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Experts Warn Against Private Right to Action Laws on Data Privacy Day

If laws are robust enough and enforcement agencies are well-resourced, states should avoid implementing right to privacy action legislation.

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Jessica Rich speaking at a 2015 AdExchanger event while serving as director of the Bureau of Consumer Protection at the FTC. Photo from AdExchanger.

WASHINGTON, January 31, 2022 – Experts gathered virtually on Data Privacy Day on Thursday to revisit strategies to best hold companies accountable for the information they collect on their users.

Much of the conversations that took place on Thursday centered on the private right of action – whereby private citizens can legally pursue companies in lieu of government action. Though some experts view the practice favorably, most speakers were hesitant to support it.

“[Private right of action] has historically been used as a tool to harass businesses and create opportunities for frivolous claims,” ACT state policy associate Caleb Williamson said during a panel with the Information Technology Innovation Foundation. ACT is a trade organization that represents thousands of small tech companies and app makers.

Carl Holshouser, TechNet vice president for operations and strategic initiatives, pointed out that though the spirit of enabling private right to action may be to target big tech companies, small businesses are often caught in the crossfire and are the ones that get left paying the price. TechNet is a network of technology executives with the goal of promoting growth and innovation in the tech sector.

He acknowledged that while there can be benefits to right to action laws, they have resulted in more harm than good. “We all agree that where there is malfeasance and bad actors and consumers are harmed, there needs to be a mechanism with which to deal with that,” Holshouser said.

“But a wide private right of action leads to something that we have seen with the California privacy law. Since [2020], when it was enacted, there have been nearly 200 lawsuits that have been brought against companies who do business in California digitally but are looking at somewhere else that are mostly small businesses,” Holshouser added.

“Now, imagine if you’re a smaller startup that is in Kansas and your website reaches California. Here comes a lawyer that is suing you and says there is malfeasance, and you need to be sued and there has to be a settlement,” Holshouser continued. “This is a chilling effect on innovation and on small businesses that shows you why private right of action is too far.”

Private right of action alternatives

During an R Street event on Thursday, Jessica Rich, former Federal Trade Commission director of the Bureau of Consumer Protection, enumerated a list of items that should be employed as an alternative to right of action laws.

“If a law is strong enough in its provisions – in terms of protecting consumers plus the FTC is given adequate enforcement authority and resources plus the state and [attorneys general] can enforce that [law] – maybe you are making it less necessary to have a private right of action,” Rich said.

“Another solution that I am seeing in some legislation is that in addition to state agencies being able to enforce the law, other agencies in the state with jurisdiction over privacy,” Rich continued. “[They] could enforce the law, which could include more local agencies, and as long as they’re enforcing those same laws and the same standards, there could be that could even cover the field even more without me for a private right of action.”

Reporter Ben Kahn is a graduate of University of Baltimore and the National Journalism Center. His work has appeared in Broadband Breakfast, Washington Jewish Week, and The Center Square, among other publications. He primarily covers Big Tech and spectrum policy.

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Robocall

Lawmakers, FCC Take More Action Against Illegal Robocallers

There are new proposed rules that offer legal protections to those aiding in enforcement efforts against illegal robocalls.

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Rep. Bob Latta, the primary sponsor of the Robocall Trace Back Enhancement Act

WASHINGTON, April 27, 2022 – Regulators and legislators in Washington continued their efforts to curb unlawful telephony use with proposed rules designed to crack down robocalls.

On Wednesday, Rep. Bob Latta, R-Ohio, introduced the Robocall Trace Back Enhancement Act – an amendment to the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act.

If signed into law, the bill would provide legal immunity for a broad range of entities engaging in private efforts to track, surveil, and report on illegal robocalling scams.

The protected parties include registered consortiums that handle call receiving, sharing, and publishing and all voice service providers and any informants that share covered information.

It would also grant the Federal Communications Commission jurisdiction to take enforcement actions based on the information collected during the aforementioned activities.

FCC measures on cease-and-desist letters

In addition to this legislation, as part of her agenda to combat scam calls, on April 26 FCC Chairwoman Jessica Rosenworcel proposed closing a loophole to the STIR/SHAKEN regime afforded to small telcos.

Most telcos are required to adhere to cease-and-desist orders regarding illegal spam-calls and generally comply with actions taken by the FCC. The loophole in question gave smaller telcos greater latitude in how they chose to respond to FCC requests.

If adopted, the proposed regulation would require small telcos to abide by cease-and-desist orders, participate in robocall mitigation, cooperate with FCC enforcement, and take responsibility for facilitating illegal robocall traffic.

“International robocallers use these gateways to enter our phone networks and defraud American consumers,” Rosenworcel said in a statement, “We won’t allow them to bypass our laws and hide from enforcement.”

