Will 2019 be the year of privacy legislation? To start the process, the House Energy and Commerce Committee and the Senate Commerce Committee each held hearings on consecutive days this week. The hearings included representatives of the internet industry, internet service providers, advertisers, retailers, advocacy groups, academics and others. Here are the major takeaways:
- There was general agreement on both sides of the dais on the need for federal privacy legislation. This agreement, however, probably masks important differences on what such legislation should include that may make enactment difficult.
- The “Notice and Choice” framework, the foundation of the Fair Information Practice Principles (FIPPs) and many privacy laws and proposals for decades, is now widely viewed as unworkable. Rational consumers don’t want to deal with the plethora of choices involved. What might replace this framework is unclear.
- Following the enactment of the California Consumer Privacy Act (CCPA) and other state laws, preemption was the most visible area of disagreement. Those favoring preemption noted that digital markets are at least national in scope and it is costly for businesses and consumers to deal with a patchwork of state regulations. Those opposed to preemption believe a federal law should be a floor, not a ceiling and that state representatives (e.g., from California) would not acquiesce to preemption.
- Several witnesses cautioned against the U.S. following the European General Data Protection Regulation (GDPR) or CCPA models. The GDPR has already been shown to be harmful to competition and consumers. (CCPA will not take effect until 2020).
- The hearings generally skirted over the difficulties of crafting a new regulatory regime that doesn’t restrict data uses beneficial for consumers. There was little discussion of the large benefits to consumers from data used for legitimate commercial purposes and the lack of demonstrable harms.
Thomas Lenard is Senior Fellow and President Emeritus at the Technology Policy Institute. Lenard is the author or coauthor of numerous books and articles on telecommunications, electricity, antitrust, privacy, e-commerce and other regulatory issues. His publications include Net Neutrality or Net Neutering: Should Broadband Internet Services Be Regulated?; The Digital Economy Fact Book; Privacy and the Commercial Use of Personal Information; Competition, Innovation and the Microsoft Monopoly: Antitrust in the Digital Marketplace; and Deregulating Electricity: The Federal Role.
Before joining the Technology Policy Institute, Lenard was acting president, senior vice president for research and senior fellow at The Progress & Freedom Foundation. He has served in senior economics positions at the Office of Management and Budget, the Federal Trade Commission and the Council on Wage and Price Stability, and was a member of the economics faculty at the University of California, Davis. He is a past president and chairman of the board of the National Economists Club.
Lenard is a graduate of the University of Wisconsin and holds a PhD in economics from Brown University. He can be reached at [email protected]
