9 min read

The Senate Commerce Committee held a hearing yesterday on consumer data privacy. The hearing focused on the perspective of privacy advocates and other experts. These advocates encouraged federal lawmakers to create strict data protection regulation rules, giving consumers more control over their personal data. The major focus was on implementing a strong common federal consumer privacy bill “that sets a floor, not a ceiling.

Representatives included Andrea Jelinek, the chair of the European Data Protection Board; Alastair Mactaggart, the advocate behind California’s Consumer Privacy Act; Laura Moy, executive director of the Georgetown Law Center on Privacy and Technology; and Nuala O’Connor, president of the Center for Democracy and Technology.

The Goal: Protect user privacy, allow innovation

John Thune, the Committee Chairman said in his opening statement, “Over the last few decades, Congress has tried and failed to enact comprehensive privacy legislation. Also in light of recent security incidents including Facebook’s Cambridge Analytica and another security breach, and of the recent data breach in Google+, it is increasingly clear that industry self-regulation in this area is not sufficient. A national standard for privacy rules of the road is needed to protect consumers.

Senator Edward Markey, in his opening statement, spoke on data protection and privacy saying that “Data is the oil of the 21st century”. He further adds, “Though it has come with an unexpected cost to the users, any data-driven website that uses their customer’s personal information as a commodity, collecting, and selling user information without their permission.” He said that the goal of this hearing was to give users meaningful control over their personal information while maintaining a thriving competitive data ecosystem in which entrepreneurs can continue to develop.

What did the industry tell the Senate Commerce Committee in the last hearing on the topic of consumer privacy?

A few weeks ago, the Commerce committee held a discussion with Google, Facebook, Amazon, AT&T, and other industry players to understand their perspective on the same topic. The industry unanimously agreed that privacy regulations need to be put in place However, these companies pushed for the committee to make online privacy policy at the federal level rather than at the state level to avoid a nightmarish patchwork of policies for businesses to comply by.

They also shared that complying by GDPR has been quite resource intensive. While they acknowledged that it was too soon to assess the impact of GDPR, they cautioned the Senate Commerce Committee that policies like the GDPR and CCPA could be detrimental to growth and innovation and thereby eventually cost the consumer more. As such, they expressed interest in being part of the team that formulates the new federal privacy policy. Also, they believed that the FTC was the right body to oversee the implementation of the new privacy laws.

Overall, the last hearing’s meta-conversation between the committee and the industry was heavy with defensive stances and scripted almost colluded recommendations. The Telcos wanted tech companies to do better. The message was that user privacy and tech innovation are too interlinked and there is a need to strike a delicate balance to make privacy work practically.

The key message from yesterday’s Senate Commerce Committee hearing with privacy advocates and EU regulator

This time, the hearing was focused solely on establishing strict privacy laws and to draft clear guidelines regarding, definitions of ‘sensitive’ data, prohibited uses of data, and establishing limits for how long corporations can hold on to consumer data for various uses.

A focal point of the hearing was to give users the key elements of Knowledge, Notice, and No. Consumers need knowledge that their data is being shared and how it is used, notice when their data is compromised, and the ability to say no to the entities that want their personal information.

It should also include limits on how companies can use consumer’s information. The bill should prohibit companies from giving financial incentives to users in exchange for their personal information. Privacy must not become a luxury good that only the fortunate can afford.

The bill should also ban “take it or leave it” offerings, in which a company requires a consumer to forfeit their privacy in order to consume a product. Companies should not be able to coerce users into providing their personal information by threatening to deprive them of a service.

The law should include individual rights like the ability to access, correct, delete, and remove information. Companies should only collect user data which is absolutely necessary to carry out the service and keep that private information safe and secure. The legislation should also include special protections for children and teenagers.

The federal government should be given strong enforcement powers and robust rule-making authority in order to ensure rules keep pace with changing technologies. Some of the witnesses believed that the FTC may not the right body to do this and that a new entity focused on this aspect may do a better and more agile job.

“We can’t be shy about data regulation”, Laura Moy

Laura Moy, Deputy Director of the Privacy and Technology center at Georgetown University law center talked at length about Data regulation. “This is not a time to be shy about data regulation,” Moy said. “Now is the time to intervene.

