Consumer Privacy Legislation? All Sides Weigh In But Remain Far Apart in the Big Debate Over Big Data

by Davis Wright Tremaine LLP

Recent comments filed by various stakeholders in response to the U.S. Commerce Department’s National Telecommunications and Information Administration’s (NTIA) Request for Public Comment (RFC) on “Big Data and Consumer Privacy in the Internet Economy,” evidence a wide rift between consumer groups and most business interests regarding the need for additional consumer privacy law in the era of Big Data. NTIA issued its RFC back in June, in response to a recommendation in the May 1 White House report, “Big Data: Seizing Opportunities, Preserving Values” (hereinafter “Big Data Report”), which addressed how big data is transforming the lives of Americans.

In the Big Data Report, the White House recommended (among other things) that:

[t]he Department of Commerce should promptly seek public comment on how the Consumer Privacy Bill of Rights (“CPBR”) could support the innovations of big data while at the same time responding to its risks, and how a responsible use framework . . . could be embraced within the framework established by the [CPRB”]. Following the comment process, the Department of Commerce should work on draft legislative text for consideration by stakeholders and submission by the President to Congress.

The Consumer Privacy Bill of Rights and Big Data

The White House originally presented its CPBR (which, according to the White House, is “a dynamic model of how to offer strong privacy protection and enable ongoing innovation in new information technologies”) in Feb. 2012. At that time, the White House called on companies to implement the CPBR as an enforceable code of conduct and intended to work with Congress to codify the CPBR. Neither goal was achieved. And, even though the CPBR was issued merely a little over two years ago, the concepts of “big data” and “the Internet of Things” (IoT) were arguably unaccounted for. In the May 2014 Big Data Report, the White House expressed its belief that the advent of big data, along with the IoT, may challenge certain concepts underlying its CPBR and other current privacy frameworks, such as notice and consent. As a result, the Big Data Report recommended that any renewed legislative effort to implement the CPBR consider the impact of “big data developments” and the practical limits of existing privacy principles in the big data context.

Stakeholder Comments To NTIA

Both public advocacy and business interest stakeholders filed comments in response to the NTIA’s RFC, but neither side appears to support the process envisioned by the White House. Most of the public interest groups suggested the NTIA scrap the multi-stakeholder process altogether and introduce consumer privacy protection legislation without delay. For instance, a broad coalition of consumer and civil liberties groups, including the American Civil Liberties Union, Center for Digital Democracy, Common Sense Media and several others, commented that “[i]ndustry self-regulation has not worked [and that d]ata collection and sharing is ubiquitous, invisible, intrusive and largely unregulated.” According to these groups, “[t]he Administration … must take bold action now” and pass legislation based on the CPBR. The Center for Digital Democracy (CDD) similarly claims that “[t]he delay in offering even model legislation has contributed to the unchecked growth of unprecedented data gathering on Americans by commercial entities.” The CDD urges the Administration to “offer legislation that ensures its [CPBR] framework actually provides individuals with the control over how their personal information is collected and used.”

While some companies agree with the legislative approach advocated by the public interest sector, most industry stakeholders oppose any new legislation. These big data advocates caution that any new “one-size fits all” consumer privacy legislation will undermine big data’s future potential and its benefits for consumers and the economy. For instance, in response to the NTIA’s inquiry regarding how the CPBR can support innovations of big data while responding to privacy risks, the Interactive Advertising Bureau (IAB) stated that “existing privacy frameworks, as implemented through the current combination of sector-specific laws and robust self-regulation are sufficient to address privacy issues raised by big data.” The IAB believes that “[i]mposing new legislative mandates that apply across industries would strike a severe blow to U.S. innovation and competitiveness.” The United States Chamber of Commerce agrees that “policymakers should restrain from acting unless there are specific, identified harms that cannot be addressed adequately by the current multi-layered approach toward privacy in the United States.” And most of the commenting industry groups and companies endorse the Administration’s concept of a “responsible use framework,” as discussed in the Big Data Report, but through self-regulation, rather than new legislation.

Despite these disparate positions, it is unlikely that the NTIA will follow either approach. Instead, all sides should expect the NTIA to introduce draft privacy legislation based on the CPBR “for consideration by stakeholders.”

FTC Workshop on Big Data

The NTIA is not the only government agency considering the ramifications of big data. The Federal Trade Commission (FTC) will continue its privacy series this fall, beginning with a public workshop entitled “Big Data: A Tool for Inclusion or Exclusion?” on September 15, 2014. As the White House noted in the Big Data Report, from its perspective, “[s]ome of the most profound challenges revealed during [the] review [that lead to the Big Data Report] concern how big data analytics may lead to disparate inequitable treatment, particularly of disadvantaged groups....” The FTC Workshop intends to examine some of these issues, including how current “antidiscrimination and consumer protection laws apply to the use of big data, and whether there may be gaps in the law.” In addition to the issues of transparency, notice and consent, commenters will be weighing in on issues such as whether the Fair Credit Reporting Act adequately addresses the use of big data in the context of consumer scoring and whether self-regulatory programs can fill any gaps that may exist. Given the continuing legislative inertia, self-regulatory programs that incorporate concepts from the CPBR and ensure responsible use of big data appear to be the most viable option for the foreseeable future.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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