Technology has advanced rapidly, prompting increased privacy concerns in various aspects of our lives. In response, legislators have proposed the American Digital Protection Privacy Act (ADPPA) to bolster consumer privacy protections. While the intentions behind the ADPPA are commendable, it is crucial to recognize the potential harm it may inflict upon small businesses.
Balancing privacy and survival: How the proposed ADPPA threatens small businesses
June 7, 2023
One of the primary provisions of the ADPPA is the requirement for businesses to obtain explicit consent from consumers before collecting or sharing their data. Although safeguarding privacy seems reasonable, this places a substantial burden on small businesses. Take Milkweed Arts, for instance, an Arizona small business that specializes in handmade art and craft workshops and supplies. Complying with the ADPPA’s explicit consent requirement would demand significant resources and a time-consuming process to obtain consent from each individual customer.
Moreover, the ADPPA mandates the provision of an opt-out option for customers regarding data collection. While seemingly fair, this provision severely limits small businesses’ ability to understand their customers and cater to their specific needs. Without access to data, small businesses will struggle to compete with larger corporations that possess greater resources for market research and product development.
Additionally, the ADPPA introduces substantial fines for businesses found in violation of consumer privacy rights. While this may deter non-compliance, the burden falls disproportionately on small businesses. Large corporations can afford teams of legal and compliance specialists, while small businesses lack the same resources to navigate the complex legal landscape, making them more susceptible to substantial fines.
Furthermore, targeted advertising is an essential tool for small businesses, allowing them to reach their desired audience efficiently. However, the ADPPA’s impact on targeted advertising is concerning. It could deprive small businesses like Milkweed Arts of the ability to effectively compete with larger corporations that possess more significant advertising budgets. The ADPPA’s requirements for explicit consent and data collection may create administrative burdens, diverting resources away from critical business operations.
In conclusion, the ADPPA, while striving to protect consumer privacy, could have unintended consequences for small businesses. The demanding requirements for data collection and the potential for significant fines would impede small businesses’ ability to compete with larger corporations and provide customers with tailored products and services. Policymakers must consider the detrimental impact on small businesses and seek a more balanced approach that safeguards privacy without compromising small business viability. By doing so, we can ensure privacy protection while fostering a thriving small business ecosystem that benefits both entrepreneurs and consumers alike.