Despite several failed attempts in recent years, there is a new effort underway to enact a federal data privacy law, and it’s being led by a somewhat unlikely source – the tech industry. Although they were resistant to a federal privacy law in the past, powerful tech industry players now appear to be publicly embracing such legislation. Last week, several tech industry trade groups and consortia released statements supporting the creation of a national privacy law. In addition, on September 26, 2018, executives of major tech companies are scheduled to testify before the Senate Commerce Committee in a hearing titled “Examining Safeguards for Consumer Data Privacy.”
Why the change of heart? The tech industry is increasingly concerned that other states will follow California’s lead and adopt strict new privacy laws modeled upon the European Union’s General Data Protection Regulation (GDPR). The tech companies fear they will be faced with obligations to comply with an overwhelmingly complicated patchwork of onerous state data privacy laws, and that they may be subject to more class action lawsuits in which plaintiffs will have the presumption of statutory damages. A federal privacy law could pre-empt such state laws and, if the tech industry has its way, could impose less restrictive requirements on the online collection, use and disclosure of consumer data.
How likely is it that Congress will enact a federal data privacy law? Chances are, it is unlikely that we will see such legislation anytime soon. There are several bills pending in Congress related to consumer data privacy, but none are close to being enacted. However, over the summer, the White House announced that the National Economic Council is drafting a proposed consumer privacy policy for Congress to use as the basis for a federal privacy law. Although the Trump administration has met with representatives from the tech industry and others who support more relaxed rules for information privacy, there is pressure from consumer groups to implement stronger privacy protections. It remains to be seen what approach the administration’s proposed policy will take.
