The nation’s harshest data privacy law collides with a political problem

New Jersey’s latest data privacy law — touted as a way to crack down on companies selling people’s sensitive information — is turning into a mess for the state’s entire electoral ecosystem.

Gov. Mikie Sherrill signed A-5328 into law 48 hours after it was introduced during the Legislature’s rush to pass the state budget. The new law creates the nation’s most expensive data broker registry, as well as introducing the broadest definition for who’s liable for penalties.

The language includes companies that share people’s information with data brokers, which the bill’s proponents said could include tech giants such as Meta and Google. Consultants, advertisers, Democrats and Republicans worry it also includes the political data brokers who sell insights to campaigns about hundreds of millions of potential voters and the issues they care about, which could pose a massive setback for tech-powered campaigns.

The law’s provisions create significant costs and risks for campaigns and companies to collect and share voter data, with annual registration fees ranging from $5,000 to $1.5 million, depending on how much data is acquired. States with similar registries such as Texas and California charge $300 and $6,000, respectively.

It also threatens a $50,000 penalty per record for anyone who violates the provisions by selling people’s sensitive data, which includes demographic information such as race, religious beliefs and location.

But the latest drama in New Jersey threatens to make the national case for exemptions in data protection legislation, even as state lawmakers, privacy advocates and state attorneys general argue to limit carveouts on who regulations apply to.

“Few campaigns, political parties, or civic organizations on either side of the aisle will be able to risk using voter data to communicate with New Jerseyans, which means less door knocking, less voter contact, and less accurate information reaching the people who need it before an election,” Mark Jablonowski, CEO of Democratic digital advertising firm DSPolitical, said.

The American Association of Political Consultants, a nonpartisan political consulting trade group, called for the law to be repealed, arguing it will limit national and state campaigns’ ability to reach voters in New Jersey.

Sherrill and the Democratic-led Legislature are both looking at revisiting the bill’s language following backlash against the law that’s only been on the books for less than a month. The Sherrill administration has said that enforcement guidance will be unveiled in the coming months.

A spokesperson for New Jersey Assembly Democrats told POLITICO that the bill was not intended to limit political speech or create barriers to run for office.

“We are aware that the Sherrill Administration is conducting a review of the law, we are conducting one as well,” spokesperson Rhonda Schaffler said in a statement. “If it becomes necessary to make clear that a law regulating data brokers does not limit the First Amendment or harm political communication, we will review and consider options together with the Senate and the Governor.”

The issue has turned into a political opportunity for state Republicans, who have criticized Democrats for rushing the law through. They have expressed concerns about the law banning the sale of location data, which campaigns use to target ads to voters in relevant districts.

“It really has created the situation where candidates and campaigns are nervous about proceeding and how does this affect them with no guidance and no carveout,” New Jersey GOP Chair Christine Hanlon told POLITICO. “It really is a problem that needs to be addressed.”

She added that litigation over the new law was “not out of the question.”

CORRECTION: An earlier version of this report misstated Mark Jablonowski’s job title.