Data Privacy: Movement, But Major Decisions Ahead
Data privacy negotiations are entering a more active and consequential phase in both chambers, with signs of alignment emerging alongside continued areas of concern.
In House Commerce, there is a clear shift underway to move away from draft 2.3 and back toward a framework closer to S.71 as passed by the Senate, incorporating updates adopted in Connecticut since the bill has remained in committee for more than a year. This recalibration reflects meaningful progress toward a more regionally aligned baseline.
At the same time, early committee conversations underscore that several key policy decisions remain unresolved. Even within this broader shift toward alignment, significant areas of uncertainty will shape the bill’s overall impact. It remains unclear what data minimization standards will be included in a new draft. There is also ongoing uncertainty around the scope of sensitive data, particularly where Vermont may seek to expand beyond regional norms. The potential reintroduction of a private right of action adds further complexity, as does the evolving approach to exemptions, including the treatment of health data and HIPAA-related entities. Additional questions remain regarding processor obligations, contractual requirements, and how emerging provisions related to artificial intelligence and automated decision-making may ultimately be incorporated.
In parallel, the Senate is considering advancing a separate path with a data privacy amendment to proposed data broker legislation. That effort is occurring alongside broader discussions about integrating elements of S.71, with some senators emphasizing the importance of passing a regionally consistent bill this year rather than risking another session without action.
Outside of the committee process, the broader campaign around this legislation has shifted from substantive policymaking to political theater. A group calling itself “The People vs. Big Tech” has pushed inflammatory attacks against Vermont businesses, business advocacy groups, and others that have engaged on this issue in good faith for years. Led by a sitting legislator and amplified through coordinated advocacy networks, the campaign has relied more on public attacks and performative rhetoric than serious policy engagement.
At the center of the campaign are out-of-state attorneys, consultants, and advocacy interests that stand to benefit financially and politically from a first-in-the-nation framework, regardless of the consequences for Vermont businesses. Rather than advancing informed debate, the campaign has attempted to reduce a complex policy issue into simplistic messaging designed to generate outrage, not solutions.
Despite this dynamic, committee members in the house and the senate have remained focused on the actual policy questions and the practical implications for Vermont consumers and businesses, which will be critical to reaching a balanced and workable outcome.
Across both chambers, a consistent theme emerges. There is growing recognition that regional compatibility matters, particularly for businesses operating across state lines. Vermont employers have reinforced this point directly, with more than 100 businesses signing onto a letter urging policymakers to align with neighboring states and avoid creating an outlier regulatory framework.
The trajectory is moving in a more constructive direction, but the outcome will hinge on the details. Whether the final bill reflects a balanced, regionally consistent approach or introduces new and untested provisions will determine both its viability this session and its real-world impact on Vermont’s business climate.
CONNECT WITH OUR DATA PRIVACY EXPERT
Megan Sullivan
Vice President of Government Affairs
Economic Development, Fiscal Policy, Healthcare, Housing, Land Use/Permitting, Technology
