When New Jersey enacted a sweeping new data law in June, political professionals quickly realized it could disrupt the tools campaigns use to communicate with voters.
The law prohibits the sale or licensing of sensitive information and creates the nation’s most expensive registry for data brokers, along with a new category called “data collectors.” Registration fees range from $5,000 to $1.5 million. Failures to register or update information can trigger daily penalties, while violations involving sensitive information can carry fines of up to $50,000 per record.
As someone who has worked in New Jersey politics and digital communications for more than two decades, I understand the concern. Campaigns use information to identify communities, recruit volunteers, communicate with voters, and get out the vote. Data-driven communication gives candidates, advocacy organizations, and citizens an opportunity to connect.
But political campaigns may only be the first to feel the impact.
New Jersey’s measure is commonly described as a data broker law, but its reach extends beyond traditional data brokers. It also includes a much broader group of businesses as “data collectors,” including companies that have direct relationships with their own customers, readers, or users but sell or license that information to specialized firms that develop broader insights and audiences. These arrangements help organizations without large data teams understand markets, measure results, and compete.
That could pull many more organizations into an expensive and uncertain system, from a grocery store with a loyalty program to a local news publisher, an online clothing shop, or a neighborhood advertising agency, none of which would think of themselves as data brokers.
New Jersey goes further in another important respect. These restrictions cover categories of information organizations may use to understand and communicate with communities, including location, religious beliefs, health conditions, and demographic characteristics such as race or ethnicity. That kind of sensitive personal information does indeed deserve careful protection. But that protection should be the result of thoughtfully crafted legislation, not sweeping restrictions that could lead to loopholes and legal challenges.
New Jersey can still turn this episode into an advantage.
States that provide clear protections while preserving responsible uses of data will be more competitive. New Jersey can lead by clarifying who is covered, setting reasonable registration fees, establishing workable protections for small organizations, and adopting penalties proportionate to actual misconduct and harm.
Political professionals noticed the problem quickly because it threatened their ability to reach voters. But this isn’t even a partisan issue. The ability of voters to hear from candidates for public office is a vital part of our democracy. And in an era of deep political division, digital regulation stands out as a rare point of agreement.
In a national survey conducted by Echelon Insights for Internet for Growth, nearly nine in ten likely voters said almost every business depends on digital tools to succeed, while 91 percent said personalized advertising helps them find local businesses. Majorities of Republicans, Democrats, and independents also said they would be less likely to support candidates who vote to increase regulation of the digital tools small businesses use.
Most voters will probably never get around to memorizing Trenton’s legal definitions. But they can identify the value of tools that help them discover local businesses, support free content, and connect with organizations in their communities. They can also question whether regulations are calibrated to protect consumers or increasingly shaped by the revenue they generate. And they will understand when regulation makes those tools more expensive or less effective.
Rather than relying on narrow exemptions, we have an opportunity to strengthen the law for all New Jerseyans by protecting consumers while giving small businesses, nonprofits, publishers, and civic organizations clear, workable rules for responsible data use.
Scott Shields is a New Jersey-based political strategist, technologist, and communications professional.