In the digital age, data privacy has emerged as a rising concern, prompting states to enact laws that safeguard consumer information while also maintaining an online marketplace that has become foundational to our economy. The intent behind these measures is admirable, but the scope and implications of such laws must be carefully considered to not overly disrupt the online marketing that has become a key to growth for small and large businesses alike.

The impact on small businesses is particularly important in Maine, where over 80% of our businesses are classified as small and are the backbone of the economy. Sensitive personal data should be protected, and the Maine State Chamber of Commerce supports the commonsense reforms enacted in other states.

Any legislation Maine adopts, however, also needs to protect businesses’ ability to compete and attract global customers through targeted marketing and e-commerce. We can do both, but unfortunately the Legislature’s effort on privacy may detach Maine businesses from the global online marketplace and must be fixed.

Last year, two bills aimed at addressing data privacy were introduced in the Maine State Legislature: L.D. 1973 sponsored by Sen. Lisa Keim and L.D. 1977 sponsored by Rep. Maggie O’Neil. The Legislature’s Joint Standing Committee on Judiciary has worked through the intricacies of these policy proposals over the last several months with the bill sponsors to find areas of commonality. On March 26, the committee voted on both measures.

Without a federal policy in place, individual states have taken it upon themselves to address this issue. To date, 14 states have enacted consumer data privacy laws and 13 of those states share what is referred to as the “Connecticut Framework.” Like those states, Maine now finds itself at a crossroads regarding data privacy legislation.

Small businesses drive our local economies, create jobs, and are the catalysts behind Maine innovation and entrepreneurship. Any policy that affects them should be approached with caution and deliberation.

According to a report titled “Empowering Small Business: The Impact of Technology on U.S. Small Business,” 87% of small businesses acknowledge that technology platforms have enhanced their operational efficiency. From online storefronts to targeted digital advertising, technology has enabled small businesses to compete in the global marketplace. Without question, technology has revolutionized the way small businesses operate; it served as a critical lifeline for many businesses during the COVID pandemic.

While large technology companies are at the core of the data privacy conversation, we cannot forget that small businesses rely on them as a critical tool to reach their target audience and grow their customer base. The local bicycle repair shop, wine bar, outdoor retailer, or quintessential Maine bed and breakfast will all be impacted if they cannot market and promote their business via the larger technology companies’ services that most small businesses cannot afford on their own.

The legislation pending in the Legislature, L.D. 1977, would directly impact their ability to do targeted marketing. For small businesses, targeted marketing ensures that a product gets in front of the appropriate set of eyes, rather than a broad audience whose interests may differ from the product or service being promoted.

Not only would a narrow data privacy law restricting the use of certain types of data severely impede businesses’ ability to effectively market their products and services online, it would also hamper small businesses’ who use these platforms to recruit employees at a time when labor shortages are impacting all employers.

Data privacy is important in today’s interconnected world; however, policymakers must tread carefully to avoid unintended consequences for Maine’s small businesses. As currently drafted, L.D. 1977 would stifle innovation and hinder e-commerce growth. By advocating for policies that strike a balance between consumer privacy and business needs, Maine can continue to foster a thriving entrepreneurial ecosystem while safeguarding consumer’s sensitive information.

The scope of the Maine Data Privacy and Protection Act that is being considered under the L.D. 1977 majority report will have far-reaching consequences for small businesses by cutting off the ability to internet platform data to conduct targeted advertising. Rather than replicating sensible protections that exist in other states, Maine is proposing to shutoff our businesses from the current method of reaching customers. The Maine State Chamber of Commerce urges alignment with other states to ensure the greatest level of compliance, feasibility, and to keep Maine businesses competitive.

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