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Colorado and Virginia Lead In Consumer Privacy Legislation, Still Need Federal Law, Conference Hears

Both states join California as the only ones with comprehensive privacy laws, but experts say a federal bill should fill the regulatory void.

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Stacey Gray, senior counsel at the Future of Privacy Forum.

WASHINGTON, November 30, 2021 – Amid the lack of comprehensive privacy law at the federal level, states across the nation join California to take privacy matters into their own hands.

California was the first state to adopt privacy legislation with its California Consumer Privacy Act (CCPA) in 2018, followed by the California Privacy Rights Act of 2020 (CPRA). In 2021, Virginia and Colorado enacted their own privacy laws, which will go into effect in 2023.

At the Federal Communications Bar Association’s annual privacy symposium on November 16, privacy experts celebrated Colorado’s and Virginia’s progress amid an industry-wide push for a comprehensive federal privacy law.

Virginia’s and Colorado’s privacy laws align with California’s CPRA by applying many of CPRA’s concepts: the scope of data covered by the law is the same, and all states impose data use restrictions that limit a company’s ability to analyze and share consumers’ personal information.

Further, all states impose affirmative duties on data processing entities. Colorado’s privacy law, however, sets itself apart by using a heightened standard for businesses to obtain a customer’s agreement to process their personal data. Colorado’s attorney general also has broad policy-making authority in the bill, making Colorado’s attorney general an effective state enforcement regime.

Drawbacks to piecemeal legislation

Despite the relative uniformity between the three states’ legislation, privacy experts agree that widely differing privacy frameworks sets the industry up for a messy regulatory compliance landscape.

Stacey Gray, senior counsel at the Future of Privacy Forum, said a lack of interoperability makes compliance across multiple states more difficult. “This is a huge issue with three states with different frameworks,” she said. “Lawmakers are getting a big push not to regulate differently or creating direct conflict with different states. That’s why [the] other proposals have similar basic language and features.”

Gray also pointed to differing frameworks for service opt-in and opt-out models as another point of tension. “We should explore what Colorado and California have done, which is include a global opt-out for browsers or internet plug-ins that communicates [opting out] to every company in the ecosystem of a person’s data,” she added.

Although Gray said she believes that a federal privacy bill is the best way to develop a national standard, she sees growing state interest as an inevitable product of growing data harms affecting consumers.

“It really started in the past few years and is snowballing,” she said. “Between the passage of the European Union’s General Data Protection Regulation, the Cambridge Analytica scandal, California’s law in 2018, some federal momentum, and the role of the media…there’s been an increasing state interest in these issues. There’s a motivation to protection residents in their own states.”

Federal privacy law is still best

Consumer privacy bills were considered in 26 states this year, and only Colorado and Virginia made it past the finish line. As lawmakers are getting ready for sessions in early 2022, stakeholders are preparing to push for greater privacy legislation across the nation regardless of any federal action. ‘’

Gray argues that a federal law would be the best authority for a nationwide privacy standard. “The federal standard would be ideal,” Gray said. If there is no action on the federal level and we’re left with the states, then states should continue enacting privacy laws, she said. “But we should tackle this at the federal level to get a standard that applies nationwide. We already have hundreds of privacy laws in various sectors that supplement HIPAA, students and privacy, and even long-standing narrow laws like paparazzi and school records,” so more state laws could be hard for businesses and entities to navigate and comply.

Still, there may be benefits to testing privacy laws on the state level before enforcing the legislation nationwide. “States are the laboratory for democracy,” said Ryan Kriger, assistant attorney general in Vermont’s attorney general public protection division.

“We have three laws in the books now to look at,” Kriger added. “It’s a huge benefit for states to test things out and see how things work, as well as finding ways to make an existing law better by applying it to the states.”

Robocall

Public Knowledge Urges VoIP to Be Regulated Under Title II to Stop Robocalls

Title II would require VoIP services to be subject to stronger regulations already in place for telecommunication providers.

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Photo of Harold Feld, Senior Vice President of Public Knowledge

WASHINGTON, August 18, 2022 – Public Knowledge is asking the Federal Communications Commission to classify facilities-based voice over Internet protocol services under Title II of the 1934 Communications Act, which it said would help the commission tackle robocalls.

The non-profit public interest group last week amended a March petition to the agency narrowing the field of VoIP providers to be captured under its proposal to facilities-based interconnected VoIP services, which require a broadband connection for real-time voice communications on the public telephone network. That’s instead of a broader field including non-interconnected services, which allow voice communications through a device not connected to the phone network, like gaming consoles.

Title II specifies authority given to the FCC to regulate “common carriers” – utilities such as landline phones, telecommunication services, and electricity. Currently, VoIP services are not included in any specific classification. Instead, the FCC relies on rules based on its ancillary authority given under Title I of the Communications Act, which provides less regulatory authority to the commission.

If classified under Title II, VoIP providers would be beholden to service quality regulations, such as the prevention of ever-increasing robocalls, and to regulations ensuring affordable access to infrastructure for competitive carriers, Public Knowledge said in its petition.

The organization also said that new categorization would prevent a “crisis of legal authority” for the FCC, which already makes VoIP services subject to certain Title II regulations, such as contributions to the basic telecommunications program, the Universal Service Fund. Currently, Public Knowledge argues, regulations governing VoIP services are a collection of ad hoc rulings based on ancillary authority.

Lack of classification ‘threatens’ FCC ability to fulfill legislative mandate

Congress “deliberately used expansive terms” when defining telecommunications in the Telecommunications Act of 1996, which gave the FCC authority to regulate sectors within the communications industry, said the March petition. “At a minimum, Congress intended the FCC to regulate any service that behaves like a traditional telephone service – regardless of the underlying technology – as a telecommunications service,” read the petition.

