. We are innovators. We are job creators. We are staples in our communities and across the nation. For small businesses to thrive, we need Senators Kelly and Sinema to fight for Arizona small businesses by enacting a federal data privacy law.

Allison DeVane is the founder of TEASPRESSA.

 

 

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