The new rule will be voted on at the FCC’s open meeting on May 19.

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Privacy

Federal Privacy Legislation Needed As State Legislation Could Harm Smaller Players, Event Hears

Different state privacy laws stifle competition and places burdens on small companies, experts say.

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Maneesha Mithal (far-left), Sara Collins (middle-left), Lartease Tiffith (middle-right), Brandon Pugh (far-right) on stage at "Beyond the Basics: The Many Pillars of a U.S. Privacy Law"

WASHINGTON, April 25, 2022 – While experts agreed that federal legislators need to take action on comprehensive privacy legislation, they disagreed on the specifics of how such regulation should be enforced.

Though some states have begun to establish their own frameworks for consumer privacy regulation, each framework puts forth different standards that online platforms would have to adhere to. These varied frameworks have raised concerns among many experts who consider a patchwork of legislation to raise the bar of compliance – a bar that could be lowered by federal legislation.

During an R Street panel on Monday, experts from the technology industry weighed in on the matter with their perspectives.

In March, Utah joined  California, Colorado, and Virginia and became the fourth state to successfully pass consumer privacy legislation. Several additional states, including Florida, Massachusetts, New York, and Connecticut have experienced mixed success with their bills and have not yet signed anything into law.

Lartease Tiffith, executive vice president for public policy at the Interactive Advertising Bureau, said that the US is an outlier among developed countries. “We are one of the few developed countries that [does not have a federal privacy law],” he said. “I think that in order to reflect the same common values as our colleagues who are in Europe and elsewhere around the world, we need [to make] one.”

Beyond the international perspective, Tiffith also emphasized domestic justifications for federal legislation. “I cannot think of a subject matter that is not more under the purview of Congress than interstate commerce,” he said. “The internet is everywhere – it is not limited by borders. So, we need to have one standard, one set of laws. It should not matter where you live – California, Utah, Virginia, Colorado – you should have the same basic privacy rights as anyone, anywhere.”

Various state legislation harder for smaller companies

Tiffith also explained that a patchwork of regulation would hit smaller businesses the hardest. “If you are a small or medium sized business and you are looking at investing more money into your products and service and delivering and reaching customers – you want to do that rather than spending time on hiring more lawyers to deal with ever complicating regulations.

“We need this for the next set of Amazons and Googles of the world to exists,” he said.

While the panelists were able to agree on the fact that current patchwork of laws is not sustainable, they did not agree on how to enforce a federal framework.

A federal body for consumer data protection

Sara Collins, senior policy counsel for internet advocacy group Public Knowledge, voiced benefits to creating a new data protection authority in the US – a body distinct from the Federal Trade Commission – that would focus expressly on matters related to consumer data protection.

Tiffith pushed back, however, arguing that the FTC already does a good job at handling these issues, and is only held back by what he views as under-resourcing. “If you compare the FTC to other protection authorities, they are very under-resourced,” he said. “So, I think instead of us standing up a whole new data protection authority, I think instead, let’s invest that money in the FTC, give them some rules, some limited rulemaking authority, and let’s give them a lot more staff and a lot more money.

“Let them be the cop on the beat,” he said.

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Robocall

FCC Announces Majority of States Now Signed Onto Robocall Investigation Partnership

The FCC signed on five states this month and seven last month.

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Illustration from C-Zentrix

WASHINGTON, April 7, 2022 – The Federal Communications Commission said Thursday it has partnered with further five more state attorneys general to combat illegal robocalls.

The agency said Thursday it had signed on Alaska, California, Tennessee, Pennsylvania and Washington state to investigate the robocalls, which can lead to scams. Thursday’s news comes on the heels of a March 28 announcement, when the agency said it signed similar memorandum of understanding with Connecticut, the District of Columbia, Idaho, Kentucky, Minnesota, New Jersey, and Wyoming.

Altogether, the agency, which announced the federal-state partnership effort in February, said it has signed on the majority of the United States.

“It shows that we are united when it comes to fighting robocalls—urban, rural, north, south, east, and west,” said FCC Chairwoman Jessica Rosenworcel. “Today I invite every state and U.S. territory to join this effort and establish information sharing and cooperation structures with the FCC so we can work together to investigate and put an end to spoofing and robocall scam campaigns.”

The agency, which has made fighting illegal robocalls a key mandate, has previously credited states with catching those that allow robocalls.

Earlier this month, the FCC credited the North Carolina Department of Justice in an investigation that identified thinQ Technologies as a “facilitator” of robocalls. The agency, which is working with the Traceback Consortium to identify the culprits, has already sent more than a dozen cease and desist letters to those it has identified in investigations.

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