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New study finds that Texas is more at risk for cyber privacy concerns than other states

According to a new study, there's still a lot the Lone Star State needs to do to protect its citzens online. Getty Images

If Texas' standards for online privacy were graded, the Lone Star State would earn an "F," a new study indicates.

An analysis of online privacy laws in the 50 states shows Texas adheres to only five (25 percent) of the 20 privacy standards examined by pro-consumer tech research website Comparetech. Just two states surpassed the 50 percent mark — California (75 percent) and Delaware (55 percent). At 5 percent, Wyoming was ranked the worst state for online privacy protection laws.

Texas did, however, have some redeeming qualities. The state has laws on the books regarding how companies dispose of consumers' data, how organizations protect data about students in kindergarten through 12th grade, how biometric data is protected, and how journalists are shielded from revealing their sources, according to Comparetech.

Ranking 23rd in the Comparetech study, Texas fell short in areas such as social media privacy, security of insurance data, third-party sharing of data, and disclosure of what types of data companies collect about consumers.

"Texas still has a long way to go in protecting its residents' privacy, particularly when it comes to how companies and government entities can collect, use, and share personal data," says Paul Bischoff, a privacy advocate with Comparetech.

During Texas' 2019 legislative session, one comprehensive measure aimed at tightening online privacy laws, the Texas Consumer Privacy Act, failed to reach the governor's desk.

However, lawmakers passed and Gov. Greg Abbott signed the Texas Privacy Protection Act. This law, far less sweeping than the Texas Consumer Privacy Act, revises notification requirements under the Texas Identity Theft Enforcement and Protection Act, according to the Data Privacy Monitor blog. It also establishes the 15-member Texas Privacy Protection Advisory Council, which will recommend future legislation tied to data privacy.

In Texas, Bischoff says, companies still "have few restrictions on how they are allowed to gather information from users, how long that data can be retained, and with whom it can be shared. Likewise, government entities like schools and law enforcement are not bound by laws that would prevent them from invading people's privacy."

He notes, however, that Texas is among only four states that protect biometric data such as fingerprints and facial-recognition scans.

Among all the states, California "sets a fairly high bar" for protection of online privacy, Bischoff says, but even it fails to meet all of the pro-privacy criteria set out in the Comparetech study.

Around the country, most people support beefing up state laws governing online privacy, he says, "but technology has outpaced legislation, so many states just need time to catch up."

Some Americans, though, doubt that any laws can safeguard their online privacy. In a 2019 survey commissioned by privacy-technology company FigLeaf Inc., 29 percent of U.S. adults said they thought it was impossible to safeguard their digital information.

"Without question, consumers are telling us that online privacy is important to them. However, far too many believe online privacy is difficult, if not impossible, to achieve," Slava Kolomeichuk, co-founder and CEO of Deerfield, Illinois-based FigLeaf, says in a news release. "This attitude is resulting in individuals who are choosing to restrict their own online activity, which limits their personal freedom. Unfortunately, current tools do not give consumers the assurance they need that it is possible to control one's own online privacy."

Control of online privacy is a serious concern for U.S. adults. In a 2019 survey by SurveyMonkey, 58 percent of adults viewed online privacy as a crisis. For Texans, this concern won't be addressed by state lawmakers until the Legislature reconvenes in 2021. Meanwhile, federal lawmakers aren't expected to take action this year on an online privacy bill.

U.S. Sen. Richard Wicker, a Mississippi Republican who chairs the Senate Commerce Committee, is one of the main sponsors of the federal privacy legislation. He says Americans deserve the same online protections regardless of where in the U.S. they live or travel.

"That means internet privacy regulations should not vary across state lines," Wicker says on his website. "Not only would 50 different privacy standards leave Americans uncertain about what is being done with their data, but a patchwork of state-level interventions could also lead to uncertainty for businesses, bad internet service, and slower economic growth."

