What You Need To Do To Prepare for Eight New State Privacy Laws in 2025: Avoid These Business Risks

The privacy landscape in the United States is undergoing a seismic shift. With eight new state privacy laws set to take effect in 2025, businesses must prepare for an increasingly complex web of compliance requirements as if it’s not already complicated enough. By the end of the year, nearly 43% of Americans (approximately 150 million people) will be covered under comprehensive state-level privacy regulations.

For companies operating across state lines, the stakes are high. Non-compliance could result in penalties, lawsuits, and significant reputational damage. Every week new lawsuits and claims are being filed and hundreds of millions of dollars are being paid out and the problem is only going to get worse. Fortunately, aligning with these new laws is often less daunting than it appears, especially for businesses already compliant with existing privacy regulations.

Here’s a breakdown of the new laws, what they mean for businesses, and practical steps to prepare.

Key Dates and New Privacy Laws in 2025

The rollout begins in January 2025, when five states will enforce their privacy laws:

• Iowa – Data Privacy Law (Effective January 1, 2025)
• Delaware – Personal Data Privacy Act (Effective January 1, 2025)
• Nebraska – Data Privacy Act (Effective January 1, 2025)
• New Hampshire – Privacy Act (Effective January 1, 2025)
• New Jersey – Data Privacy Law (Effective January 15, 2025)

Later in the year, three more states will join the movement:

• Tennessee – Information Protection Act (Effective July 1, 2025)
• Minnesota – Consumer Data Privacy Act (Effective July 15, 2025)
• Maryland – Online Data Privacy Act (Effective October 1, 2025)

Why These Laws Matter

For companies operating in the U.S., navigating state privacy laws is no longer optional and it doesn’t matter where your business is located but rather where the data subject is from. If a California, Tennessee, or New Jersey resident visits your website and you have tracking technology setup even without your knowledge you are still liable no matter where your business is based. As more states introduce regulations, businesses must ensure they are ready to meet a variety of requirements—or risk significant consequences.

The Risks of Non-Compliance

• Fines and Penalties: States impose steep fines for violations, including those for improper data handling or failing to meet consumer requests. Its not just the privacy protection authorities and FTC but also plaintiffs firms that can come after you now. 
• Reputational Harm: A breach of consumer trust can lead to long-term damage, driving customers to competitors with stronger privacy practices.
• Legal Action: Non-compliance could result in lawsuits, including class-action cases under specific state laws and creative arbitration claims that are costing businesses $30,000 per claim. 

Determining Applicability

Each state’s privacy law has different criteria for applicability. Most laws target businesses operating in the state and processing or selling personal data. Here are key factors to evaluate:

Revenue Thresholds

• Some states allow a private right of action from individuals and other states, such as Tennessee, apply their laws to companies with $25 million or more in annual revenue.

Data Volume

• Most states, excluding Nebraska, determine applicability based on the number of residents whose personal data is processed. For example, Delaware’s law focuses on companies handling data for a significant number of its residents.

Nebraska’s Model

• Nebraska’s privacy law applies to any business processing or selling personal data, following Texas’ model, but exempts small businesses as defined by the federal Small Business Act.

Core Privacy Obligations Across States

Despite their differences, the new state laws share several fundamental obligations:

1. Consumer Rights:
   • All states grant consumers the right to access, delete, and obtain a copy of their data.
   • Most states also allow consumers to opt out of targeted advertising, data sales, and profiling.
2. Privacy Notices:
   • Businesses must disclose the types of data collected, its purpose, and how it is shared with third parties.
3. Data Protection Assessments:
   • Required for activities like targeted advertising, sensitive data processing, and profiling.
4. Third-Party Contracts:
   • Contracts must ensure data processors comply with privacy standards.
5. Technical Safeguards:
   • Companies must implement security measures to protect personal data.

Unique State Requirements

Some states introduce distinct rules that go beyond the shared obligations:

• New Jersey and Maryland: Require businesses to cease data processing within 15 to 30 days after a consumer revokes consent.
• Delaware, Minnesota, and Maryland: Allow consumers to request a list of third parties to whom their data has been disclosed.
• Minnesota: Mandates hyperlinks like “Your Privacy Rights” for opt-out requests.
• Universal Opt-Out Mechanisms: States like Nebraska, Delaware (starting 2026), and Maryland require businesses to honor global privacy signals, such as the Global Privacy Control (GPC).

Maryland’s Privacy Law: A Notable Challenge

Of all the laws taking effect in 2025, Maryland’s Online Data Privacy Act stands out as the most restrictive. Businesses will need to:

• Limit data collection to what is reasonably necessary to provide a product or service.
• Prohibit targeted advertising for individuals under 18.
• Restrict the sale of sensitive data unless required to fulfill a consumer’s request.

These provisions could disrupt existing business models, particularly those relying on behavioral advertising or data brokering. Companies should review use cases carefully to determine if exceptions apply.

How to Prepare for 2025

With the clock ticking, businesses should act now to ensure they are ready for the new privacy laws. Here’s a step-by-step approach:

1. Assess Current Compliance

• Review your existing privacy practices. If your business complies with laws like the California Consumer Privacy Act (CCPA), you may only need minor updates to meet the new requirements.

2. Update Your Privacy Policy

• Ensure your privacy policy aligns with the obligations of all applicable state laws, including:
  • Categories of data collected.
  • Purposes for data processing.
  • Consumer rights and how to exercise them.
  • Opt-out mechanisms for data sales or targeted advertising.

3. Train Your Team

• Educate employees on handling consumer requests and recognizing compliance obligations.

4. Enhance Data Security

• Implement technical safeguards to prevent data breaches, as all states mandate reasonable measures to protect personal information.

5. Simplify with a National Approach

• Many businesses opt for a unified national privacy standard rather than adapting to individual state thresholds. This approach minimizes administrative burden and ensures consistent customer service but there’s also software that can automate the compliance requirements for a nominal fee.

The growing patchwork of state privacy laws presents both challenges and opportunities. While compliance may seem complex, proactive preparation can protect your business from penalties and strengthen consumer trust.

Start now by reviewing your privacy policies, updating procedures, and ensuring your data practices align with the requirements set to take effect in 2025. By prioritizing privacy, you not only safeguard your operations but also position your business as a trusted brand in a data-conscious world.

Privacy Policy Checklist
To help you get started, here’s a quick checklist of essential elements to include in your privacy policy:

1. Categories of personal data processed.
2. Purpose of processing.
3. Methods for consumers to exercise their rights.
4. Categories of personal data shared with third parties.
5. List of third-party recipients.
6. Opt-out mechanisms for data sales, targeted advertising, and profiling.
7. Contact information for the data controller.
8. Compliance with state-specific requirements (e.g., “Your Opt-out Rights” hyperlinks or responding to universal opt-out mechanisms).

By taking these steps, you’ll be ready to navigate the new era of state privacy laws and set your business apart as a leader in consumer data protection.