Yet despite a lack of meaningful difference between VoIP and traditional telephone services, the FCC continues to treat VoIP services differently, said the petition. This “failure” of the FCC to classify VoIP under Title II allegedly frustrates the commission’s ability to effectively address robocalls and makes uncertain whether the commission preempted its authority to regulate VoIP services.

“The FCC’s failure to classify facilities-based interconnected VoIP threatens the ability of the FCC to fulfill the most basic responsibilities entrusted to it by Congress,” stated the petition.

The burden of Title II

In a blog post on the matter, communications law firm CommLaw group argued that Title II VoIP providers would likely be required to obtain FCC approval prior to transfers of assets and mergers and acquisitions, which it said would slow transaction speed considerably. Furthermore, it could open the door to “increased state regulatory oversight, requirements, and burdens,” it added.

Earlier this month, Democratic Senators introduced a bill that would give the FCC regulatory authority over broadband by classifying those services as Title II. It would allow the commission greater regulatory authority to make internet service providers respect principles of net neutrality, which prohibit providers from throttling traffic on their networks, participating in paid prioritization, or blocking of any lawful content. The bill, however, has been met with opposition.

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Privacy

Online Protections for Children Bill Passes Committee Despite Concern over FTC Authority

Opposition to a reformed COPPA include the ability of the FTC to enact broad rule-making.

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Photo of Senator Edward Markey, D-Mass.

WASHINGTON, July 28, 2022 – The Senate Committee on Commerce, Science and Transportation approved two online privacy protection bills in a Wednesday markup, including an update to legislation that will increase the age for online protection for children.

An update to the Children and Teens’ Online Privacy and Protection Act (S.1628) – which originally passed in 1998 but had amendments proposed last May – would see the age of protections increase from 13 to 15, meaning large internet companies will be prohibited from collecting the personal information of anyone under 16 without consent and ban targeted marketing to those children. The bill passed via voice vote.

Other provisions in the bill include a mandate to create an online “eraser button” that will allow users to eliminate personal information of a child or teen; implement a “Digital Marketing Bill of Rights for Minors” that limits the collection of personal information from young users; and establish a first-of-its-kind Youth Privacy and Marketing Division at the FTC,” according to a summary of the bill’s key components.

“The Senate Commerce Committee this morning took a historic step towards stopping Big Tech’s predatory behavior from harming kids every day,” Senator Edward Markey, D-Mass., who introduced the amendments, said Wednesday.

The other bill, the Kids Online Safety Act (S.3663), will give parents enhanced control over their children’s online activities to “better protect their health and well-being.” The bill, introduced by Senator Richard Blumenthal, D-CT, and Senator Marsha Blackburn, R-TN, passed 28-0.

The bill would put in place additional safeguards and tools, such as platforms giving minors options to protect their personal information and to disable recommendations.

“I don’t think we’ve ever had a piece of legislation that has had such strong support across groups across the country” “Parents want a tool kit to protect their children online,” Senator Blumenthal said during Wednesday’s hearing.

The bills now move to the Senate floor.

Concern about FTC authority under new COPPA

Under COPPA 2.0, the FTC authority includes determining what are “unfair or deceptive acts” in marketing practices and enforcing violations. In May, the agency put out a policy statement specifying its focus on enforcing the existing version of the bill.

Some senators voted against passing COPPA 2.0 over concern that it would give the Federal Trade Commission too much rule-making authority.

Senator Blackburn said there should be more restrictions on the ability of the FTC to make rules so there wouldn’t be overreach.

Similarly, Senator Mike Lee, R-UT, said he was not able to support the bill during markup because he is concerned about “giving a blanket ruling power to the FTC.

“We are at our best when we carefully consider legislation and don’t rush through it,” Lee said.

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Cybersecurity

Rep. Swalwell Says App Preference Bill Will Harm National Security

‘I just want to limit the ability for any bad actor to get into your device.’

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Photo of Representative Eric Swalwell, D-Calif.

July 27, 2022 – Antitrust legislation that would restrict the preferential treatment of certain apps on platforms would harm national security by making more visible apps from hostile nations, claimed Representative Eric Swalwell, D-Calif, at a Punchbowl News event Wednesday.

The American Innovation and Choice Online Act is currently under review by the Senate and, if passed, would prohibit certain online platforms from unfairly preferencing products, limiting another business’ ability to operate on a platform, or discriminating against competing products and services.

The legislation would ban Apple and Google from preferencing their own first-party apps on their app stores, which would make it easier for apps disseminated from hostile nations to be seen on the online stores, Swalwell said.

“[Russia and China] could flood the app store with apps that can vacuum up consumer data and send it back to China,” said Swalwell, adding that disinformation regarding American elections would spread. “Until these security concerns are addressed, we should really pump the breaks on this.”

Swalwell asked for a hearing conducted by Judiciary Committee of the House with the National Security Agency, Federal Bureau of Investigation, and Homeland Security officials to lay out what the bill would mean for national security.

“I just want to limit the ability for any bad actor to get into your device, whether you’re an individual or small business,” said Swalwell.

Lawmakers have become increasingly concerned about China’s access to American data through popular video-sharing apps, such as TikTok. Last month, Federal Communications Commissioner Brendan Carr called for Apple and Google to remove the app on the grounds that the app’s parent company, ByteDance, is “beholden” to the Communist government in China and required to comply with “surveillance demands.”

The comments follow debate surrounding the bill, which was introduced to the Senate on May 2 by Sen. Amy Klobuchar, D-Minn., on how it would affect small businesses and American competitiveness globally.

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