Big Tech, Democrats and Republicans Seek Federal Privacy Law Deal

In October 2021, Facebook’s whistleblower Frances Haugen testified to the U.S. Congress about internal documents showing harms from the company’s products, adding fuel to efforts to pass tougher regulations on Big Tech. The documents gathered by Haugen showed how Facebook’s moderation rules favor elites and how its algorithms foster discord. Haugen put significant pressure on the U.S. Congress to do something to control these harms. 

Unlike other countries, the U.S. has never enacted complete consumer privacy legislation, opting instead for limited protections for financial, health and other highly personal data. This has raised concerns about internet companies’ potential to infiltrate users’ daily lives, especially as the corporations have developed increasingly sophisticated techniques for tracking customers’ purchase habits, location and other facts. However, after many false starts, congressional leaders are seriously discussing long-stalled consumer-privacy legislation, raising the likelihood of a bipartisan bill becoming a reality. 

Democratic and Republican leaders of the Senate Committee on Commerce, Science and Transportation, as well as the House Committee on Energy and Commerce, are involved in the policy discussions. According to the Wall Street Journal, they want to set restrictions on internet firms’ acquisition, storage and use of personal data from customers. In one version being considered, consumers would be allowed to access their personal information, for example, and make modifications or deletions, or move the data to a different web platform, according to the sources. The ability for users to opt out of sharing numerous sorts of data with third parties is also being considered, according to the sources. Protections against online discrimination, such as in targeted housing or employment advertising, are also likely to be included. 

But important policy obstacles still remain, and if an agreement isn’t reached over the next few weeks, the attempt might collapse as political divisions deepen in the run-up to the November midterm elections. 

Notably, Big Tech firms started to press for a nationwide privacy standard, which many see as preferable to a patchwork of state laws, and which could help lessen calls for antitrust legislation that would strike corporations even harder. This is after years of vehemently opposing privacy legislation. 

Federal legislation is projected to supersede state laws, at least to some extent, which is a selling point for the tech industry. California, Colorado, Utah and Virginia, for example, have all passed robust privacy legislation. According to Jessica Rich, a former head of the Federal Trade Commission’s Bureau of Consumer Protection who currently works at law firm Kelley Drye & Warren LLP, states utilize different rules to determine whether companies and data are protected. 

Technet, which includes Apple Inc., Google, Amazon.com Inc., and Meta Platforms Inc., which owns Facebook and Instagram, is now lobbying for a federal privacy law and recently tweeted images of its members meeting with leading lawmakers, including Senate Democratic Leader Chuck Schumer (D., N.Y.) and House Speaker Nancy Pelosi (D., Calif.). 

The Goal of the Federal Trade Commission 

The FTC has been long advocating for a federal privacy law — the last time was in a privacy event in Washington on April 11 where FTC Chair Lina Khan also called for a new approach to consumer data protection. 

The FTC has been filling this void with enforcement actions, but Khan acknowledged that even with the FTC’s enforcement efforts, new federal legislation will be key to make a significant paradigm shift.  

Khan could also propose new privacy rules at the FTC, but she is unlikely to move forward with any proposed rule until President’s Biden nominee, Alvaro Bedoya, is confirmed as the third democratic seat at the agency. 

Read More: FTC Chair Wants to Step up Privacy Protection With New Rules