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This article is Part 1 of 2 in a series exploring proposed federal privacy laws in the United States. Part 2 will discuss the constitutional challenges facing not only a proposed federal privacy law but those facing existing state privacy laws as well.
As predicted in our Privacy Law Forecast for 2019, legislators have raced to introduce national privacy regulation in both the House and Senate this year.
In contrast to the European Union’s GDPR, a hodgepodge of sectoral laws govern privacy in specific industries: medical, financial, educational, and marketing sectors, among others. States have enacted laws to protect their residents. And on top of that, Section 5 of the Federal Trade Commission Act (15 U.S.C. § 45) grants authority to the FTC to enforce against unfair and deceptive acts and practices.
This all results in a confusing and burdensome “patchwork” of national, state and sectoral rules. (For more in-depth discussion on the current U.S. privacy regulatory landscape, please see American Privacy Laws in a Global Context.)
Given this regulatory environment, legislators are keen to put forth a single federal privacy law to standardize this “patchwork” and forestall the passage of dozens more state privacy bills. Some have set a deadline, hoping to pass a federal privacy law before the CCPA comes into effect on January 1, 2020. Since the start of 2019, lawmakers have introduced about 230 bills that regulate privacy in some way in either the House or Senate.
The following is a sample of comprehensive bills from both sides of the aisle. Though these bills are unlikely to pass committee, they indicate what policies lawmakers are considering in the current negotiations:
|American Data Dissemination Act of 2019 (“ADD Act”)||January 16, 2019||Senator Marco Rubio (R-FL)||This bill would require the FTC to submit recommended privacy regulations on “covered providers” (defined as any person that provides services over the internet) to Congress. If Congress fails to enact a law based on the FTC’s recommendations, the FTC would promulgate a final rule incorporating its proposed regulations. Only the FTC has powers of enforcement. This bill further allows for the preemption of state law.|
|Social Media Privacy Protection and Consumer Rights Act of 2019||January 17, 2019||Senator Amy Klobuchar (D-MN)||This bill would require online platforms to inform the user of any data collection and use, offer the user a copy of their personal data, and allow the user to opt out of data tracking. The bill also requires breach notification within 72 hours of detection. Only the FTC and state attorneys general have the power to enforce violations.|
|Digital Accountability and Transparency to Advance Privacy Act (“DATA Privacy Act”)||February 27, 2019||Senator Catherine Cortez Masto (D-NV)||This bill would require companies to provide users with a fair processing notice and to allow users to access, port, or delete their own records. It would mandate users’ opt-in consent in situations involving sensitive data or data outside the parameters of the business-consumer relationship. Companies that collect data on more than 3,000 people a year and revenues greater than $25 million per year must appoint a Data Protection Officer (DPO). The FTC, state attorneys general, and any other officer authorized by the State to bring civil actions would have the power to enforce this law.|
|Own Your Own Data Act||March 14, 2019||Senator John Kennedy (R-LA)||This bill would require social media companies to have a “prominently and conspicuously displayed icon” that a user can click to easily access and port their information. It would characterize user account registration as a “licensing agreement” wherein the user would license the user’s data to the social media company.|
|Information Transparency & Personal Data Control Act||April 1, 2019||Representative Suzan DelBene (D-WA)||This bill would require any company to first procure users’ opt-in consent before processing sensitive data. Companies must also provide users with fair processing information. The bill requires companies to obtain third-party privacy audits and to submit the audits to the FTC biannually. Only the FTC would enforce this law. This bill further allows for the preemption of state law.|
|Balancing the Rights of Web Surfers Equally and Responsibly Act of 2019 (“BROWSER Act”)||April 10, 2019||Senator Marsha Blackburn (R-TN)||This bill would require providers of broadband internet access service and edge services to notify users of the providers’ privacy policies; obtain users opt-in consent in order to process sensitive information and opt-out consent for non-sensitive information; and prohibits providers from conditioning services on waivers of privacy rights. The bill further allows for the preemption of state law.|
|Privacy Bill of Rights||April 11, 2019||Senator Edward Markey (D-MA)||This bill would require companies provide users with fair processing information and the right to access, port, or delete their own records. Companies would be prohibited from offering “take-it-or-leave-it” arrangements or financial incentives in exchange for users’ personal information. Companies would also have to procure users’ opt-in consent before processing personal information. Under this bill, companies must designate an employee in charge of privacy/security compliance, no matter the size or annual revenue of the company. The FTC, state attorneys general, and individuals would be able to sue to enforce the law.|
|Do Not Track Act||May 21, 2019||Senator Josh Hawley (R-MO)||This bill would establish a national Do Not Track (DNT) system and require any website or application operator to search for a DNT signal upon connection. The bill would make it illegal to collect data from devices displaying a DNT signal. Only the FTC and state attorneys general have the power to enforce violations.|
As we can see, the fault lines are clear and not surprising. Democratic lawmakers generally favor a private right of action for consumers to sue a company that has mishandled consumer data. Republican lawmakers are generally against including such a provision. Republican lawmakers typically favor an express right of preemption, so that a laxer federal privacy law may preempt stringent state laws such as the CCPA. Democratic lawmakers are largely against the inclusion of such provisions, unless the bill provides consumer rights equivalent in scope and depth to the CCPA.
Regardless of whether or not a federal privacy law passes, businesses and the courts have their work cut out for them. Constitutional and interpretive challenges will plague the reach of any state or federal comprehensive privacy law, making it difficult to assess coverage for overlapping sector, state, and federal rules.
Consequently, as we will discuss further in our next article, legislators should consider these constitutional challenges head on prior to passing the “one” best bill to rule them all. Without clearly articulating the scope of any privacy law (e.g. does it extend across state borders and internationally), its preemption over or exclusions for other laws (e.g. GLBA, HIPAA, COPPA), and its relationship to third parties that only touch data incidentally – any comprehensive legislation will just add to the quagmire of current laws.