As the movement towards state-level privacy laws continues to grow in the United States, Tennessee, and Montana are the latest states to pass comprehensive privacy legislation. These bills were approved by their state legislatures in April and are awaiting signatures from their respective governors to become law. The privacy law in Montana will go into effect on October 1, 2024, followed by Tennessee on July 1, 2025. Additionally, Montana has taken an extra step to address privacy concerns by proposing a ban on TikTok. Governor Greg Gianforte has also suggested expanding the bill to include all social media apps that share certain data with foreign adversaries, as reported by The Wall Street Journal.
However, the existing patchwork of state-level privacy laws already poses significant compliance challenges for the advertising industry. California’s privacy law, for instance, has been costly for companies to comply with, with some spending millions of dollars on compliance. Roy Wyman, an attorney at Bass, Berry & Sims, has written about the need for federal-level privacy legislation, noting that California tried to downplay the costs of compliance.
In addition, consumers are increasingly requesting companies to modify or delete their data, which limits marketers’ ability to scale customized ads. As more states pass comprehensive privacy laws, it could become even more challenging for the advertising industry to navigate the patchwork of regulations.
Montana’s privacy law takes privacy concerns a step further by proposing to ban TikTok. Governor Greg Gianforte has also requested to expand the bill to cover all social media apps that provide certain data to foreign adversaries, according to The Wall Street Journal. This move shows that some states are taking a proactive approach to protecting consumer data which could potentially lead to even more restrictions on data sharing in the future.
Marketing teams are facing significant compliance challenges due to the patchwork of state-level privacy laws in the US. Compliance with California’s privacy law alone can cost companies millions of dollars. As a result, marketing teams are increasingly collaborating with capable compliance groups and reviewing advertising technologies to mitigate risks.
Even marketing attribution, which seems simple, can create significant risks for brands handling personally identifiable information, according to Matt Voda, CEO of cross-channel measurement firm OptiMine. He stressed that companies must be aware of such risks and ensure that their marketing and advertising technologies do not create any problems in the future.
Meanwhile, businesses can take solace in the fact that Tennessee’s privacy law, similar to Virginia’s, is more business-friendly. The Tennessee Information Protection Act (TIPA) applies only to companies with an annual revenue cap of $25 million that process the personal information of 175,000 or more Tennessee residents or process the data of 25,000 residents and derive 50% of their gross revenue from the sale of that data. The law exempts non-profits, HIPAA-covered entities, and financial institutions.
While Montana and Tennessee have become the latest states to pass comprehensive privacy legislation, the trend of state-level privacy laws is gaining momentum in the US. Both bills have cleared their state legislatures and await their respective governors’ signatures. Montana’s privacy law is expected to become effective on October 1, 2024, while Tennessee’s law will become effective on July 1, 2025. Montana’s privacy law goes a step further by proposing to ban TikTok, and Governor Greg Gianforte has requested broadening the bill to apply to all social media apps that provide certain data to foreign adversaries.
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