US online privacy rules unlikely this year, hurting big tech
A US online privacy bill is not likely to come before Congress this year, sources said, as lawmakers disagree over issues like whether the bill should preempt state rules, forcing companies to deal with much stricter legislation in California that goes into effect on Jan. 1.
Without a federal law, technology companies, retailers, advertising firms and others dependent on collecting consumer data to track users and increase sales must adapt to the California law, potentially harming corporate profits over the long term.
The delay is a setback for companies ranging from Amazon and Facebook Inc. to Alphabet Inc.’s Google and retailers like Walmart Inc., who either directly collect shopper information to run their websites, or provide free services and derive revenues from advertising that relies on online data collection.
“This will be tremendously challenging ... companies need to really focus on complying with California now because there is not going to be a life raft from a federal level,” said Gary Kibel, a partner specializing in technology and privacy at law firm Davis & Gilbert.
While the sources, who are involved in the negotiations, still think it is possible at least one discussion draft of the bill could land before the year ends, congressional negotiators must still agree on whether it is adequate to simply ask consumers to consent to collection of personally identifiable information and give them the opportunity to opt out and how the new law would be enforced.
They are also negotiating how much information should be deemed private and where one should draw the line in terms of exchange of consumer information with third parties, the sources said. The effort to draft a federal bill is being led by Democratic Senators Richard Blumenthal, Brian Schatz and Maria Cantwell along with Republican Senators Jerry Moran, Commerce Committee chairman Roger Wicker and the Senate’s No.