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Building Houston

 
 

AvidXchange executives explain why a crisis like the pandemic can provide opportunities for growth or realignment. Photo via Getty Images

From esports to telemedicine, some technologies are having a major moment during the COVID-19 crisis. As many businesses are operating remotely with work-from-home policies in place indefinitely, payments automation is another technology that's seen an opportunity amid the pandemic.

AvidXchange, which has invoice and payment processes automation software for mid-market businesses, is one of the companies in this payment automation space that's seen growth in spite of the economic downturn caused by the virus. The Charlotte, North Carolina-based company was founded in 2000 and went on to acquire Houston-founded Strongroom Solutions Inc. in 2015.

Since the acquisition, AvidXchange has quadrupled its presence in Houston and does a good deal of business locally. Equipping companies with tools for remote work is crucial — now and especially in light of Houston's propensity for challenges. Tyler Gill, vice president of sales for AvidXchange based in the Houston office and former CEO of Strongroom, joined Houston Exponential on a virtual panel to discuss this topic.

"We've had a history of disasters in Houston. Any time we can help businesses move to a more cloud-based infrastructure is going to be better," Gill says on the livestream. "I think working from home is maybe the new normal for a lot of employees — so how do we enable this?"

Gill and his colleague, Chris Elmore, senior sales performance director at AvidXchange, joined Joey Sanchez of HX for the talk about the acquisition, the pandemic, and growth for the company. If you missed it or don't have time to stream the whole conversation, here are some impactful moments of the chat.

“Economic downturns have a tendency to put a very bright light on a feature set or a product or a service that’s underperforming."

— Elmore says on how the pandemic affects innovation and startups. "My hope is that entrepreneurs will see this as a real time to get focused on their business — what's working well and what's not working well — and my hope is that they'll say, 'I need to fix that,' not 'I wish this was better,'" he says.

“For a young entrepreneur looking to build a business, make sure you’re looking for the people who are germane to your business.”

— Gill says about starting his business in Houston. At first, he was trying to find investors in oil and gas, but he found more success working with companies with a background in finance technology. "Houston has a history and density in fintech — I just had to find it."

“The fact that Strongroom owned the automated payment process in HOA that made them so attractive to AvidXchange because we didn’t.”

— Elmore says on the 2015 acquisition. He explains that AvidXchange had set up a presence in multifamily and commercial real estate, while Strongroom had a hold on homeowner's association, or HOA, business. The two companies competed for a while, and if Strongroom hadn't had their HOA specialty that made the company ideal for acquisition, Elmore says the two companies would still be competing today.

“When Strongroom was added to AvidXchange, our culture improved. By the way, we went from 40 employees to 1,000 within 14 months, and Strongroom was right at the beginning of that.”

— Elmore says on growth following the acquisition. The company now has 1,500 employees across seven offices and just closed a $128 million round of fundraising in April.

“Customers don’t care how big you get or how much money you raise from investors. They care about if your service is still doing the things they need to operate their business.”

— Gill says, reminding entrepreneurs to always prioritize and be focused on the client experience — through mergers or acquisitions, fundraising rounds, growth, etc.

“When you replace human interaction with technology, what you have to do, is to now move that person on to something more impactful and more important for the business. I don’t like tech for tech’s sake.”

— Elmore says on the importance of automation. "When you automate something, the output of automation is time," he adds.

“Houston couldn’t be a better place to build a business — I found great investors and employees here. It’s a city that’s used to risk. But it’s got to be you, the entrepreneur, that’s got something festering — that’s how you know it’s a great idea.”

— Gill says on inspiring future innovators. "What kept me motivated was I wanted to win. I felt like we had a great product, and we had a big market to serve. … I wanted to build something lasting and build a great team."

“We continue to be a great Houston story — some of my angel investors in Houston are still benefiting."

— Gill says on AvidXchange's presence in Houston. He adds that he's proud of how his former Strongroom team members have risen through the ranks of the company following the acquisition and that he sees the company, which is still privately held, moving toward IPO.

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