The time is right to modernize our federal rules and develop a national framework for consumer privacy. That framework should be consistent nationwide, proportional, flexible, and should encourage companies to act as good stewards of the personal information provided to them by individuals.
As policymakers and stakeholders work on an updated approach to privacy, we must ensure that a national privacy framework:
Our country’s vibrant internet ecosystem provides individuals with unprecedented personal, social, professional, educational, and financial benefits, contributing an estimated 6 percent of U.S. GDP and nearly 3 million American jobs. The internet enables all levels of government and every sector of the economy to become more citizen- and consumer-centric by providing innovative tools, services, and information, and allowing for a more efficient use of resources.
IA companies believe trust is fundamental to their relationship with individuals. Our member companies know that to be successful they must meet individuals’ reasonable expectations with respect to how the personal information they provide to companies will be collected, used, and shared. That is why our member companies are committed to transparent data practices, and to continually refining their consumer-facing policies so that they are clear, accurate, and easily understood by ordinary individuals. Additionally, our member companies have developed numerous tools and features to make it easy for individuals to manage the personal information they share, as well as their online experiences.
There are a range of strong privacy, data security, consumer protection, and anti-discrimination laws that exist today. These include Section 5 of the FTC Act and the Clayton Act, as well as more than 15 other federal statutes and implementing regulations that are sector specific or relate to particular activities. Additionally, there are myriad state laws relating to privacy and data security, enforced by state attorneys general or private litigants, including state data breach notification statutes and unfair and deceptive acts and practices statutes; data security and encryption laws; and a variety of other privacy laws that relate to online privacy, social security numbers, and data brokers. Our member companies comply with these current laws as well as with self-regulatory principles and rules that govern how they operate and do business. However, this array of laws also creates a “patchwork” effect that complicate compliance efforts and lead to inconsistent experiences for individuals. A new, comprehensive national framework would create more consistent privacy protections that bolster consumers’ privacy and ease compliance for companies.
This document sets forth: (1) principles for a national privacy framework, and (2) considerations for policymakers when evaluating such a national privacy framework.
These privacy principles aim to protect an individual’s personal information, which we define as any information capable of identifying a specific individual or a device that belongs to that individual.
The adoption of the principles identified above would enhance individuals’ personal privacy and ensure individuals’ trust. To ensure the effectiveness of a national privacy framework, these principles must be balanced against: (1) competing individual rights, including freedom of speech and expression; (2) other parties’ privacy interests; (3) data security interests; (4) companies’ needs to protect against fraud or other unlawful activity, or individual safety; (5) companies’ requirements to comply with valid law enforcement requests or judicial proceedings; (6) whether the exercise of the rights afforded individuals are unduly burdensome or excessive in specific instances; and (7) whether individuals’ exercise of their rights would require companies to collect or process additional personal information about that individual.
Fostering privacy and security innovation. A national framework should not prevent companies from designing and implementing internal systems and procedures that enhance the privacy of each individual’s personal information. Companies should take into account privacy and data security when they design and update their services, for example, by de-identifying, pseudonymizing, or aggregating data.
A national data breach notification law. A national framework should specifically preempt the patchwork of different data breach notification laws in all 50 states and the District of Columbia to provide consistency for individuals and companies alike. This national standard should protect individuals and their personal information through clear notifications, define a harm-based trigger for notification to avoid notice fatigue, and allow companies flexibility in how they notify individuals of unauthorized access to their personal information.
Technology and sector neutrality. A national privacy framework should include protections that are consistent for individuals across products and services. Such a framework should be both technology neutral (no specific technology mandates) and sector neutral (applying to online and offline companies alike).
Performance standard based approach. A national privacy framework should focus on accomplishing privacy and data security protections, but laws and regulations should avoid a prescriptive approach to doing so, as such an approach may not be appropriate for all companies and may well become obsolete in light of rapidly developing technology.
Risk-based framework. A national privacy framework should be grounded in a risk-based approach, based on the sensitivity of the personal information, the context of its collection and use, and the risk of tangible harm for its misuse or unauthorized access. Consistent with FTC data security order provisions and the FTC’s unfairness standard, companies should identify and address reasonably foreseeable risks to the privacy and the security of personal information where the result of failing to address the risk would cause, or be likely to cause, tangible consumer harm.
A modern and consistent national framework for individuals and companies. A national privacy framework should be consistent throughout all states, preempting state consumer privacy and data security laws. A strong national baseline creates clear rules for companies and ensures that individuals across the United States can expect consistent data protections from companies that hold their personal information. A national privacy framework should primarily be enforced by the FTC at the federal level and by state attorneys general at the state level, where the FTC declines to act.
 These are the Children’s Online Privacy Protection Act (“COPPA”) and the FTC’s COPPA Rule; the Gramm-Leach-Bliley Act, and the FTC’s Privacy and Safeguards Rules; the Electronic Fund Transfer Act; the Fair Credit Reporting Act; the Fair and Accurate Credit Transactions Act; the Equal Credit Opportunity Act; The Truth in Lending Act; the Controlling the Assault of Non-Solicited Pornography and Marketing (“CAN-SPAM”) Act of 2003 and the FTC’s CAN-SPAN Rule; the Telephone Consumer Protection Act; the Restore Online Shopper’s Confidence Act; the Video Privacy Protection Act; the Cable Act; the Electronic Communications Privacy Act; the Computer Fraud and Abuse Act; the Stored Communications Act; the Telemarketing and Consumer Fraud and Abuse Prevention Act and the FTC’s Telemarketing Sales Rule, including the Do Not Call Rule and Registry; and the U.S. Safe Web Act.
 These self-regulatory bodies have developed their own codes of conduct, including the Data and Marketing Associations Ethical Business Practices; the Network Advertising Initiative’s 2018 Code of Conduct; the Digital Advertising Alliance’s set of Self-Regulatory Principles relating to online advertising, which are enforced by the Accountability Program of the Council of Better Business Bureaus; and the Payment Security Industry Data Security Standards (PCI-DSS), for those that accept payment cards.
Washington DC – IA Senior Vice President, Global Government Affairs Michael Bloom issued the following statement on the Online Privacy Act: “The internet industry commends Congresswomen Eshoo and Lofgren for recognizing the urgent need for comprehensive federal privacy legislation and appreciates their hard work and commitment on this issue. More work remains to ensure all… Read more