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.”