According to CalMatters Housing, a new state bill passed by the California Legislature and headed to the governor's desk promises to protect small businesses from what many see as abusive lawsuits, but privacy advocates worry it quietly shields major tech companies from significant legal exposure. The legislation, Senate Bill 690, emerged from a real problem facing local business owners like Gytahnna Loffgren, whose family solar panel company was hit with a lawsuit alleging over $35,000 in damages based on website privacy violations, something she never expected to happen.
The root of these lawsuits traces back to a 1967 wiretapping law that was amended in 2015 to cover digital tracking. According to the reporting, lawyers began arguing that common website tools like cookies and analytics trackers operate as modern "pen registers" that illegally record user information without consent. This opened the floodgates to thousands of claims against small businesses, with attorneys filing more than 4,000 suits in recent years, all potentially triggering $5,000 penalties per violation whether or not anyone was actually harmed.
CalMatters Housing reports that while the bill's surface appeal is rescuing small business owners from what some call opportunistic litigation, privacy advocates view it as a sophisticated political move shaped by Big Tech lobbyists. The legislation is backed by Meta, Amazon, Google, and X, among other major tech companies, and opposed by groups like the ACLU and the National Consumer Law Center. In its final form, the bill removes individual consumers' right to sue companies for tracking violations and gives exclusive enforcement authority to an under-resourced state attorney general, leaving privacy protection potentially hollow.
The same law that has hammered small businesses has also created massive liability for tech giants themselves. According to CalMatters Housing, companies like Amazon and Meta face hundreds of millions of dollars in potential exposure from similar tracking claims, and the Los Angeles Times recently settled a class-action case for nearly $4 million over website tracking practices. Even a federal judge overseeing Bay Area cases called the 1967 law a "total mess" that has become unworkable in the internet era.
CalMatters Housing explains that while SB 690's supporters claim existing privacy laws like the California Consumer Privacy Act provide adequate consumer protection, legislative analysts disagree. The existing law doesn't allow individuals to sue over routine tracking practices, leaving enforcement entirely to an attorney general's office that lacks sufficient staff to monitor websites across the state. The bill's backers acknowledge there is more work ahead and suggest the Legislature may need to revisit the issue in future sessions.
What I am seeing locally with my clients is genuine confusion about what these laws mean for their businesses and their rights as consumers. The Bay Area and Fremont have more than their share of small business owners who are caught in this legal crossfire, and I worry that while we may solve the problem of frivolous lawsuits against mom-and-pop operations, we could be trading one unfair outcome for another by weakening regular people's ability to hold powerful tech companies accountable for how they track and use our data.
