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Confusing Legal Landscape Detrimental to Small Businesses; Liability Increases with Rise in E-Commerce.

PORTLAND, Ore. -- As small business owners work to stay afloat in a changing economy, confusing legislation can often be a pitfall.

Experts at the nonprofit Information Technology Solution Providers Alliance (ITSPA) see the muddled environment of business law as a major hurdle for small companies. Laws such SB 1386 in California can easily affect unsuspecting small businesses that aren't well informed about the confusing legal landscape.

According to, the law requires anyone conducting business in California to "disclose any breach of security to any California resident whose unencrypted data is believed to have been disclosed." This means all businesses must report to law enforcement any loss or unauthorized disclosure of private information such as any combination of first initial and last name plus a specific account number, Social Security number or other personally identifiable information.

"On the surface, this law may appear to affect only California businesses, but with today's reliance on e-commerce and the Internet, a small business based in Boston that sells a product to a California resident has to know about this law," said Kevin McDonald, vice president of Alvaka Networks and ITSPA advisory board member. "In fact, there are so many new security and privacy laws affecting small businesses, it's hard for most managers to keep up with what applies to them."

McDonald summarizes the legal landscape for small businesses in two words: confusing and changing. One major problem that businesses face is deciding what laws really apply. Managers are seeing a multitude of laws that relate to business technology, and it's difficult to filter out what is applicable to their own businesses.

ITSPA recommends small businesses familiarize themselves with pertinent computer laws and regulations by following a few simple steps to start the education process.

--1) Research your state's Web site to find laws that apply to your business.

--2) Consult a lawyer. No matter how small, your business is regulated by state and federal laws. By being proactive and learning about the legal landscape, you can avoid liability and risk.

--3) Join a local business association or ask your chamber of commerce to help keep you abreast of the newest local laws.

--4) Consider a membership in a national organization of similar type businesses. They usually have someone dedicated to keeping abreast of key issues across the country.

--5) Contact your local technology solution provider to perform an audit on your security system to see if you're meeting the legal requirements of privacy laws like California SB 1386.

For more information, check out these legal and informational resources:

--California SB 1386:

--National Conference of State Legislators:

--American Electronics Association:

--Find a lawyer or legal advice:

About ITSPA (

Headquartered in Portland, Ore., the Information Technology Solution Providers Alliance (ITSPA) is a national, nonprofit organization serving as an objective resource for businesses hoping to take advantage of the benefits of new technology. ITSPA is dedicated to helping small and medium-size businesses adopt technology and grow by using local solution providers to solve business challenges.
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Publication:Business Wire
Date:Jul 25, 2006
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