Privacy Standards Should Be Set By Congress, Not FTC, Industry Argues

Congress, and not the Federal Trade Commission, should set a national privacy standard, the industry group Privacy for America is telling lawmakers.

“The regulation of the modern economy, which is data-driven in every way, should be a matter left to the democratically accountable legislative branch,” Privacy for America says in a letter sent Tuesday to lawmakers on the House Energy & Commerce Committee. “Agencies like the Federal Trade Commission should act only when directly instructed to do so by Congress through specific authorities contained in legislation.”

The letter was sent in advance of Wednesday morning's hearing on privacy by the Subcommittee on Innovation, Data, and Commerce.

That hearing will address “how personal data is currently treated and handled in today’s digital ecosystem and the dangers facing the U.S. if Congressional inaction continues,” according to the Republican staff memo.

Among other issues, the hearing will address how “the emerging patchwork of state laws” affects businesses, and the difference “between a company using first party data for advertising and transferring such data to a third party for advertising.”

“Advertising in the digital age has prompted Americans to question how their information is collected, processed, and transferred,” the staff memo states. “Many Americans certainly appreciate the ease of shopping online that comes with different advertising practices. However, the American people deserve more transparency into the ways in which theses targeted advertising practices exploit their data and should be granted more autonomy to decide how they want to participate in the digital advertising ecosystem.”

The hearing comes as the FTC considers issuing privacy regulations that could affect companies' ability to collect and harness online data for advertising.

Privacy for America -- whose members include the American Association of Advertising Agencies, Association of National Advertisers, Digital Advertising Alliance, Interactive Advertising Bureau and Network Advertising Initiative -- previously urged the FTC to refrain from issuing broad privacy rules.

The umbrella industry group also argues in its letter to Congress that privacy legislation should prohibit companies from “meddling” with other businesses' ability to collect data.

“No company, just because of its position in the marketplace as the intermediary between consumers and publishers, should be able to interfere in the legitimate, responsible, data practices of others,” the letter states. “This is especially true when those private actors do so to further their own financial goals to the detriment of their competitors. A federal law should prohibit such meddling.”

The letter doesn't mention any companies by name, but ad organizations have previously criticized Apple for mobile privacy settings that require app developers to obtain users' opt-in consent to tracking, and Google for its plan to block ad-tech companies' cookies.

While the ad industry supports a bill that would override state laws, others argue that states should be able to enforce their own, more stringent privacy standards.

California Governor Gavin Newsom, Attorney General Rob Bonta, and California Privacy Protection Agency executive director Ashkan Soltani urged federal lawmakers to avoid passing federal legislation that would override California's law.

The bipartisan American Data Privacy And Protection Act, which advanced last year in the House Energy and Commerce Committee, would have effectively invalidated the bulk of California's privacy law.

Newsom and the others specifically argue that the American Data Privacy and Protection Act should be amended so that it no longer trumps California's privacy law.

“Given the reality of technology’s rapid pace, Americans would be best served by a strong federal privacy law that also allows states to continue our legislative efforts to protect our residents,” Newsom and the others say in a letter sent to Congress on Tuesday. “Passing a strong federal law today that remains strong tomorrow must be reinforced with language that allows the states to legislatively innovate and respond in real-time to emerging consumer protection issues.”

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