Congress is considering the American Privacy Rights Act, sweeping privacy legislation that could leave Main Street businesses vulnerable to lawsuits from greedy trial lawyers. The bill includes private rights of action that authorize ADA-style “drive-by” lawsuits targeting small businesses for privacy violations of service providers they use for marketing to consumers to grow their businesses. 

This bill’s authorization of lawsuits is being touted as an anti-big tech effort to address Americans’ privacy concerns over the misuse of their personal data by internet service providers and big tech giants. However, those same multibillion-dollar tech companies are spared the brunt of lawsuits under this proposed bill. Instead, trial lawyers will be incentivized to go after small businesses to collect quick settlements.  

Ultimately, drive-by lawsuits on small businesses and blanket protection from liability for service providers will not protect Americans’ data and will result in job losses on Main Street.

Congress must protect small businesses from abusive demand letters and frivolous lawsuits that threaten their existence.

• Retailers support a national data privacy law that establishes protections for consumer data in a consistent manner for all businesses.

• Retailers use consumer data to improve services and tailor products to their customers.  

• Small businesses must sign take-it-or-leave-it contracts from vendors for necessary services and cannot exercise real control over how their vendors conduct business. 

• Small businesses cannot grow if they cannot use consumer data services to market their products to consumers.  

• Drive-by lawsuits under the APRA for their vendors’ violations will threaten small businesses’ ability to market their products and services to customers.  

• By attaching legal peril to retailers’ use of services to improve their marketing reach, this legislation will restrict retailers’ ability to compete and grow their businesses. 

• Under the APRA, trial lawyers will feast on quick settlements forced on small businesses for selecting the wrong service provider or for minor compliance errors.  

• Small businesses take great care to cultivate long-time relationships with customers that lead to sales growth.  

• Small business owners should not be penalized for leveraging consumer data solutions to compete and grow their businesses.  

Retailers support:

• National privacy law: Congress should establish a single, uniform national privacy law that requires all businesses to protect consumers in a consistent way no matter where they live.  

• Transparency for consumers: Consumers should be informed of the categories of personal data that businesses collect and how that data is used by them.  

• Preserving customer services and benefits: A federal data privacy law should preserve the ability of consumers and businesses to voluntarily establish mutually beneficial business-customer relationships, including rewards and loyalty programs.  

• Responsibility for own conduct: Any privacy law should make all businesses responsible for their own conduct. It should not expose them to liability for privacy violations by their business partners, including contractors, franchises and other businesses.  

• Statutory obligations for all: Small businesses should not be forced to hold other businesses to privacy standards through contracts. All businesses that handle consumer information should have direct privacy obligations under the law.  

• No exemptions: Every industry sector that handles consumer information should have equivalent legal obligations to protect consumers’ data privacy under the law.