Delaware Law To Hamstring Maryland Border Businesses

The border towns between the states of Maryland and Delaware are tremendously inter-twined.  The north-south portion of the Maryland and Delaware border forms the Mason-Dixon Line and the east-west Transpeninsular Line cuts across the Delmarva Peninsula where so many residents of Maryland, Virginia, Delaware and Pennsylvania enjoy some of the East Coast’s best beaches.

The Maryland-Delaware border has been a venue for historic disputes.  But in modern times, the border towns of the two states share commerce and customers from Newark, Del to Elkton, Md. and Ocean City, Md. to Fenwick Island, Del.

However, that could soon end as a new Delaware law will place burdensome regulations on Mom-and-Pop businesses, forcing those on the Maryland side to turn away Delaware consumers that use online technologies to place orders and make payments.

Recently signed into law, Delaware’s Senate Bill 68 requires every Delaware business with a website to post a privacy policy if that website collects certain information (like a customer’s email address or phone number). This is no trivial task.  Privacy policies are expensive to create and maintain – costing around $5,000 for a lawyer to review an off-the-shelf policy.  

Under SB 68, if a store were to collect pizza order information though its website, it must first hire an attorney to write and publish an exhaustive set of complicated disclosures.

Moreover, privacy policies become affirmative statement that can be used against small businesses.  Meaning if a business’ privacy policy has one mistake, or forgets to adjust for the collection of data from web ads or plug-ins, the business has just broken state and federal law and can be sued.  This bill is so expansive that the day it goes into effect, Delaware websites must disallow customers from subscribing to newsletters or join rewards clubs.

What does this mean when Delaware residents and visitors place takeout orders online with a restaurant based in Ocean City or Elkton?  We’re not sure of the answer.  And the legal risk that the law could place on Maryland businesses may make it more prudent for them to turn away customers than face potential fines or lawsuits.

Of course the large websites already post privacy policies, so the law will not affect them. So SB 68’s new requirements really only applies to the small ones. The choice this could present to Maryland border businesses is clear: pay up and accept the litigation risk, or lose a substantial part of your revenue.

We understand and support the idea behind this bill, increasing transparency about online data practices.  But this bill fails to achieve its goals.

And from what exactly are consumers being protected?  Today, I can call a Delaware business and place an order for delivery – providing my name, phone number and address.  Of course, this transaction doesn’t require any special disclosure under Delaware law.  But under this new law, if that same store were to collect that exact same information though its website, it must first hire an attorney to write and publish an exhaustive set of complicated disclosures.  This simply makes no sense.

I have some outstanding neighbors.  We enjoy each other’s company and have much in common that leads to life-long friendships.  Maryland and Delaware have enjoyed many of the same neighborly benefits.  But, ill-conceived, burdensome legislation that does not provide additional consumer protections is not something Maryland should have to share with its Delaware friends.

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