The Hidden Costs of Florida’s Senate Bill 262 on Consumers and Small Businesses
Touted as a “Digital Bill of Rights,” Florida Senate Bill 262 has the potential to negatively impact both consumers and businesses online by significantly increasing the costs associated with targeted advertising.
For internet users, the bill could lead to a decline in freely accessible online content as publishers shift from advertising-based to subscription-based models. For businesses, this legislation may result in reduced targeting capabilities for advertisements, ultimately lowering revenues.
While Big Tech might consider this a mere inconvenience, the bill’s ramifications could be disastrous for Florida’s small-business community. Florida can, and should, seek better solutions.
Technically, SB262 aims to enhance transparency by requiring services that gather users’ personal information to reveal their intentions for the collected data. However, the bill’s broad definition of personal information encompasses even non-personally identifiable aggregated data, if it is intended for targeted advertising purposes. In practice, this means that collecting a device’s browsing or search history to provide more relevant ads would be subject to heightened transparency requirements.
These regulations are designed to encourage consumers to opt out of the online advertising ecosystem. Although Big Tech companies like Facebook and Google will undoubtedly feel the impact, users of smaller online publishers and businesses that depend on these advertising networks for reaching potential customers will bear the brunt of the consequences.
Targeted advertising revenue often enables online platforms to offer free access to users. As the value of such advertising decreases, platforms may be forced to raise revenue through user subscriptions, negatively affecting a majority of users who prefer free access over less targeted advertising. Furthermore, the ads users continue to receive will likely be less relevant.
While Google and Facebook can absorb compliance costs and marginal losses in advertising revenue, smaller platforms may struggle to achieve the necessary scale to comply with laws like SB262.
Similarly, smaller publishers who rely on revenue from targeted ads will face significant challenges. For instance, blogs that run ads from the Google ad network will lose more revenue as consumers opt out. Content creators may be forced to adopt subscription models or explore alternative income sources, negatively impacting their audiences.
Small businesses that use targeted advertising to reach potential customers will also be affected. They may have to resort to display ads and other less effective methods, reducing the likelihood of successful transactions. This could be particularly detrimental for Florida’s small businesses seeking local consumers.
While taking on Big Tech is currently popular among Florida politicians, the consequences of bills like SB262 will be primarily felt by the state’s internet users and small businesses aiming to sell to them. Floridians will eventually grow weary of political theatrics. Rather than breaking the internet for short-term political gains, legislators should focus on finding effective solutions that protect consumers and support small businesses.