Democrats Win Fresh Clout in Looming Data Privacy Bill Debate

Nov. 7, 2018, 9:30 AM

House Democrats are likely to push for a robust data privacy law when they take control of the chamber next year.

The White House, individual lawmakers, industry groups, and top tech companies, including Microsoft Corp. proposed frameworks or drafted bills before the midterm elections—initial steps that will kick into high gear in the next Congress. Alphabet Inc.'s Google, Facebook Inc. and other tech giants are pressuring lawmakers to harmonize a patchwork of state data breach laws and preempt a California state privacy law.

Republicans, particularly in the Senate, have been preparing for the effort by holding hearings and drafting bills. Now they’ll have to negotiate with the new House majority, rather than just overcoming a Senate filibuster threat, to get a bill to President Donald Trump’s desk. Reps. Frank Pallone (D-N.J.) and Jerrold Nadler (D-N.Y.) the likely chairmen of the Energy and Commerce and Judiciary Committees next year, are positioned to drive the debate in the House.

House Democrats are likely to take a page from recent Senate privacy proposals by Sens. Ron Wyden (D-Ore.), Richard Blumenthal (D-Conn.), and Ed Markey (D-Mass.). The three Senate Democrats favor enhanced Federal Trade Commission enforcement power and new consumer privacy protections.

The Democrats also may look to privacy advocacy group blueprints and letters released in the run up to the election. The Electronic Frontier Foundation, for example, has called for a consumer private right of action. They’ll also take into account legislative frameworks from the BSA | The Software Alliance, the U.S. Chamber of Commerce, and the Internet Association, a tech industry trade group.

Senate Republicans are unlikely to make a deal on a bill unless it preempts California’s Consumer Privacy Act, Senate GOP aides said. The party will push for state preemption if companies follow voluntary privacy best practices, they said.

Democrats may willingly give up some of their policy proposals to get some Republicans on board, a former Democratic congressional aide familiar with House lawmakers’ thinking told Bloomberg Law on the condition of anonymity to discuss the matter. They’re likely to allow some preemption of state privacy laws if the FTC gets civil enforcement and rule-making authority, along with statutory consumer privacy rights, the former aide said.

Industry groups, state lawmakers, and privacy groups will try to influence House Democrats now that they have control of the lower chamber, tech policy strategists said.

“The business community is looking for preemption, states that have already passed legislation (like CA, for example) are looking for high standards, consumer groups are looking for more than just a promise of transparency, and other privacy advocates are hoping for regulatory enforcement that comes with teeth,” Georgette Spanjich, a tech policy strategist at Plurus Strategies in Washington, told Bloomberg Law in an email.

To be sure, the Democrats are still facing a GOP-controlled Senate. But there are some areas that could unite Republicans and Democrats andmake negotiations go more smoothly, Tom Struble, tech policy manager at Washington-based think tank R-Street Institute and a former FCC staffer, told Bloomberg Law.

Republicans and Democrats agree that the state patchwork of data breach notification laws is unworkable, so they may be able to compromise on a national standard and reach a solution, Struble said.

To contact the reporter on this story: Daniel R. Stoller in Washington at dstoller@bloomberglaw.com

To contact the editor responsible for this story: Keith Perine at kperine@bloomberglaw.com

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