Data Privacy 2025: Key U.S. Laws & AI Rules for Ecommerce
As we move forward with 2025, it has become imperative for ecommerce businesses to equip themselves with the latest updates about data privacy. The intertwining of new U.S. state privacy laws and emerging artificial intelligence (AI) regulations presents both challenges and opportunities.
As an ecommerce store owner, understanding these developments is crucial to ensure compliance, build customer trust, and maintain a competitive edge.
The Expanding Patchwork of U.S. State Privacy Laws
The absence of a comprehensive federal data privacy law in the United States has led to a mosaic of state-specific regulations. In 2025 alone, eight new state privacy laws have come into effect, each with its unique requirements:
Iowa Consumer Data Protection Act (ICDPA)
Effective January 1, 2025, this law applies to businesses processing data of over 100,000 Iowa residents or those earning more than 50% of their revenue from selling personal data of at least 25,000 residents.
It grants consumers rights to access, delete, and obtain copies of their personal data, and to opt out of data sales and targeted advertising. Non-compliance can result in fines up to $7,500 per violation, enforced by the Iowa Attorney General.
Delaware Personal Data Privacy Act (DPDPA)
Also effective January 1, 2025, this act covers entities processing data of at least 35,000 Delaware residents or 10,000 residents if over 20% of revenue comes from data sales.
Consumers can access, correct, delete, and transfer their data, and opt out of data sales and targeted ads. Violations may lead to fines up to $10,000 per incident, overseen by the Delaware Department of Justice.
Nebraska Data Privacy Act (NDPA)
Starting January 1, 2025, this law applies to businesses handling data of at least 100,000 Nebraska residents or 25,000 residents if over 50% of revenue is from data sales.
It provides rights to access, correct, delete, and transfer personal data, and to opt out of data sales and targeted advertising. Fines for non-compliance can reach $7,500 per violation, enforced by the Nebraska Attorney General.
New Hampshire Privacy Act (NHPA)
Effective January 1, 2025, this act targets businesses processing data of at least 100,000 New Hampshire residents or 25,000 residents if over 25% of revenue comes from data sales.
Consumers have rights to access, correct, delete, and transfer their data, and to opt out of data sales and targeted ads. Non-compliance can result in fines up to $10,000 per violation, managed by the New Hampshire Attorney General.
New Jersey Data Privacy Law (NJDPL)
Commencing January 15, 2025, this law applies to businesses processing data of at least 100,000 New Jersey residents or 25,000 residents if 50% or more of revenue comes from data sales.
It grants rights to access, correct, delete, and transfer personal data, and to opt out of data sales and targeted advertising. Violations may incur fines up to $10,000 per incident, enforced by the New Jersey Attorney General.
Tennessee Information Protection Act (TIPA)
Effective July 1, 2025, TIPA covers businesses processing data of 100,000 or more Tennessee residents, or 25,000 residents if at least 50% of revenue comes from data sales.
Consumers can access, correct, delete, and transfer their data, and opt out of data sales and targeted ads. Non-compliance can lead to fines up to $7,500 per violation, overseen by the Tennessee Attorney General.
Also read: The impact of Trump’s economic plans on Ecommerce
Minnesota Consumer Data Privacy Act (MCDPA)
Starting July 31, 2025, this act applies to businesses processing data of 100,000 Minnesota residents or 25,000 residents if 25% or more of revenue is from data sales.
It provides rights to access, correct, delete, and transfer personal data, and to opt out of data sales and targeted advertising. Fines for non-compliance can reach $7,500 per violation, enforced by the Minnesota Attorney General.
Maryland Online Data Privacy Act (MODPA)
Effective October 1, 2025, MODPA targets businesses processing data of at least 100,000 Maryland residents or 25,000 residents if 50% of revenue comes from data sales. Consumers have rights to access, correct, delete, and transfer their data, and to opt out of data sales and targeted ads.
Non-compliance can result in fines up to $10,000 per violation, managed by the Maryland Attorney General.
For ecommerce store owners, this proliferation of state-specific laws means adopting a proactive approach to data privacy. It's essential to:
- Conduct Data Audits: Regularly assess the types of data collected, storage methods, and sharing practices to ensure compliance with varying state laws.
- Update Privacy Policies: Clearly articulate data collection practices, usage, and sharing policies. Ensure these policies are easily accessible and understandable to consumers.
