National Data Privacy Week came and went in January. Although most people don’t mark it on their calendars or celebrate it, data privacy is a critically important issue, and how it is regulated greatly matters to businesses. Unfortunately, the federal government has been stifled for several years in enacting a single national privacy standard that balances consumer protection with data’s critical role in the digital economy. North Carolina Senate Bill 569, titled the Consumer Privacy Act, was proposed in the 2021 General Assembly, but the topic has not otherwise received much attention in the state legislature. 

For any bill on data privacy to move forward, it’s imperative that our state legislators understand the impacts of privacy laws, particularly in a state that does so much business with other states. For example, tourism is one of our top economic drivers, and the great majority of those visitors are coming from out-of-state. It’s important we keep our competitive edge by understanding how policy impacts commerce. 

My family knows a lot about how innovation can completely change an industry. We run a vacation rental booking business on the Outer Banks. When my father started the company, people made vacation rental reservations in person or over the phone, and we recorded their information in a handwritten ledger. We have always gone to great lengths to make each vacation experience highly personal and memorable. And that means collecting basic information about our customers and their travel companions. So it was always quite a large ledger.  

How times have changed! We no longer have a handwritten ledger or filing cabinets stuffed with customer information. Instead, our customers’ information goes directly into our secure, encrypted Cloud storage system.  

We believe strongly in consumer privacy and work hard to protect our customers’ data. We only collect the information we need, work with reputable vendors on the cutting edge of data security, and never sell customer information to data brokers. But our customers live all over the country, and more and more states are passing data privacy laws. Take a look at our neighbor Virginia, which passed a data privacy law that went into effect at the start of this year. That makes it the second state, after California, to enact consumer privacy legislation. If we pass our own framework in North Carolina, perhaps that will also spur our representatives in Congress to develop a federal data privacy law. 

U.S. House Representative Patrick T. McHenry of North Carolina, R-NC10, introduced a bill in late February proposing the creation of the Data Privacy Act of 2023. However, the bill is largely focused on financial institutions and modernizing financial data privacy laws. Given how many businesses in our state rely on customer data in addition to financial institutions and tourism companies, a bill focused on data privacy for the digital economy as a whole would benefit myriad types of businesses. 

Small businesses also need data privacy laws to be balanced and consider the vital role of data in the digital economy. I understand that policymakers are concerned that online data collection can harm marginalized communities or can be used to further discrimination. A solid data privacy law can ensure no online discrimination. 

But I’m concerned that overly stringent restrictions on data collection could hurt small businesses like ours that thrive on data-powered digital advertising. Data-powered online advertising is the primary way we find customers. It’s affordable and incredibly effective, because it allows us to match our ads to the audience most likely to be interested in our rentals. Instead of spending tons of money trying to reach the largest possible audience with our ads, we can narrow the audience down and see an incredible return on a modest investment. Most importantly, with online ads, we can compete against companies like Airbnb and VRBO that can afford to run ads during highly watched events like the Super Bowl.  

State and federal governments have a lot to contend with this year. But if small businesses are to continue to operate online in the modern digital economy, we must pass a data privacy law. We need a balanced law that protects consumers while maintaining the value of digital advertising — and let’s start here with an example in the Tar Heel state. Getting data privacy right should be what every small business owner asks of policymakers.