State’s Newest Agency Overreaching and Threatening the Macroeconomy

"As Californians, we pride ourselves in being leaders in technology and innovation. Many of our member companies have been pioneers in the industry and continue to create jobs, opportunities and harness entrepreneurism. In 2023, Gov. Gavin Newsom signed an executive order to prepare California for the progress of artificial intelligence, and just last month he announced new initiatives to advance safe and responsible AI.

Gov. Newsom has carefully balanced California’s approach to AI regulation with a thoughtful combination of programs to support innovation and regulations to ensure consumer protection, which includes recently vetoing several bills that would have allowed the state’s California Privacy Protection Agency to create overreaching new regulations detrimental to small and medium sized businesses.

Yet, the CPPA continues to work on their new regulations that would give them oversight on AI and other automated decision-making tools. They are doing this work despite the governor’s opposition, and members of their own board expressing these proposed regulations go beyond their scope and mission of protecting consumer data.

We collectively have a couple of major concerns about the CPPA’s Economic Impact Assessment they issued earlier this year; specifically the impact on 66% of the 66,000 businesses they identified as being impacted. Those being the small businesses that are the 'backbone of our economy.'