When a digital startup goes onto the internet its reach becomes national and international, requiring the startup to comply with the laws where their customers reside. This can create headaches for startups with little or no budget for legal advice. One of the most important legal issues a digital startup must grapple with is consumer privacy.
Unlike the European Union with the General Data Protection Regulation (GDPR), the United States does not have a comprehensive, federal consumer privacy law. Thus, states are left to enact consumer privacy protections to protect their citizens. Until California passed its Consumer Privacy Act (CCPA), no state had enacted privacy legislation nearly as broad as the GDPR.
The greater protection that privacy laws provide, the greater the burden for online businesses to comply. In this week’s lesson, we emphasize this point by examining the extensive protections that the CCPA provides consumers. The global nature of the internet presents challenges for online businesses in determining whether to comply with the GDPR, CCPA, or privacy laws of other states or countries. But it may not be practical for online businesses to have different privacy protocols and compliance systems depending upon the location of consumers.
What advice would you give a startup as to its privacy policies and protocols? Should the startup assume that it may have sales in the European Union or California then establish privacy policies and protocols that satisfy the strictest privacy standards? Or should a startup take a more gradual approach, complying with the privacy laws for only those states and countries in which it is presently doing business?