Business Leaders ask Mactaggart to Drop Initiative

Date: May 05, 2020

"We implore you to consider the human and financial costs ... and withdraw the initiative from the November 2020 ballot."

May 5, 2020
Alastair Mactaggart
C/O Californians for Consumer Privacy
[email protected]

Dear Mr. Mactaggart:

On behalf of the organizations listed below and our members, we respectfully request that you withdraw your proposed privacy initiative due to the economic uncertainty and personal hardships caused by the COVID-19 virus.

Businesses in California understand the importance of protecting personal information, we began implementing the technological and operational measures necessary to comply with the California Consumer Privacy Act (CCPA). But the CCPA is very confusing, the regulations still have not been issued by the Attorney General, and the compliance costs are extraordinarily high. In fact, the economic consulting firm commissioned by the Attorney General estimated that compliance would cost $55 billion and $50,000 for each small business.

Now we are facing an enormous economic challenge from the effects of the coronavirus. The pandemic has had an overwhelming impact on the small and medium-sized business sector, causing business failures, mass layoffs, lost wages, and employee furloughs. In the restaurant industry, forty-nine percent of California operators say they have temporarily closed their establishment. As a result, it is estimated that more than one million restaurant employees in the state have been laid off or furloughed since the beginning of the coronavirus outbreak in March. This represents at least 70 percent of the 1,467,000 employees that were working at California’s eating and drinking places in February.

Additionally, it has been reported small retail stores may never re-open and a survey by the National Federation of Independent Business (NFIB) found that 76% of small businesses have been affected by the crisis. Even those enterprises not directly regulated by the CCPA are impacted by its provisions as they are disproportionately impacted by the epidemic. In times like this, we believe it is unreasonable to add new mandates on businesses, higher compliance costs, and additional burdens on the state economy.

But the cost of compliance with the CCPA will pale in comparison to the resources needed to re-start businesses and re-hire employees throughout the state. The severity of the situation cannot be overstated. A recent New York Times article described the situation:

“Economists say there is little doubt that the nation is headed into a recession because of the coronavirus pandemic, with businesses shutting down and Americans being shut in. But it is harder to foresee the bottom and how long it will take to climb back.

“Smaller companies will be hit harder than large ones because of their limited access to credit and less cash in the bank. ‘There will be a swath of small businesses that simply won’t be able to survive this,’ Ms. Zentner added.” (Morgan Stanley Chief U.S. Economist Ellen Zentner)

Given the severity of the current economic situation, the new initiative and the corresponding mandates will impose additional burdens on employers and job seekers and harm the state economy at a time when we need to support the recovery.

If we are “all in this together,” we implore you to consider the human and financial costs of the proposed privacy initiative and withdraw the initiative from the November 2020 ballot.

Sincerely,

  • Acclamation Insurance Management Services
  • Allied Managed Care
  • California Asian Chamber of Commerce
  • California Black Chamber of Commerce
  • California Hispanic Chambers of Commerce
  • California Restaurant Association
  • California Small Business Association
  • Coalition of Small and Disabled Veteran Businesses
  • Culver City Chamber of Commerce
  • Flasher Barricade Association
  • Golden Gate Restaurant Association
  • Latin Business Association
  • Long Beach Chamber of Commerce
  • Monterey County Business Associates
  • National Federation of Independent Business, California
  • Pasadena Chamber of Commerce
  • Santa Monica Chamber of Commerce
  • Small Business California
  • Valley Industry & Commerce Association
  • West Side Chamber of Commerce

Copy: Members, Assembly Privacy and Consumer Protection; Assembly Judiciary; Senate Judiciary; Legislative Leadership

 

 

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