Starting and running a Maryland business can be difficult, especially for small business owners and bioinnovation companies. Our state even recently ranked among the worst places to start a business. While Maryland has seen some progress in recent months to reverse this trajectory, such as bringing in new investments from the tech sector, it is vital that Maryland lawmakers not create more difficulties for small businesses and undermine the progress of Maryland’s growing tech and life science industries.
Maryland’s lawmakers are making a strong push to advance the Maryland Online Data Privacy Act of 2024 this year. While well-intentioned, there are several flawed provisions remaining in the bill that could have sweeping consequences for our state’s economy.
The bill has the potential to create opt-in requirements for vital functions like content personalization and marketing, which would require users to designate whether they would like to receive tailored advertising and content recommendations. However, content personalization is one of the functions that consumers ask for most, and while they may readily consent to it, bombarding them with prompts specific to viewing personalized content would significantly degrade their online experience. Additionally, small businesses have increasingly turned to digital marketing in recent years to reach new and existing consumers, but the bill’s opt-in requirement would make Maryland customers far more challenging to reach.
While the Senate version of the bill eliminated the content personalization opt-in provision, the House version of the bill still includes this damaging clause. This provision may seem small, but in reality, it creates a massive burden for smaller companies, and must be removed from the final version of the bill.
As legislators work to reconcile the Senate and House versions of the bill, they must balance the need for comprehensive data privacy with the need to support Maryland businesses. The current versions of the bill include data minimization standards, which means consumers may not have access to new website features or services unless they request them, which could result in Maryland consumers getting a different experience compared to consumers throughout the rest of the country. This provision language is more restrictive than current European standards. Not only does this provision hinder small business offerings, it may also restrict bio- and tech-innovation within our state if Maryland consumers cannot readily access website features that other states can easily view. The bill similarly includes an overly burdensome Data Protection Assessment (DPA) clause, requiring DPA vastly beyond similar requirements in other states. Performing the same intensive, time-consuming assessment over and over on the same processes that have not changed does not offer any meaningful privacy protection and would severely impact small and mid-size companies who do not have teams of compliance officers or attorneys that can quickly make these assessments.
Adding these complications would be another burden on many small businesses and stifle emerging growth in Maryland innovation. As legislators consider this legislation, I urge them to think of ways to bolster data privacy protections without hurting Maryland’s entrepreneurs.
Maryland Tech Council
