New Florida law strikes wrong balance between privacy, innovation

Political solutions crafted by policymakers all too often cater to the lowest common denominator in society. Lawmakers air on the side of restrictive regulations to try and mitigate every potential ill in a given area of the economy or culture. After all, politicians fear being seen as ineffective to solve issues. In many cases, this leads to tragic, destructive overcorrections. Such is the case with legislation that recently moved through the Florida state legislature. This digital transparency and privacy bill, SB 262 will substantially harm Florida’s booming economy.

The legislation severely restricts data collection practices by Florida businesses. It carries the potential to altogether eradicate targeted advertisements of any kind in the state. While proponents of the law are framing this as an attack on big tech companies, it is ultimately small businesses that will pay the biggest price.

Proponents would again point to the fact that the law has a $1 billion per year revenue requirement to fall under the scope of the legislation. This criteria is used to claim small businesses will not be impacted. However, this ignores the key link between big businesses and small businesses, especially in a state as broad and diverse as Florida.

So many policymakers and observers imagine small businesses compete with larger ones for customers. On some level this is true. However, in a much greater sense, small businesses rely on bigger ones to grow and thrive. Alexander Fedorowicz, the founder of a Miami-based skincare company, says, “Digital advertising through Google, Facebook, Instagram, Amazon, and eBay is how we connect with new customers and grow.”

It is not just the big companies who will be hit. It will be the ads bought and paid for by small businesses that will no longer get in front of potential consumers. It’s no small wonder why small business owners like Fedorowicz are raising the alarm about this proposal. “The so-called ‘technology transparency’ bills would make Florida the first state to regulate sharing non-personal data like the type of phone someone uses, their preferred language, or if they clicked on an ad. This information does not raise privacy risks and is critical to small business advertisers,” he continued.

This brings the discussion back to that aforementioned “lowest common denominator” when it comes to privacy. Yes, many in the state of Florida – and around the country – want a better handle on their online privacy. However, online data collection by big tech companies is the lifeblood of many upstart businesses that help put food on the table for many families. There have to be tradeoffs from a public policy perspective that do not harm the latter group for the desires of the former. 

In this instance, there are many who rely on data collection and the existing equilibrium online to sustain their businesses. Some businesses may be able to exist on non-targeted ads. However, those are the ones with the resources to blanket inefficient advertisements to both everyone and no one in particular. In this way, the Florida law supposedly targeting “Big Tech” will in fact harm small businesses more. Such is almost always the case with regulations like this. Big businesses might be inconvenienced, but otherwise have the tools to deal with compliance costs. Small businesses are not so lucky.

Beyond being disastrous for the small business community in the state, it will also have a ripple effect outside of the state. If Floridian businesses have hopes of shipping their products and services to other states, this proposal puts them at a severe disadvantage. Their competitors across state lines will have the ability to put out targeted ads and collect data. This new law will limit the growth potential of any business that operates primarily in the Sunshine State.

Once signed, this also sets a bad precedent for governance. The vague language of the bill now gives the state government the ability to change the scope of the law at a later date. This creates uncertainty and would give state lawmakers the ability to make arbitrary changes to punish businesses for whatever reasons they choose.

As technology advances and businesses begin to utilize it more and more, there will be challenges. It is not wrong of lawmakers to try and find that balance between privacy and innovation. However, the Florida tech privacy law strikes an uneven exchange that would hurt so many of the entrepreneurs that were drawn to the state precisely because of its prior business-friendly environment. Lawmakers should work instantly to mitigate the impacts of the law once it takes full effect, or even work to roll it back to prevent serious damage.