A LEGISLATIVE PUSH to curtail data collection could put Beacon Hill on a collision course with the world’s most powerful tech companies, but in the early days of debate, some of the loudest opposition has come from much closer to home. 

After Senate Democrats last week approved a wide-reaching bill that would allow consumers to opt out of targeted advertising and allow companies to collect only data necessary for the service or product requested, local retailers and smaller Massachusetts firms — and not just Meta, Google, and other power players — are putting pressure on the House to change course. 

The Senate’s approach, they argue, would put Bay State employers at a disadvantage compared to their peers in 18 other states. 

“This is way beyond just a Silicon Valley issue,” said Sam Larson, vice president of government affairs and legal counsel at the Associated Industries of Massachusetts. “It is certainly a Main Street concern.” 

A who’s who of influential local industry groups wrote to Senate Democrats last month to outline their issues with the legislation, which seeks to rein in what Senate President Karen Spilka called the “Wild West of data collection in Massachusetts.” 

The letter argued that the measure would “diverge from a mainly uniform approach that has been adopted by 18 states,” and therefore would make Massachusetts “an outlier in an increasingly competitive economic environment.” 

Leaders of the Massachusetts Business Roundtable, Greater Boston Chamber of Commerce, AIM, National Federation of Independent Businesses Massachusetts chapter, Retailers Association of Massachusetts, and New England Connectivity and Telecommunications Association signed the letter, according to a copy shared with CommonWealth Beacon. 

“Businesses have been clear to me that they are going to comply with whatever is thrown at them, but there’s a cost associated with having to create a [response to a] Massachusetts-specific statute,” said RAM vice president and general counsel Ryan Kearney. The legislation, which the Senate unanimously approved on September 25, would significantly alter the way companies interact with Bay Staters online. Consumers would gain new power to modify any data collected about them and to opt out of it being sold. Some information such as precise location, sexual orientation, or government-issued identifiers would be deemed “sensitive data” and protected even more strongly. 

Supporters say tighter restrictions are critical to maintain privacy and security, especially with internet-connected devices now in virtually every building, bag, and pocket. 

“I don’t think there’s any doubt in my mind that this [data] is being sold, and there are no rules limiting it now,” Senate Majority Leader Cynthia Creem said when she unveiled the measure. 

However, industry leaders contend that many local companies would be affected, not just large technology platforms. 

AIM recently commissioned a survey of 100 small businesses in Massachusetts and found a large majority rely on digital consumer data. Eighty-six percent of respondents said their marketing makes use of non-sensitive data — more general information about consumers than traits such as sexual identity or government-issued identifiers that senators want to regulate even more strictly — and 75 percent use anonymized customer location data to make decisions about where to advertise or where to open new locations. 

Nearly six in 10 of the companies that responded to the survey said their businesses would be negatively impacted if Massachusetts lawmakers restrict data collection, according to results obtained by CommonWealth Beacon.  

While the larger companies might be working behind the scenes, they are not staking out much of a position publicly. Meta, Google, and Apple did not respond to multiple requests for comment. 

The State Privacy and Security Coalition, which represents tech giants as well as companies in other industries such as CapitalOne, Nike, and General Motors, has been closely monitoring the bill, but so far has not issued any public statement on the Senate action. 

Larson said AIM does not oppose the idea of strengthening data privacy, but he criticized the Senate-approved bill as taking too different an approach from other states that have tackled the issue. 

Several opponents pointed to the approach to data minimization, or how the legislation would curtail the universe of information that can be gathered, as a particular pain point. 

Companies could only collect what the bill defines as “sensitive data” when doing so is “strictly necessary” to fulfilling the service or providing the product the customer requested. Other information not deemed sensitive could only be collected when “reasonably necessary” for the product or service. 

That bifurcation appears to create a stricter framework than in most other states, which typically require affirmative consent for collecting or processing sensitive data, according to business leaders and other insiders tracking the bill. 

The Senate proposal also limits collection of both categories of data to a specific product or service, while other states and the EU must inform a consumer of what they will gather and why. 

“The more unique, the more expensive compliance is,” Larson said. 

Other sections of the bill would allow adults to opt out of data sales related to targeted advertising and ban targeted advertising to minors altogether. 

Kearney suggested the practice is not as nefarious as some reform supporters might suggest.  

“Targeted advertising provides consumers an opportunity to learn about new product offerings that might be of interest to them based on their activity. That’s the equivalent, in our minds, to walking around a virtual mall. They get to go see different things,” he said. “On the internet, you don’t necessarily see those other options unless they’re provided to you.” 

So far, opponents have been successful at keeping one provision out of the mix: creating a private right of action, which would allow individual consumers to file lawsuits contending their information has been misused. 

None of the data-privacy laws passed by roughly 20 other states included a private right of action. 

It’s not clear whether or when House Democrats will roll out their own data-privacy measure, and until then, local groups will continue to make their case. 

“[We] support the idea of setting up a framework to regulate the use of consumer data,” Kearney said. “We just want to make sure it’s done in a fashion that does not impact our businesses or does not create on new costs or unnecessary costs when, again, there’s a proven model that’s been starting to emerge across the country.”