Sacramento, CA — TechNet Executive Director for California Courtney Jensen today commented on “Standardized Regulatory Impact Assessment: California Consumer Privacy Act of 2018 Regulations,” a study prepared for the California attorney general’s office that examines compliance costs and impacts of the new privacy law.

“This study includes troubling points for businesses that must comply with the California Consumer Privacy Act and shows the potential for a significant negative impact on the California economy,” said TechNet Executive Director for California Courtney Jensen. “According to the study, it is clear this new law will not only cost billions for businesses to comply with, but small businesses and start-ups are likely to face higher compliance costs than other firms, and California businesses will be at a disadvantage to those that do not operate in the state.”

Key excerpts from the study are below:

  • “The total cost of initial compliance with the CCPA, which constitutes the vast majority of compliance efforts, is approximately $55 billion. This is equivalent to approximately 1.8% of California Gross State Product in 2018.”
  • “Our preliminary estimate of direct compliance costs is estimated to be $467-$16,454 million over the next decade (2020-30), depending on the number of California businesses coming into compliance.
  • “Small firms are likely to face a disproportionately higher share of compliance costs relative to larger enterprises. Conventional wisdom may suggest that stronger privacy regulations will adversely impact large technology firms that derive the majority of their revenue from personal data, however evidence from the EU suggests the opposite may be true. Over a year after the introduction of the GDPR, concerns regarding its impact on larger firms appear to have been overstated, while many smaller firms have struggled to meet compliance costs.”
  • “For firms that operate within the state of California, the regulation will provide a competitive disadvantage relative to firms that operate only outside of the state. This is purely a reflection of compliance costs as firms that are subject to the regulation will face higher costs than those that are not. The most affected firms are those that have over $25 million in revenue that have competitors of a similar size operating only outside of California.”