Businesses were ordered to close. Schools were shuttered. People were told to stay home. Many believed that in a week or two life for the most part would return to normal and that COVID would be a bad memory.
Now, four months later, California has not just halted reopening but is reversing course. As people and businesses strained under the stress of emotional and economic turmoil, the state – without missing a beat – began to pile on new regulations. Unfortunately, people and innovation will pay the price.
The California Consumer Privacy Act, a massive consumer privacy regulation, was forced through the state legislature in 2018. The law was so problematic and ill-written that an enforcement date had to be set two years in the future so that whole paragraphs of ambiguous language could be addressed. The mechanisms for expanded policing and enforcement on the internet had to be determined. Unaffordable compliance costs for every website that can be viewed in California had to be considered as well.
That cost of compliance is estimated by the California Department of Finance to be roughly $55 billion, which would almost devour the combined revenue of California based Levi’s, Qualcomm and Hewlett Packard Enterprises. The crushing cost also happens to be roughly the same total as the 2020 budget shortfall state lawmakers and California Governor Gavin Newsom were forced to deal with following the outbreak of the coronavirus. The state budget deficit exploded, in part, because of efforts to help companies survive during the current crisis. Now, the state is putting unnecessary compliance costs onto businesses entering one of the worst economic climates in modern history.
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