Heated Debate Surrounds Proposed Federal Privacy Legislation
As we previously reported on the CPW blog, the leadership of the House Energy and Commerce Committee and the Ranking Member of the Senate Commerce Committee released a discussion draft of proposed federal privacy legislation, the American Data Privacy and Protection Act (“ADPPA”), on June 3, 2022. Signaling potential differences amongst key members of the Senate Committee on Commerce, Science, and Transportation, Chair Maria Cantwell (D-WA) withheld her support. Staking out her own position, Cantwell is reportedly floating an updated version of the Consumer Online Privacy Rights Act (“COPRA”), originally proposed in 2019.
Early Stakeholder Disagreement
As soon as a discussion draft of the ADPPA was published, privacy rights organizations, civil liberty groups, and businesses entered the fray, drawing up sides for and against the bill. The ACLU came out as an early critic of the legislation. In an open letter to Congress sent June 10, the group urged caution, arguing that both the ADPPA and COPRA contain “very problematic provisions.” According to the group, more time is required to develop truly meaningful privacy legislation, as evidenced by “ACLU state affiliates who have been unable to stop harmful or effectively useless state privacy bills from being pushed quickly to enactment with enormous lobbying and advertising support of sectors of the technology industry that resist changing a business model that depends on consumers not having protections against privacy invasions and discrimination.” To avoid this fate, the ACLU urges Congress to “bolster enforcement provisions, including providing a strong private right of action, and allow the states to continue to respond to new technologies and new privacy challenges with state privacy laws.”
On June 13, a trio of trade groups representing some of the largest tech companies sent their open letter to Congress, supporting passage of a federal privacy law, but ultimately opposing the ADPPA. Contrary to the position taken by the ACLU, the industry groups worry that the bill’s inclusion of a private right of action with the potential to recover attorneys’ fees will lead to litigation abuse. The groups took issue with other provisions as well, such as the legislation’s restrictions on the use of data derived from publicly-available sources and the “duty of loyalty” to individuals whose covered data is processed.
Industry groups and consumer protection organizations had the opportunity to voice their opinions regarding the ADPPA in a public hearing on June 14. Video of the proceedings and prepared testimony of the witnesses are available here. Two common themes arose in the witnesses’ testimony: (1) general support for federal privacy legislation; and (2) opposition to discrete aspects of the bill. As has been the case for the better part of a decade in which Congress has sought to draft a federal privacy bill, two fundamental issues continue to drive the debate and must be resolved in order for the legislation to become law: the private right of action to enforce the law and preemption of state laws or portions of them. . While civil rights and privacy advocacy groups maintain that the private right of action does not go far enough and that federal privacy legislation should not preempt state law, industry groups argue that a private right of action should not be permitted and that state privacy laws should be broadly preempted.
The Path Forward
The Subcommittee on Consumer Protection and Commerce of the House Energy and Commerce Committee is expected to mark up the draft bill the week of June 20. We expect the subcommittee to approve the draft bill with little or no changes. The full Energy and Commerce Committee should complete work on the bill before the August recess. Given the broad bipartisan support for the legislation in the House, we anticipate that the legislation, with minor tweaks, is likely to be approved by the House, setting up a showdown with the Senate after a decade of debate.
With the legislative session rapidly drawing to a close, the prospects for the ADPPA’s passage remain unclear. Intense disagreement remains amongst key constituency groups regarding important aspects of the proposed legislation. Yet, in spite of the differences, a review of the public comments to date regarding the ADPPA reveal one nearly unanimous opinion: the United States needs federal privacy legislation. In light of the fact that most interested parties agree that the U.S. would benefit from federal privacy legislation, Congress has more incentive than ever to reach compromise regarding one of the proposed privacy bills.