The unintended consequences from hastily enacted legislation often outweigh any benefits, and a data-deletion bill moving rapidly toward passage in the legislature may leave all Californians wishing they could hit the “undelete” button.
The bill under consideration -- the Delete Act (SB 362) -- would create a government-mandated “kill switch” forcing each of the hundreds of companies in California’s data industry to permanently delete any information it has on a California consumer when utilized.
Notably, consumers already have the right to request the deletion of data held by individual data brokers under the California Consumer Privacy Act (CCPA), so a new tool for that purpose is duplicative, unnecessary, and damaging.
Far worse, the legislation would authorize mass deletion requests from self-interested companies and pay-to-play privacy services on behalf of large groups of consumers.
Californians can look forward to a flood of solicitations for monthly subscription services that add no real value, while identity thieves hide in the flurry of offers to steal information and empty bank accounts.
Some companies may also use this legislatively mandated tilt in the playing field to sign up their users for the deletion service, so data from those deleted users will no longer be available to their competitors.
While companies facilitating such deletions will still be able to use first-party data from their users, their competitors without direct access will lose the ability to use such data.
As California residents become deleted from those independent data providers, the remaining data will become increasingly corrupted, incomplete, inaccurate, and unusable. The impact on individuals and businesses in California from the loss of such data will be severe.
Let’s show why.
Imagine a young entrepreneur who wants to start a gourmet coffee shop where the growing number of young remote workers in her community can relax and socialize.
If this legislation is enacted, she will have difficulty researching the best location for her business, as research sites will no longer have the data for tools to show average income or work-from-home status in local neighborhoods.
When she goes online to apply for a start-up loan, the lender could reject her application or force her to fill out a blizzard of additional paperwork because it can no longer validate her identity online with information it used to be able to obtain, such as her former addresses or the vehicles she used to own.
Once she opens her doors, she will find it difficult and expensive to promote her business to potential customers, as her local advertising agency will no longer be able to deliver digital ads to her core demographic of 18- to-34-year-olds who live within a 10-minute drive of her shop, as they can no longer get that data from independent data providers.
As she expands her business and builds a loyalty program for customers, she will find that many of those customers no longer receive her news and offers, as her database cannot be “cleaned” -- or updated -- with correct addresses and other information from data providers.
Even when she donates extra coffee to her favorite non-profit, the community food bank, she may find it has been hit hard by those same data issues, as it can no longer reach potential donors online who live in the community and have the financial means to support its work.
Put simply, tens of millions of Californians depend on the state’s complex and vital data marketplace every day, and the Delete Act will cause a host of unintended negative consequences for every resident and business in the state.
With significant revisions, SB 362 would be a sledgehammer shattering the independent data marketplace.
Businesses will lose the data they need to reach customers, non-profits for fundraising, academics for research, law enforcement for investigations, government agencies for services, candidates for campaigning, and security organizations for fraud prevention, among many other beneficial uses.
The only way to ensure the damage from the bill does not dramatically outweigh any intended benefits is to postpone consideration until the 2024 session, so these complex issues can be thoughtfully and thoroughly vetted and addressed.