Industry Asks Congress For Federal Data Privacy Law to Replace State “Patchwork”

A letter signed by dozens of industry trade groups asks key Congressional leaders to develop a federal data privacy law that would override existing state laws. In her article in The Record, Suzanne Smalley looks at what’s proposed and what might be controversial.

This isn’t the first time a comprehensive federal data privacy law in this area has been sought. Disagreements over key issues, including the preemption of state laws, have always prevented passage.

The proposal does not address a key group in the data trafficking business: data brokers. If enacted, it would replace some famously strict laws, notably those in California and Illinois. Some privacy experts say the proposed structures are similar to those in some weaker state privacy laws. 

The letter suggests the following provisions: Companies should be required to be transparent about their data practices and minimize the amount of data they collect. Consumers should have the right to know whether their data is being processed, to erase or correct it, and to opt out of advertising based on their browsing habits.

The letter also proposes that smaller companies be exempt from regulation and includes a general exhortation for “Reasonable Enforcement and Collaborative Compliance.”

“Federal privacy legislation should encourage cooperation between the business community and government, not promote adversarial action that results in frivolous litigation,” the letter says. Businesses should have “a reasonable opportunity to cure violations of the law that do not result in harm before enforcement actions can be taken.”

The same day the letter was released, influential privacy advocacy organizations published a report ranking nearly half of state privacy laws as failures. These laws have led to weaker consumer protections than before their enactment.

Attorneys counseling clients on privacy should stay aware of jurisdictional differences, which can influence several business decisions while keeping close track of state, local, and federal legislation.