Thursday, May 26, 2022

#FSFConf14 Speakers on Need for Federal Privacy Law

At the Free State Foundation's recent Fourteenth Annual Policy Conference, FTC Commissioners Christine Wilson and Noah Phillips voiced their support for a federal data privacy regime. And on May 23, 2022, another speaker at #FSFConf14, USTelecom President & CEO Jonathan Spalter, authored a blog post urging the Biden Administration and Congress to work together "on this essential national priority."

In the meantime, Connecticut has compounded the confusion and chaos wrought by multiple, inconsistent state-level comprehensive data privacy statutes. On May 10, 2022, Governor Ned Lamont signed into law "An Act Concerning Personal Data Privacy and Online Monitoring." Connecticut is the fifth state to date – following California (twice), Virginia, Colorado, and Utah – to fill the federal void.

Nevertheless – and forgive me if I sound like a broken record – recent reporting suggests that federal lawmakers may be making progress behind the scenes toward a workable consensus on data privacy.

During #FSFConf14's "The View from the FTC," a Fireside Chat hosted by Maureen Ohlhausen, former FTC Acting Chairman and Commissioner (a video of which is available here), Commissioner Wilson echoed that optimistic sentiment (direct link here). Describing herself as one who "tend[s] to be a Pollyanna," she stated that "I'm actually hopeful, more hopeful than I have been, because I hear there's a concerted push to get federal privacy legislation across the finish line soon."

Commissioner Wilson also reiterated her position that federal privacy legislation is necessary:

I have been advocating for federal privacy legislation almost from the day that I was sworn in as a Commissioner. And I do think it's important, I think there is a market failure that needs to be addressed. I think consumers have very little understanding of the data that's collected from them and how that data is collected, used, and sold.

I also think that businesses need guardrails, they need to understand the rules of the road. And right now we have states with conflicting opinions about what those guardrails should be, and we have a developing international regime also with conflicting ideas. And so, businesses need clarity and certainty in order to know how to comply with the law, but also to invest and to grow. 

Responding to a related query regarding what the FTC can do in the interim to "to fill the gap," Commissioner Wilson noted the agency's authority under Section 5 of the FTC Act to address "unfair and deceptive acts or practices in or affecting commerce" and subject-matter-specific jurisdiction pursuant to other statutes, such as the Children's Online Privacy Protection Act (COPPA). She also highlighted a "body of consents that provide very good rules of the road."

Later in the Fireside Chat (direct link here), Commissioner Phillips, responding to a question from an audience member regarding smartphone apps, acknowledged the existence, with respect to personal data, of an "information asymmetry" – a concept familiar to those who attended Commissioner Wilson's keynote address during FSF's Twelfth Annual Policy Conference in 2020.

Given that "[c]onsumers may not understand fully what they're engaging in," Commissioner Phillips indicated his support for a "nutrition label" solution:

[O]ne of the things I've always felt would be very useful is to look more carefully at things like labels. And understand, you know, what are ways that we can get good information out to people? We do this in a lot of other areas, right?
And you think about food, right? It's maybe not efficient for me every day to, you know, if I'm at the grocery store, examine each label. But if I care, and if I want to, and the cost to you, the producer of Honey Nut Cheerios, is fairly low, that can be a really beneficial rule. A rule that is good for competition. A rule that allows consumers to shop across products, including for those features. 
So let's take what are you doing with your data, right? And Apple has a version of this, in iOS 14, they have these "nutrition labels," they call them. But it's a way of taking complex subject matter and boiling it down in terms that allow people to sort of shop across products and compare. And perhaps even to create markets around features where markets may not naturally arise.

Relatedly, USTelecom's Mr. Spalter, who participated in Free State Foundation President Randolph May's #FSFConf14 "The 'Hottest Topics' in Communications and Internet Policy" Fireside Chat (a video of which is available here), earlier this week published a blog post titled "Global Privacy Leadership Begins Here at Home."

After acknowledging the Biden Administration's "efforts toward harmonizing strong consumer privacy protections around the world" via the Global Cross-Border Privacy Rules Declaration, Mr. Spalter made the salient point that "for the U.S. to truly lead this worldwide endeavor, our nation must first lead by example here at home."

He therefore "urge[d] the Administration and Congress to work together, with a sense of urgency and purpose, to [adopt national privacy legislation] in the current legislative session." Specifically, a bill that "deliver[s] consistent online privacy protections that apply uniformly across the country and to all companies in the internet ecosystem."