Senate Commerce Republicans Introduce Broadened Privacy Legislation

Akin Gump Strauss Hauer & Feld LLP

[co-author: Taylor Daly, Public Policy Specialist]

On Thursday, September 17, Senate Commerce Committee Chairman Roger Wicker (R-MS) and other Committee Republicans introduced a finalized version of their long-awaited data privacy legislation, which was first unveiled as a discussion draft in November 2019 as a counter to Ranking Member Maria Cantwell’s (D-WA) proposal.

The Setting an American Framework to Ensure Data Access, Transparency, and Accountability (SAFE DATA) Act would provide for several consumer rights, preempt state privacy laws and be enforced by the Federal Trade Commission (FTC). The measure deviates from Ranking Member Cantwell’s proposal unveiled last year by preempting state privacy laws, while also declining to provide for a private right of action.

The bill prohibits covered entities from transferring or processing an individual’s sensitive covered data without obtaining prior, affirmative express consent. The revised version of the measure now includes persistent identifiers in its definition of “sensitive covered data,” which also includes covered data that is biometric information; precise geolocation information; a government-issued identifier that is not required to be displayed to the public; any covered data that describes or reveals a diagnosis or treatment of an individual; or financial account numbers, among other items.

The measure requires large data holders to conduct a privacy impact assessment of each of their processing activities involving covered data that present a heightened risk of harm to individuals. Following the initial privacy assessment, these entities must continue to conduct a privacy impact assessment every two years. The broader measure has carved out additional entities from its definition of “large data holder,” limiting the definition to covered entities that process or transfer the covered data of more than eight million individuals (previously five million), or process or transfer the sensitive covered data of more than 300,000 individuals or devices (previously 100,000).

Regarding enforcement, the bill restores the FTC’s ability to obtain monetary remedies for consumers, which is an issue the agency has asked Congress to address. The measure contains new language authorizing the Commission to seek equitable remedies in court, including the ability to seek restitution for consumer loss resulting from such violation, rescission or reformation of contracts, and the refund of money or return of property.

The SAFE DATA Act also now includes Sen. John Thune’s (R-SD) bipartisan Filter Bubble Transparency Act, which requires platforms to clearly notify users when they use computer-generated filters that determine the order or manner in which content is delivered to users. These platforms are required to provide users with the option of a filter bubble-free view of the information they provide and enable users to transition between the two versions.

In addition, the measure includes Sen. Deb Fischer’s (R-NE) bipartisan Deceptive Experiences To Online Users Reduction (DETOUR) Act, which aims to curb manipulative dark pattern behavior by prohibiting platforms with over 100 million monthly active users from relying on user interfaces that intentionally impair user autonomy, decision-making or choice. The legislation enables the creation of a professional standards body, which can register with the FTC, to focus on best practices surrounding user design for large online operators.

The bill’s introduction was preceded by a notice for a privacy hearing before the Senate Commerce Committee on Wednesday, September 23. While the bill is unlikely to gain traction in the limited number of legislative days on the calendars for each chamber of Congress, its introduction and the Committee’s upcoming hearing could potentially set the stage for a privacy push next year.

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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