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California AG, former FTC chairs argue about federal privacy law preemption during Senate committee hearing

Federal Issues Federal Legislation Privacy/Cyber Risk & Data Security Data Breach State Issues State Attorney General

Federal Issues

On September 23, the Senate Committee on Commerce, Science, and Transportation held a hearing titled, “Revisiting the Need for Federal Data Privacy Legislation.” The hearing examined the current state of consumer data privacy and legislative efforts to provide baseline data protections for American consumers, and examined the lessons learned from the EU’s Global Data Protection Regulation (GDPR) and recently enacted state privacy laws. Witnesses included a number of former chairs and commissioners of the FTC, along with California Attorney General Xavier Becerra.

Becerra discussed the California Consumer Privacy Act (CCPA), which sets forth various requirements for businesses that collect, transfer, or sell a consumer’s personal information, and provides California residents several rights, including the right to know what data companies have collected on them and the right to ask to delete data or opt-out of its sale. (See continuing InfoBytes coverage on the CCPA here.) Concerning future federal privacy legislation, Becerra stressed that any such legislation should not preempt the work happening at the state level, and he urged the Committee “to favor legislation that sets a federal privacy-protection floor rather than a ceiling,” in order to allow states the opportunity to provide tailored protections for their residents. Becerra also stressed that the ideal federal legal framework would “recognize[] that privacy protections must keep pace with innovation,” and further addressed the need for a meaningful enforcement regime that respects the work undertaken by the states.

Former FTC chairs Jon Leibowitz and Maureen Ohlhausen, however, argued (see here and here) in favor of federal preemption. They suggested that a single national comprehensive privacy standard would be stronger and more comprehensive than existing regimes such as the CCPA and GDPR, and could better serve consumers even if it replaces state regulations. Both stressed that preempting state laws should not mean weakening protections for consumers. Moreover, both Leibowitz and Ohlhausen emphasized that federal privacy legislation should be technology- and industry-neutral, with rigorous standards backed by tough enforcement. Leibowitz also urged Congress to provide the FTC with the ability to impose civil penalties on violators for first-time offenses, and recommended that the FTC be granted the primary authority to administer the law and be given continued authority to provide redress directly to consumers. Former chair William Kovacic presented a different approach, which would establish a domestic privacy network to promote cooperation and coordination between federal and state privacy regulators to improve policy formation.

Other topics covered in the hearing included Chairman Roger Wicker’s (R-MS) recently introduced bill (S. 4626), known as the SAFE DATA Act, which would require businesses to be more transparent about their data collection, processing, and transfer activities, and give consumers more choices and control over their data. Among other things, the bill would preempt privacy laws in California and other states, except in regard to data breaches, and would not include a private right of action allowing consumers to sue over privacy violations.

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