Florida’s So-Called Data Privacy Bills Will Devastate the Economy | Council For Citizens Against Government Waste

Florida’s So-Called Data Privacy Bills Will Devastate the Economy

The WasteWatcher

Florida has become the top destination to which businesses and families across American are choosing to relocate.  It is not only the weather but also low taxes and business-friendly regulations that are attracting millions of people to the Sunshine State.  But the sun will stop shining and Florida will become far less attractive if the legislature passes two bills that are being considered in the House and Senate.  People will not only stop coming to Florida but also start leaving the state for what will suddenly look like a more inviting business and family-friendly climate in other states.

Under the guise of protecting consumers, HB 1547 and its companion in the state Senate SB 262 would impose unprecedented, heavy-handed regulations on digital advertising.  Unfortunately, neither of these bills will accomplish that objective.  Instead, they will cause harm to small and middle size businesses in Florida by imposing the most onerous restrictions of any state on how these businesses can conduct online and digital marketing to their customers.  A November 2022 study conducted by Dr. J. Howard Beales and Dr. Andrew Stivers on behalf of NERA Economic Consulting on the economic impact of restricting online advertising found that small publishers and advertisers would see a loss of 50 to 70 percent of revenues, and an increase in the competitive advantage of large platforms, which would be the likely outcome if legislation like HB 1547 or SB 262 was enacted.

Florida small business owner Alexander Fedorowicz of the skin products company QRxLabs in Miami described the adverse impact these bills would have on his business in a March 27, 2023, Florida Politics op-ed.  He wrote, “Digital advertising … is how we connect with new customers and grow.  These platforms are affordable, easy to use, and a big part of our success. … Digital ads help us compete and win against gigantic global beauty brands with almost unlimited advertising budgets.”  Fedorowicz further explained the benefits to targeted advertising, and that if these two bills are enacted into law, digital advertising will become too expensive for small businesses.  They would go “beyond privacy and overregulate data and e-commerce in ways that will hurt small businesses and risk the livelihood of their owners and employees, like my 18 local workers.”

If either bill is enacted into law, consumers would see fewer ads for products that they have previously purchased, local publishers already having difficulty surviving online would see a drop in digital advertising revenue, and small businesses would find it harder and more expensive to reach customers online, threatening their ability to thrive and grow.  Instead, the government will control what consumers see or hear by restricting targeted advertising intended to meet their needs.  The legislation also forces private companies to provide sensitive information about how they provide their services and gives the government widespread authority to interpret the law, which could lead to greater controls over online speech.

In practical terms, if someone owns a dog and wants to receive digital advertising or sales marketing emails or digital advertising with coupon codes for discounts on the dog’s favorite chew toy, such targeted advertising would be banned under HB 1547 and SB 262.  Instead of seeing these deals, and ads for other relevant and needed products and services for the dog, there will instead be a constant stream of digital advertising for everything under the sun.  Even age-inappropriate advertising could be seen by everyone, including young children.  Targeted advertising allows the consumer to see only those things they are interested in possibly buying or participating in, thereby giving them what they want at a low advertising cost to small businesses.  And if they do not want to see such ads, they have complete control over how to stop them.

As a result of this existential threat to Florida business, consumers, families, and taxpayers, the Council for Citizens Against Government Waste (CCAGW) launched a multi-media advertising and lobbying campaign against HB 1547 and SB 262 that begins on March 31, 2023.  The effort includes television, radio, and digital ads, letters to the legislature, and activating CCAGW’s 156,139 members and supporters across the state to oppose the legislation.

Increasing small business costs and reducing their revenues will result in one of two things.  Either the business will pass along the increases to the customers in the form of higher prices, and potentially risk losing customers, or they will simply shutter their doors, or relocate the business to another state with more favorable regulatory conditions and stop selling to their existing customer base in the state with the higher regulatory impact.

Meanwhile, Congress is getting closer to enacting a consumer data privacy protection law that will provide a much-needed national framework covering all Americans.  On March 1, 2023, the House Committee on Energy and Commerce held a hearing to review legislation from the 117th Congress to pave the way for more discussions and bill drafting in the 118th Congress.  This is an opportunity for state legislators and governors across the country to reach out to Congress and provide their views on how their residents can be best served under a new national privacy regime.  The state-by-state approach that is occurring in statehouses across the country only serves to increase consumer costs and create a confusing array of laws and regulations that those engaging in online interstate commerce will be required to navigate. 

Notably, the provisions of legislation like HB 1547 and SB 262 that restrict targeted advertising were not included in the data privacy bill that was voted out of the Energy and Commerce Committee at the end of the 117th Congress, and such restrictions are not likely to be included in the bill the committee will consider in the 118th Congress.  That makes the Florida bills even more of an outlier in the effort to protect consumer data privacy.

States like Texas and Florida have worked hard to enact laws and promulgate regulations that have allowed them to experience continual economic growth, and attract residents from other states.  Overzealous and perhaps uninformed members of the Florida legislature who are trying to enact HB 1547 and SB 262 bills may not realize the impact the bills will have on harming small businesses and driving residents away from the state.  CCAGW will be working hard to stop the enactment of these bills, which will make Florida more like California than Texas, which would be far from a sunny outcome.

co-written by Tom Schatz and Deborah Collier

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