COMMENTARY: Streamlined data privacy law among top issues for small businesses in 2023

COMMENTARY: Streamlined data privacy law among top issues for small businesses in 2023

March 15th, 2023

National Data Privacy Week came and went in January. Although most people don’t mark it on their calendars or celebrate it, data privacy is a critically important issue, and how it is regulated greatly matters to businesses.

Unfortunately, the federal government has been stifled for several years in enacting a single national privacy standard that balances consumer protection with data’s critical role in the digital economy. This could be the most important issue Congress tackles for small businesses next year.

My family knows a lot about how innovation can completely change an industry. We run a vacation rental booking business on the Outer Banks.

When my father started the company, people made vacation rental reservations in person or over the phone, and we recorded their information in a handwritten ledger. We have always gone to great lengths to make each vacation experience highly personal and memorable.

And that means collecting basic information about our customers and their travel companions. So it was always quite a large ledger.

How times have changed! We no longer have a handwritten ledger or filing cabinets stuffed with customer information. Instead, our customers’ information goes directly into our secure, encrypted cloud storage system.

We believe strongly in consumer privacy and work hard to protect our customers’ data. We only collect the information we need, work with reputable vendors on the cutting edge of data security, and never sell customer information to data brokers.

But our customers live all over the country, and more and more states are passing data privacy laws.

And while we are not the intended target for these laws (we only have a few customers in California, for example), the prospect of tracking and determining if we have to comply with multiple state data privacy laws, let alone 50, is daunting, if not impossible.

Small businesses also need data privacy laws to be balanced and consider the vital role of data in the digital economy.

I understand that policymakers are concerned that online data collection can harm marginalized communities or can be used to further discrimination. No one should be discriminated against ever, online or offline.

But I’m concerned that overly stringent restrictions on data collection could hurt small businesses like ours that thrive on data-powered digital advertising. Data-powered online advertising is the primary way we find customers. It’s affordable and incredibly effective because it allows us to match our ads to the audience most likely to be interested in our rentals.

Instead of spending tons of money trying to reach the largest possible audience with our ads, we can narrow the audience down and see an incredible return on a modest investment. Most importantly, with online ads, we can compete against companies like Airbnb and VRBO that can afford to run ads during the Super Bowl.

Congress has a lot to contend with this year. But if small businesses are to continue to operate online in the modern, national digital economy, Congress must pass a federal data privacy law.

Small businesses cannot track a hodgepodge of state regulations, and we need a balanced law that protects consumers while maintaining the value of digital advertising. Getting data privacy right should be what every small business owner asks of policymakers.

Clark Twiddy is publisher of WOBX and president of Twiddy & Company celebrating 45 years as a family-owned business.

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