- Implement Robust Security Measures: Protect consumer data from breaches through encryption, regular security assessments, and employee training.
- Establish Consumer Rights Protocols: Develop easy processes for consumers to exercise their rights, such as data access, correction, deletion, and opting out of data sales or targeted advertising.
Navigating AI Regulations in Ecommerce
The integration of AI into ecommerce operations—be it for personalized recommendations, chatbots, or inventory management—has revolutionized the industry.
However, with AI's rise, regulatory bodies are keen to ensure its ethical and transparent use.
In February 2025, the European Union (EU) introduced guidelines under the Artificial Intelligence Act, prohibiting practices such as:
- Emotion Tracking by Employers: Employers are banned from using AI to monitor employees' emotions.
- Manipulative Website Practices: Websites cannot use AI to manipulate users into making purchases they wouldn't otherwise consider.
- Predictive Policing: Law enforcement is restricted from using AI solely to predict criminal behavior without verification.
While these regulations are EU-specific, they signal a global shift towards stricter AI governance. Ecommerce businesses using AI should:
- Ensure Transparency: Clearly inform customers when AI is used in interactions, such as chatbots or personalized recommendations.
- Avoid Manipulative Tactics: Refrain from using AI to exploit consumer vulnerabilities or nudge them into unwanted purchases.
- Regularly Review AI Systems: Assess AI tools for biases and ensure they comply with ethical standards and emerging regulations.
The Push for Federal Privacy Legislation
The patchwork of state laws has reignited discussions around a comprehensive federal data privacy law. Although efforts have stalled in Congress, the momentum at the state level underscores the urgency for uniform regulations.
A federal law could provide:
- Consistency: A unified framework would simplify compliance for businesses operating across multiple states.
- Enhanced Consumer Trust: Nationwide standards could bolster consumer confidence in how their data is handled.
- Streamlined Enforcement: Federal oversight could lead to more efficient enforcement and clearer guidelines.
Practical Steps for Ecommerce Store Owners
To navigate this complex regulatory environment, consider the following steps:
Stay Informed
Regularly monitor legislative developments at both state and federal levels. Subscribing to industry newsletters, attending ecommerce legal webinars, or consulting with legal experts can help you stay ahead of compliance changes.
Invest in Privacy-First Technologies
Implement tools that support compliance, such as automated data deletion requests, consent management platforms, and AI-powered compliance monitoring.
Enhance Consumer Consent Mechanisms
Update your website’s consent banners and preference centers to align with opt-in and opt-out requirements for data collection and targeted advertising.
Prioritize Data Minimization
Only collect and retain the personal data necessary for operations. Reducing the amount of stored data lowers risks in case of breaches and simplifies compliance efforts.
Strengthen Customer Communication
Clearly explain how you handle customer data, why it's collected, and how they can control its use. Transparency fosters trust and can lead to stronger customer relationships.
Train Employees on Privacy Practices
Your team should be well-versed in handling customer data responsibly. Regular training on data privacy laws and security best practices can prevent compliance missteps.
The Future of Data Privacy & AI in Ecommerce
As 2025 progresses, the data privacy landscape will continue evolving. The increasing adoption of AI in ecommerce will likely invite further scrutiny, leading to additional regulations that may impose stricter requirements on how AI interacts with consumers.
Meanwhile, pressure will mount on Congress to pass a nationwide privacy law to unify compliance standards for businesses operating across multiple states.
For ecommerce store owners, these developments reinforce the importance of taking a proactive stance. Rather than waiting for regulations to dictate changes, businesses that adopt a strong privacy-first approach now will be better positioned to adapt to future shifts.
In the end, safeguarding customer data isn’t just about compliance—it’s about fostering long-term trust. The brands that prioritize transparency, ethical AI use, and strong security measures will not only meet legal requirements but also earn customer loyalty in an increasingly privacy-conscious world.
Final Thoughts
Data privacy in 2025 is no longer just a legal obligation; it's a business imperative. Whether you're running a small Shopify store or a large ecommerce platform, understanding and implementing these privacy regulations will be crucial for maintaining a thriving online business.
So, take action today—review your data policies, refine your AI usage, and invest in privacy-first strategies. The future of ecommerce belongs to businesses that respect and protect their customers' data.
Author
The Role of Headless Commerce in Shopify Development
Written by: CrawlApps Technologies
March 04, 2025
