Data privacy legislation still under consideration by the Legislature could deliver a $21 billion hit to Florida’s economy. That’s according to watchdog group Florida TaxWatch, which on Wednesday released its own analysis of the bills’ fiscal impact.
“Affording consumers greater rights over their personal information and privacy is obviously a good idea, but policymakers have a responsibility to ensure they know the true cost of implementing consumer data privacy before enacting a comprehensive, wide-reaching law,” said Dominic Calabro, TaxWatch president and CEO.
The study, entitled “The Impacts of Consumer Data Privacy on Florida’s Economy,” looks at bills in the House (HB 9) and Senate (SB 1864). It takes particular aim at the House version, which includes giving consumers an ability to sue should companies fail to delete or correct information on individuals seeking to opt out of data collection.
According to the report, both pieces of legislation would deliver a hit to Florida’s “gross operating surplus,” or GOS, meaning the total profit of private enterprises sans the immediate costs and workers.
“HB 9 would lead to 10 new privacy restrictions, reducing Florida’s GOS by 3.9% or roughly $17.2 billion annually,” the report reads. “In comparison, SB 1864 would create nine new privacy restrictions, reducing Florida’s GOS by 3.5% or roughly $15.5 billion annually.”
Additionally, the bills could result in higher compliance costs for some small businesses that may not be able to afford it. That’s something that could create a disproportionate hit on mom-and-pop businesses, that unlike corporations don’t have a standing compliance department.
Florida’s GOS as of 2020 sat at around $441.22 billion, but each privacy restriction added could knock that number down by $1.72 billion.
“Our research indicates the impacts could be significant, with initial compliance costs between $732,000 and $2.5 million for a single affected firm and up to $21 billion economy-wide,” Calabro said.
“On top of this, between the two bills, Florida companies would be at risk of financially motivated and malicious lawsuits; smaller, less-equipped businesses would experience pressure to adopt data privacy measures in order to remain competitive; and those covered would have inadequate time to prepare the technical infrastructure needed, possibly resulting in noncompliance and costly litigation for failing to respond.”
The release of a fiscal impact study last year contributed to a bill dying before the end of the 2021 Session despite being passed by the House.
Calabro said while everyone agrees data privacy for consumers must be a concern, TaxWatch has highlighted the significant impact proposals would have on the economy.
“As the eyes and ears of taxpayers, we’re hopeful that our legislative leaders will heed these concerns, consider the thoughtful recommendations outlined in this report, and ultimately mitigate the adverse outcomes of implementing data privacy in an effort to continue providing the best, most effective protections for Floridians.”
The organization has offered recommendations that could allay concerns. Many of them already exist in similar privacy protection legislation in other states. That includes shielding firms from bad actors that may make mass deletion or opt-out requests, allow for a cure period for companies to fix oversights in addressing requests, and allowing a longer grace period for companies, giving them two years to prepare for the new requirements.
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