Stronger privacy laws might hurt smal business

Glenn W. Peterson

Any business based in California that has an online presence knows there are specific laws and rules that must be followed surrounding user privacy. Some of these rules are specific to ecommerce sites, some are specific to online advertising, and some are more general. While it is important to protect consumer privacy, it is also interesting to see some of the potential ramifications of expanding online privacy laws.

In May of last year, the entire European Union was automatically under the rule of the most sweeping internet privacy laws to date. As reported by The Street, the law is called the General Data Protection Regulation, generally referred to as the GDP. In essence, it requires any company to obtain a person’s approval before collecting any information about them online.

Some people heralded the GDP as a major step forward in protecting consumers. However, small businesses may well be suffering as a result of this new law. Some companies may even have gone out of business because of the changes. The costs to a company to comply with the GDP can be high. Marketing teams must spend increased amounts of money retooling websites and more. Even once initial changes are made, the entire system must be monitored.

Now, there are lawmakers in the United States who may be pushing for legislation similar to the GDP to be enacted here. Major corporations that already benefit from the bustling online advertising market may only profit further while smaller companies could be left struggling for their lives.