Privacy & Data Security Law News

State Pre-emption Debate May Slow Senate Privacy Bill Rollout

March 27, 2019, 7:03 PM

A split between Senate lawmakers on the question of pre-empting state privacy laws may delay the unveiling of a broad federal measure to govern companies’ data handling practices.

Alphabet Inc.'s Google, the U.S. Chamber of Commerce, and a raft of other companies and groups are urging Congress to pass a law shielding them from California’s tough privacy statute. A quartet of senators, including Jerry Moran (R-Kan.) and Richard Blumenthal (D-Conn.), are working on legislation that Moran told reporters March 26 may be ready “in the next several days or week.”

Blumenthal told reporters March 26 that lawmakers should consider “pre-emption as a floor,” meaning that a bill overriding state privacy laws should include provisions at least as strict as those in the California Consumer Privacy Act. Blumenthal said he wants to raise the bar through federal legislation, not lower it.

That puts Blumenthal at odds with Moran, who wants to pre-empt the states without using the California law as a model. Moran will only back “full pre-emption of all state laws” in a Senate bill, Tom Brandt, a Moran spokesman, said in an email. Congress should establish a “clear, single national framework for privacy regulation across all states while pre-empting their ability to legislate on top of the federal standard,” Brandt said.

Moran and Blumenthal have been working on a bill with with Senate Commerce, Science and Transportation Committee chairman Roger Wicker (R-Miss.) and Brian Schatz (D-Hawaii). The four lawmakers are weighing a potential compromise under which Congress would give the Federal Trade Commission more powers to regulate data privacy in exchange for pre-empting state laws.

Tech companies have told lawmakers that California’s comprehensive privacy regime likely will prompt other states, such as Washington and New York, to pass their own privacy laws. Companies and tech groups say a patchwork of state privacy laws is untenable and harms innovation.

The Senate Commerce group will meet in the next “few days” to sort through the remaining issues on the table, Moran said. The group will see if an “acceptable” agreement can be reached that would provide consumer protections in exchange for broad pre-emption, Moran said.

“I don’t think the differences are insurmountable,” Moran said.

House Speaker Nancy Pelosi (D-Calif.), Sen. Dianne Feinstein (D-Calif.), and other members of the California congressional delegation, oppose any measure that would pre-empt California’s law. Lawmakers from Washington state also may push back against full pre-emption as their state’s privacy bill gains momentum, tech policy strategists 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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