Privacy Regulations Must Balance Business, Consumer Needs
There is notable momentum in both Congress and the state capitols to pass privacy legislation. The number of individual legislative proposals regarding privacy has been ballooning at both the state and federal levels. The cause is increasingly sophisticated technologies that allow data to be collected about people without their knowledge. Similar questions can be raised about the use of other forms of data collection, e.g., telephone books, customer lists. Such low-tech means of establishing lists are likely to be more relevant to most small-business owners at this time than generating them from the Internet.Privacy legislation could negatively impact small firms in at least two ways. The first is that ill-conceived legislation could put small businesses at a severe competitive disadvantage against larger ones in marketing and selling to their customers. The second is that the wrong legislation could impact a small business' value. A customer list is a valuable asset; if it cannot be transferred as part of a sale, the value of many small businesses would decline notably.
Privacy protections may be needed, but can hamper good individual practices if taken to the extreme, as many consumer groups are advocating. A balance in small business privacy laws must be reached so consumers are comfortable with the level of protection afforded their personal information, and small business owners are not strapped with new regulations and liabilities.
