News Summary
A report by Capitol Matrix Consulting warns that California’s Assembly Bill 566 could lead to significant economic repercussions, including job losses and reduced ad revenue. The bill proposes a global opt-out for internet users, which might diminish the online experience and threaten small businesses. With projected losses of $3.6 billion in advertising and over 73,000 jobs at risk, opposing entities urge a focus on educating consumers instead. As the Senate considers the bill, its potential impact looms over California’s digital landscape.
California faces potential economic turmoil and disruption in its digital landscape due to Assembly Bill 566 (AB 566), according to a new report by Capitol Matrix Consulting. Commissioned by the California Chamber of Commerce, the report outlines alarming projections regarding job losses, revenue decreases, and adverse effects on consumer experience if the bill is enacted.
The report, titled “Economic and Fiscal Impacts of AB 566: Global Opt-Out for Internet Users,” warns that the bill could usher in unintended consequences detrimental to consumers, small businesses, and the broader state economy. AB 566 seeks to establish a “global opt-out preference setting” for California internet users, allowing them to exclude their personal data from being sold or shared online.
Should this bill pass, the anticipated opt-out rate could reach 25%, resulting in a staggering loss of approximately $3.6 billion in advertising spending within California. The fallout from these changes could lead to the elimination of over 73,000 jobs, a drop in labor income amounting to $6.4 billion, and substantial decreases in state and local tax revenues totaling $550 million and $270 million, respectively.
The report challenges the notion that a universal opt-out would still allow consumers the same level of access to ad-supported content. It predicts that widespread opting-out could lead to a diminished online experience for users, resulting in fewer ad-supported websites and less diverse content available. This scenario could create a fragmented internet landscape largely dominated by paywalls, which would significantly limit consumer access to free online services.
Research indicates that a substantial 71% of consumers prefer personalized online services, underscoring the critical role that targeted advertising plays in online interactions. Targeted advertising is especially vital for small and medium-sized businesses (SMBs), which rely on it to effectively reach specific audiences despite often having limited marketing budgets. Notably, the U.S. Census Bureau reports that 87% of California businesses qualify as SMBs, employing 47% of the state’s workforce, thereby highlighting the potential for widespread economic repercussions if these businesses experience downturns.
Particularly vulnerable industries include online publishing, news organizations, shopping centers, and nonprofits, which heavily depend on digital advertising for their economic viability. The negative impacts of AB 566 extend beyond immediate financial losses, as the bill poses the risk of job losses and consumer confusion while disrupting the overall internet ecosystem.
The California Chamber of Commerce and various business allies are firmly opposed to AB 566 due to its anticipated detrimental effects. They assert that the bill would not only threaten jobs and revenue but also complicate consumer choices regarding digital privacy and data management. Currently, California consumers already possess opt-out rights under the California Consumer Privacy Act (CCPA) and have access to tools that allow them to manage their data without the necessity for further legislated measures.
Given these findings, the report encourages the California Privacy Protection Agency to shift its focus toward educating consumers on their existing options rather than advancing AB 566. With the bill currently pending action by the Senate after the summer recess, the potential consequences of its passage bear a heavy weight on the future of California’s economy and digital landscape.
Deeper Dive: News & Info About This Topic
- California Chamber of Commerce: Report on AB 566
- Wikipedia: California Consumer Privacy Act
- California Chamber of Commerce: New Report on AB 566
- Google Search: California Assembly Bill 566
- California Chamber of Commerce: Critical Report on Privacy Agency
- Google Scholar: California Digital Privacy Legislation
- California Chamber of Commerce: Tech and Innovation Sector Report
- Encyclopedia Britannica: Privacy Law
- California Chamber of Commerce: Protecting Outdoor Workers
- Google News: California Employment Law
Author: STAFF HERE COSTA MESA WRITER
COSTA MESA STAFF WRITER The COSTA MESA STAFF WRITER represents the experienced team at HERECostaMesa.com, your go-to source for actionable local news and information in Costa Mesa, Orange County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the OC Fair, Concerts in the Park, and Fish Fry. Our coverage extends to key organizations like the Costa Mesa Chamber of Commerce and Boys & Girls Clubs of Central Orange Coast, plus leading businesses in retail, fashion, and technology that power the local economy such as Vans, Experian, and South Coast Plaza. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HEREMissionViejo.com, HERESanDiego.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