She emphasized that information should not in any way be used for discrimination. Nor it should be used to amplify hate speech, be sold to data brokers or used to target misinformation or disinformation. She also talked about Robust Enforcement, where she said she plans to call for legislation to “enable robust enforcement both by a federal agency and state attorneys general and foster regulatory agility.

She also addressed the question of whether companies should be able to tell consumers that if they don’t agree to share non-essential data, they cannot receive products or service? She disagreed saying that if companies do so, they have violated the idea of “Free choice”. She also addressed issues as to whether companies should be eligible for offering financial initiatives in exchange for user personal information,

“GDPR was not a revolution, but just an evolution of a law [that existed for 20 years]”, Andrea Jelinek

Andrea Jelinek, Chairperson, European Data Protection Board, highlighted the key concepts of GDPR and how it can be an inspiration to develop a policy in the U.S. at the federal level.

In her opening statements, she said, “The volume of Digital information doubles every two years and deeply modifies our way of life. If we do not modify the roots of data processing gains with legislative initiatives, it will turn into a losing game for our economy, society, and each individual.”

She addressed the issue of how GDPR is going to be enforced in the investigation of Facebook by Ireland’s Data protection authority. She also gave stats on the number of GDPR investigations opened in the EU so far.

From the figures dating till October 1st, GDPR has 272 cases regarding identifying the lead supervisory authority and concern supervisory authority. There are 243 issues on mutual assistance according to Article 61 of the GDPR. There are also 223 opinions regarding data protection impact assessment.

Company practices that have generated the most complaints and concerns from consumers revolved around “User Consent”. She explained why GDPR went with the “regulation route”, choosing one data privacy policy for the entire continent instead of each member country having their own.

Jelinek countered Google’s point about compliance taking too much time and effort from the team by saying that given Google’s size, it would have taken around 3.5 hours per employee to get the compliance implemented. She also observed that it could have been reduced a lot, had they followed good data practices, to begin with. She also clarified that GDPR was not a really new or disruptive regulatory framework. In addition to the two years provided to companies to comply with the new rules, there was a 20-year-old data protection directive already in place in Europe in various forms.

In that sense she said, GDPR was not a revolution, but just an evolution of a law that existed for 20 years.

Californians for Consumer Privacy Act

Alastair McTaggart, Chairman of Californians for consumer privacy, talked about CCPA’s two main elements. First, the Right to know, which allows Californians to know the information corporations have collected concerning them. Second, the Right to say no to businesses to stop selling their personal information. He said, “CCPA puts the focus on giving choice back to the consumer and enforced data security, a choice which is sorely needed.” He also addressed questions like, “If he believes federal law should also grant permission for 13, 14, and 15-year-old?

What should the new Federal Privacy law look like according to CDT’s O’Connor

Center for Democracy and Technology (CDT) President and CEO, Laura O’Connor said, “As with many new technological advancements and emerging business models, we have seen exuberance and abundance, and we have seen missteps and unintended consequences. International bodies and US states have responded by enacting new laws, and it is time for the US federal government to pass omnibus federal privacy legislation to protect individual digital rights and human dignity, and to provide certainty, stability, and clarity to consumers and companies in the digital world.

She also highlighted five important pointers that should be kept in mind while designing the new Federal Privacy law.

  1. A comprehensive federal privacy law should apply broadly to all personal data and unregulated commercial entities, not just to tech companies.
  2. The law should include individual rights like the ability to access, correct, delete, and remove information.
  3. Congress should prohibit the collection, use, and sharing of certain types of data when not necessary for the immediate provision of the service.
  4. The FTC should be expressly empowered to investigate data abuses that result in discriminatory advertising and other practices.
  5. A federal privacy law should be clear on its face and provide specific guidance to companies and markets about legitimate data practices.

It is promising to see the Senate Commerce committee sincerely taking in notes from both industry and privacy advocates to enable building strict privacy standards. They are hoping this new legislation is more focused on protecting consumer data than the businesses that profit from it. Only time will tell if a bipartisan consensus to this important initiative will be reached.

For a detailed version of this story, it is recommended to hear the full Senate Commerce Committee hearing.

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