Yesterday, U.S. Senator, John Thune (R-S.D.), chairman of the Senate Committee on Commerce, Science, and Transportation summoned a hearing titled ‘Examining Safeguards for Consumer Data Privacy’. Executives from AT&T, Amazon, Google, Twitter, Apple, and Charter Communications provided their testimonies to the Committee.
The hearing took place to,
- examine privacy policies of top technology and communications firms,
- review the current state of consumer data privacy, and
- offer members the opportunity to discuss possible approaches to safeguarding privacy more effectively.
John Thune opened the meeting by saying, “This hearing will provide leading technology companies and internet service providers an opportunity to explain their approaches to privacy, how they plan to address new requirements from the European Union and California, and what Congress can do to promote clear privacy expectations without hurting innovation.”
The two biggest issues surrounding the hearing included questions of jurisdiction and enforcement. The other issues discussed were,
- whether privacy policies should be legally mandated as opt-in or opt-out
- the ability to download data, and withdraw consent for data collection
- whether ad-based business models can truly protect customer’s information
- how privacy policies translate to companies’ work overseas (particularly in China)
Tech industries choose Federal law over state laws
A few months back, Europe and California passed strong laws governing online privacy and data, which the experts say are the most stringent and comprehensive protections. Due to these stringent laws, the tech industry is leaning towards having a common federal law that overrides state rules instead of multiple state laws.
The hearing included a good argument between the two parties on how online privacy at the federal level is better than the state level. Federal commerce laws address inter-state commerce, and online information and business flows between states. The tech companies expressed interest in having the opportunity to weigh in on the contents of the federal law, should be considered.
Many tech companies expressed their concern that having a state legislation could result in a patchwork of laws. However, AT&T’s representative did not actually express why a federal law would be beneficial. The representative said that, if state law prevailed over federal law, the industry will be forced to comply with the most restrictive aspects of each state’s law.
As a reply to the tech industries, Senator Brian Schatz (D-HI) said,
“Your holy grail is ‘preemption’ and we’re not going to replace a strong California law with a weaker federal one.”
Regarding the second biggest issue, which is enforcement, multiple senators asked the tech companies whether they believed enforcement for consumer data protection should rest with the FTC (Federal Trade Commission). They also questioned whether FTC’s power to enforce laws should be expanded. At present, the FTC levies fine based on a complex order of operations, that involves tech companies agreeing that they have done something wrong before the FTC can enforce anything. To this, the tech companies had a mixed reaction.
Senator Richard Blumenthal (D-CT) said, “Voluntary rules have proved insufficient to protect privacy.”
The Congressional hearing reenforced the idea that the tech industry has accepted the fact that privacy regulation is coming. Once this happens, these companies would rather have a say in the regulation than oppose it.
To know about the hearing in detail watch the complete video on the U.S. Senate Committee website.