Opinion: Proposed changes to the American data protection laws will hurt the economy

Do you really know how your online data is being used? In light of major scandals involving companies like Facebook and Apple, most people want to know what data companies are collecting and how they use it.

In response to the public’s concerns, Apple CEO Tim Cook announced in a conference Oct. 24 that he supports changing American laws to reflect the data laws of the European Union, according to USA Today. Cook is not the only major supporter of new data laws. USA Today mentioned Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai also support stricter regulations in the U.S.

The EU changed its laws on data collection and usage in May. The General Data Protection Regulation has 99 articles that protect the data rights of those in the EU. NPR called the new regulations the “biggest change to privacy laws in history.” 

While changing the data laws in the U.S. to reflect the GDPR could give users more control over their information, ultimately it would be counterproductive for the economy if American companies follow in the footsteps of the EU.

The laws require companies to ask permission before collecting data on users. This includes information such as electronic medical records and mailing addresses. NPR also reported that companies must allow users to delete the data collected on them at any time. In other words, if you live in Europe, you have control over the data collected about you.

All internet companies, including American-based companies such as Google, are required to abide by these regulations for anyone living in the EU, NPR reported. However, European citizens living in the U.S. are not protected by these regulations.

Implementing new regulations in the U.S. may be unnecessary. Some American companies responded to the new data laws by giving users more control over their data. Apple unleashed a new privacy portal which gives users the opportunity to see how their data is being used and delete their data if they want, according to USA Today. 

More importantly, new data regulations could lead to problems for businesses and the economy.

Stricter data regulations can lead to monopolies. The Wall Street Journal reported late in May that the GDPR helped Google receive more revenue from advertisements than many of its competitors because Google collected consent from more individuals to create targeted advertisements. These targeted advertisements cost as much as five times more than general advertisements and bring in more revenue for advertising companies. 

These new regulations would harm small business owners trying to live out the American Dream. According to the Wall Street Journal, many smaller companies struggle to keep up with the new regulations and could lose revenue. The new data laws could make it more difficult for new competitors to start up, the New York Times reported. This could lead to rising prices, hurting the economy.

New privacy laws could also discontinue the sale of certain products or services. The New York Times reported that some companies changed or stopped selling certain products in European countries because of the changes in privacy laws. Some of these products collect too much data, and companies would rather discontinue selling them than take time to redesign them to fit the regulations. What products are they?

In spite of potential problems, certain states in the U.S. have already moved to adopt similar regulations. California moved to change its data regulations to reflect the new EU regulations by 2020, according to USA Today. These regulations, called the California Consumer Privacy Act attempt to prevent data breaches. The Forbes Technology Council predicts other states will follow suit and draft their own versions of
these laws.

While the idea of giving users control over their data is alluring, Americans should consider that changing data regulations may drastically impact the economy and give more power to larger companies. If the idea of implementing stricter data laws is to give power back to the people, stricter regulations may not be America’s best choice.