The U.S. Chamber of Commerce has come out against proposed amendments to the Connecticut Data Privacy Act. On May 8, the Chamber of Commerce sent a letter to Gov. Ned Lamont, asking him to veto the proposed bill, SB 1356, if it comes to his desk.
“The U.S. Chamber of Commerce… believes that the Connecticut Data Privacy Act (“CTDPA”) strikes the right balance in providing data privacy protections for consumers while allowing for continued innovation. However, SB 1356 would amend CTDPA in ways that make it harder for consumers to obtain needed goods and services, restrict the ability of small businesses to compete, and impede innovation,” the letter, which was signed by Michael Blanco, stated. Blanco is the director of State and Local Policy for the Chamber Technology Engagement Center.
Blanco raised two specific objections: the data minimization requirements and changing “small business thresholds,” which would change the thresholds for what constitutes a small business
Right now, the Connecticut Data Privacy Act requires companies to disclose to customers what data it is collecting. Blanco believes that this is an “appropriate” regulation.
SB 1356 proposes that a provider can only collect data that a consumer requests.
“SB1356 would drastically change Connecticut’s data minimization standard and effectively prohibit the collection of data beyond providing or maintaining a product or service specifically requested by a consumer. This would significantly inhibit innovation as covered entities may cease to pursue consumer-friendly business uses for data throughout different times of product and service development,” Blanco wrote. “Such a strict standard threatens societally beneficial uses of data such as public safety, health, and financial inclusion.”
It would also decrease the likelihood of businesses and customers using artificial intelligence (AI), Blanco argued.
Presently, around 47% of small businesses in Connecticut use a platform with artificial intelligence—slightly higher than the national average, which is 40%, according to a study published by the Chamber of Commerce. Almost 90% of small businesses plan to increase their use of technology in the next two to three years, and 97% of businesses in Connecticut believe that AI will help their businesses in the future. In comparison, nationally, only 60% of small businesses believe that AI will help their businesses in the future.
“Additionally, small businesses who rely on personalization to reach new audiences will be placed at a disadvantage against their more well-resourced competitors,” Blanco wrote.
Sixty-four percent of small business owners in Connecticut are worried “that a patchwork of state-level tech policies will drive up legal/compliance costs,” according to the study from the Chamber of Commerce.
The second part of the bill that Blanco is worried about would change the thresholds for what constitutes a small business. Currently, the Connecticut Data Privacy Act exempts businesses that process the personal data of 100,000 consumers or less, and businesses that process the personal data of 25,000 consumers or less and derive 25% or less of their yearly revenue from the sale of personal data.
SB 1356 would change the exemptions, so only businesses that process the personal data of 35,000 consumers or less, and businesses that process the personal data of 10,000 consumers or less and derive 20% of their yearly revenue from sales of personal data, would qualify.
“SB 1356 would make Connecticut an outlier related to data privacy laws, harming its ability to attract businesses seeking to locate or relocate to the state,” Blanco wrote.
On May 7, the Legislative Commissioner’s Office finished reviewing SB 1356 and it was tabled for the Senate calendar.
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