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Federal Privacy Bill Stalls Again – Privacy Protection

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Congress started the summer with an apparently strong desire to
pass national consumer privacy legislation, and came out of the
gate with a bipartisan, bicameral bill (the ADPPA) that received
quick action and strong support. As the summer went by, however,
two major obstacles appeared; and now that Congress is back in
session after August recess, the prospects for passage appear
increasingly dim.

The ADPPA would pre-empt existing state privacy laws to
establish a national minimum privacy standard, which is one central
sticking point. The other obstacle is that, although the bill would
allow consumers to sue companies directly for violations, there are
some procedural limits on exercising those rights.  

Upon return from August recess, House Speaker Nancy Pelosi
stated that she would not bring the bill to a vote because of its
preemption provisions. She represents California, which has the
most robust privacy laws in the country. California regulators have
objected to the preemption language in the ADPPA, which they say
would undercut their state law privacy protections.

Why It Matters

The US is virtually alone in the western, developed world in
lacking a national privacy law. Congress has tried to pass one for
years. Historically, it has been unable to reconcile consumer and
business interests to achieve a consensus. Now that the states are
addressing the lack of national privacy legislation by passing
their own laws, there is a third set of concerns that must be
addressed by Congress (pre-emption of state law), which makes the
task that much more complicated.  

Large companies in the US generally already follow the
(stringent) privacy laws of other countries. Increasingly, their
small and medium-sized suppliers face privacy compliance issues,
because it is not clear which laws apply and how strictly to follow
them. EU law is extremely unwieldy, and California has revised and
changed its law almost constantly since its passage in mid-2018. In
theory, having a federal law could help smaller companies
understand their compliance obligations and institute a consistent
approach; but the reality of state laws is fast overtaking any
potential likelihood of a single national law.  

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