More than three dozen industry groups are urging Congress to pass a federal data privacy law that would replace a patchwork of state laws. In a letter sent to both Republican and Democratic leaders of the House and Senate Commerce Committees, these groups argued that a national standard would make it easier for businesses to comply with privacy regulations. They emphasized that a unified federal law could benefit small businesses by helping them compete on a larger scale, ultimately lowering prices and expanding consumer access to goods and services.
The push for comprehensive data privacy legislation has been ongoing for years, but previous attempts have failed due to disagreements in Congress.
Key points of contention have included the issue of preemption, where federal law could override state regulations, and the right of individuals to sue companies over privacy violations. Efforts to move forward with privacy laws have been stalled multiple times, with the most recent setback occurring when a scheduled mark-up was canceled last June, and the legislation failed to pass by the end of the session.
The industry groups support preemption, which would replace existing state laws with a federal standard. However, this move could diminish strong state protections, such as Illinois’ biometric privacy law and California’s consumer-focused privacy law. Notably, the letter did not address the regulation of data brokers, who play a significant role in personal data trafficking. Previous legislative efforts have sought to impose regulations on data brokers, but this issue is noticeably absent from the latest request.
Privacy advocates have raised concerns that the proposed federal privacy framework is not strong enough. While the letter suggests that companies should be transparent about their data practices and minimize the data they collect, experts argue that the bill mirrors provisions in weaker state laws. Additionally, the letter calls for more stringent measures, such as requiring companies to obtain consent before processing sensitive data and ensuring they do not discriminate against individuals based on their data. However, privacy groups worry that the new law may favor business interests and weaken consumer protections.
