The Secure Times

An online forum of the ABA Section of Antitrust Law's Privacy and Information Security Committee

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Federal Legislation Update

Although Congress appears preoccupied with other issues, there has been news regarding privacy legislation.  As noted previously on the blog, HR 2221 passed the House on December 8th.  The bill, with co-sponsors in both parties, has been referred to the Senate Commerce, Science and Transportation Committee.

Earlier this month, the primary comprehensive Senate privacy bill, S 1490 introduced by Sen. Leahy, received a cost estimate from the Congressional Budget Office.  The CBO found that the implementation costs for the bill, which includes a breach notice requirement, would likely exceed $139 million in at least one of its first five years after the effective date.  This scoring would result in the bill being labeled as an unfunded mandate on businesses, though the report found that  preemption of state laws on the subject would off-set some of the implementation costs.  The bill and a narrower breach notice bill, S 139, were approved by the Senate Judiciary Committee in November.  The CBO report found that implementation costs to government agencies covered by S 1490 likely would not exceed the $69 million threshold to be deemed an unfunded mandate.

The Chair of the House Energy and Commerce Committee’s Subcommittee on Communications, Technology and the Internet, Rep. Boucher, announced his intention to introduce a data privacy bill that would include additional opt-out and opt-in rights for consumers in the sharing of the consumer’s personal information.  Rep. Boucher stated that he is working with the subcommittee’s ranking member on a bill he hopes to introduce in early 2010.

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Maine Will See Retooled Bill on Protecting the Privacy of Minors

Maine’s Democratic state Senator Elizabeth Schneider is expected to introduce a revised bill aimed at protecting the online privacy of minors by the end of the month, Maine Public Broadcasting’s A.J. Higgins reports.

The federal Children’s Online Privacy Protection Act (COPPA) already protects the privacy of children under 13, but Schneider has expressed concern that COPPA does not do enough to protect all minors from marketing, particularly prescription-drug and health care product marketing on the web.

The new bill in the works will replace controversial legislation previously introduced by Schneider, signed into law and scheduled to enter into force in September 2009. The first bill, which proposed severe restrictions on marketing to anyone under the age of 18, was subject to a barrage of criticism and several legal challenges. Maine attorney general Janet Mills even declared that she would not enforce the law due to constitutional free speech concerns. (My colleague, Deborah Birnbach, and I covered those developments in a November article in Goodwin Procter’s Privacy & Data Security Advisory newsletter.)

As a result, Schneider has agreed to draft a more narrowly focused measure, with the specific goal of addressing medical information. It will be interesting to see how the new bill balances the protection of privacy with the free-speech concerns brought up by Mills and other critics. A public hearing on the new bill could be scheduled as early as next month, when the state legislature reconvenes.

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House Passes Financial Industry Reform Bill

On December 11, 2009, the House of Representatives passed a comprehensive financial industry reform bill, H.R. 4173, that would, among other measures, create a new financial oversight agency–the Consumer Financial Protection Agency (CFPA).  The legislation, passed by a vote of 223 to 202, consisted of multiple bills regarding financial industry practices, including portions of H.R. 3126, the Consumer Financial Protection Agency Act.  Under the new legislation, jurisdiction over consumer financial protection regulations, such as the Fair Credit Reporting Act and the Truth in Lending Act, would transfer from the Federal Trade Commission to the CFPA.  The Senate, which introduced similar financial reform draft legislation in November, is still debating how it will address financial industry reform.  More information regarding the financial reform legislation passed by the House can be found here.

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H.R. 2221–The Data Accountability and Trust Act Passes in the House

On December 8, 2009, the United States House of Representatives passed H.R. 2221, the Data Accountability and Trust Act.  The bill has now been referred to the Senate Committee on Commerce, Science, and Transportation.
H.R. 2221 would require an entity, which owns or possess personal consumer information, to enact data protection security policies and to notify individuals if a security breach occurs.  The Federal Trade Commission would be required to promulgate rules regarding data breach notification and protection standards.  The bill would also preempt similar state laws.

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FTC Holds Workshop on Journalism in the Internet Age

On December 1 and 2, the Federal Trade Commission held a workshop — "How Will Journalism Survive the Internet Age?" — exploring how the Internet has affected journalism and discussing a wide range of news-organization related issues, such as the economics of journalism in print and online, new business models for journalism online, and the ways in which journalism costs could be reduced while still maintaining quality. 
Commentators on this week’s workshop have noted that what was not discussed — notably behavioral advertising and other types of targeted online advertising — is as important as issues that were discussed.  Future regulation of consumer privacy and behavioral advertising is still unsettled as legislators and regulators debate the scope of potential privacy legislation and new rules or models that will regulate the industry.
Further debate on this topic is likely to continue at the Federal Trade Commission’s first Privacy Roundtable that will be held on Monday, December 7, at the Federal Trade Commission Conference Center in Washington, D.C.  A live webcast of this conference will be available at the FTC’s website. 

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IAB Launches Consumer Education Campaign About Behavioral Advertising

The Interactive Advertising Bureau (IAB), which is made up of media and technology companies that sell online advertising, recently launched a consumer education campaign about behavioral advertising.  The campaign uses online ads with eye-catching content such as "Advertising is Creepy."  The ads link to the IAB’s Privacy Matters page, which contains information about online advertising that is organized by categories such as: (1) Understanding Online Advertising; (2) How is My Online Privacy Protected?; (3) How Can I Protect Myself Online?; and (4) Understanding and Managing Cookies.
Online publishers are donating ad space for the campaign, and currently 500 million impressions have been promised.
Additional coverage of the campaign launch is available here.