Key Senate Democrats Want Criminal Penalties in Privacy Law

A group of top Senate Democrats said on Monday that any federal privacy legislation should include the possibility that violators will face criminal penalties or consumer lawsuits.

Senate Minority Leader Chuck Schumer and top Democrats on relevant committees issued a set of privacy principles -- rather than legislative text -- that reiterated proposals that Republicans have rejected.

“I applaud my colleagues for their great work and am proud to support these strong principles,” Schumer said in a statement.

Lawmakers on both sides of the aisle have been calling for laws to tackle data use, but the pushes have produced little consensus in Congress. What began earlier this year as an effort to write a law by a bipartisan group of legislators on the Senate Commerce Committee collapsed in June.

Committee Democrats including Senators Maria Cantwell of Washington, Richard Blumenthal of Connecticut and Brian Schatz of Hawaii -- all signed onto the principles. The recommendations include giving consumers rights to see what information is collected about them, to move their data between competing services, to get insight into algorithmic decisions and potentially challenge them.

Companies would also have to minimize the amount of information they collect and how they share it, even within their firms.

While Republicans and Democrats have agreed on aspects of offering consumers more control, they have remained divided on some points, particularly involving enforcement and questions around the role of existing state laws, including California’s stringent statute, which Republicans would like to overrule.

Democrats have faulted existing enforcement measures as slaps on the wrist, especially in Facebook Inc.’s recent $5 billion settlement with the Federal Trade Commission for privacy violations, which included flouting a prior deal over data misuse.

Observers have said the failure to produce draft legislation after months of promises suggest the process has broken down, although lawmakers have insisted negotiations are ongoing. Although they’re in the minority, Democrats have ability to extract compromise because of Senate rules.

In response to the proposals, the U.S. Chamber of Commerce, a powerful business lobbying group, said that Congress would not be able to give “consumers certainty about how their data is used and shared” without Democrats and Republicans working together.

In addition to Cantwell, who is the top Democrat on the commerce panel, ranking members of the Judiciary Committee; Banking Committee; and Health, Education, Labor and Pensions Committee all signed on to the principles. The panels all have jurisdiction over major aspects of data regulation, such as health privacy, although the Commerce Committee had been leading the effort to produce a national law.

Senator Ron Wyden of Oregon, who had previously floated criminal penalties for privacy violators, and Senator Ed Markey of Massachusetts, a longtime children’s privacy advocate, also signed on.

In addition to the Commerce Committee, members of the Judiciary Committee have begun the process of discussing legislation to tackle both data use and competition. It most recently met Nov. 15 to discuss ethical uses of consumer data.

The Democratic-controlled House has also been working on legislation, and bills without wide buy-in have been proposed in both chambers.

--With assistance from Rebecca Kern.

To contact the reporter on this story:
Ben Brody in Washington, D.C. at btenerellabr@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Keith Perine

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