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It’s time for privacy legislation in the United States (again)

Kenneth Propp / Feb 2023

Image: Shutterstock

 

On February 7, during the annual State of the Union address, U.S. President Joe Biden proclaimed that “It’s time to pass bipartisan legislation to stop Big Tech from collecting personal data on kids and teenagers online, ban targeted advertising to children, and impose stricter limits on the personal data that companies collect on all of us.” The Congressional audience responded with a bipartisan ovation.

Of course, this is not the first time Biden’s State of the Union address has urged increased consumer privacy protection. In 2022, he called for children’s privacy legislation. It died in the Congress that expired at the end of last year.

So is there reason to believe that 2023 will be the year that the new Congress at last enacts comprehensive privacy legislation as well as measures regulating digital platforms? Will the United States finally move in the direction of the ambitious slew of digital regulatory measures steadily being adopted by the European Union? Or is this just another false dawn?

There’s a widespread -- but mistaken -- belief in Brussels that the United States lacks any serious privacy protections. In 1974, for example, Richard Nixon, then in the throes of contesting Watergate allegations that he had spied on his political opponents, called for federal legislation creating individual rights with respect to government-held data on individuals. Congress responded later that year – after Nixon had resigned the Presidency in disgrace – by passing the Privacy Act. And over the past half-century, the United States has steadily adopted a series of sectoral privacy laws, governing financial and medical personal data among other types. But it remains the case that there is no counterpart in U.S. law for the EU’s General Data Protection Regulation (GDPR), with its strict regime for the collection, use and retention of personal data.

The President accompanied his latest call for technology legislation with the release of a White House fact sheet containing additional detail. It urges greater transparency about what personal data companies collect, use and transfer, as well as about the algorithms they use in targeted advertising. Biden previewed his State of the Union remarks in a Wall Street Journal op-ed published shortly beforehand. The op-ed additionally called for antitrust legislation aimed at large platform providers – but Biden remained silent on that topic when he spoke to Congress.

After the State of the Union address, key Republicans expressed skepticism that the White House would make a serious push for the new measures cited by the President. Cathy McMorris Rodgers (R-Wash.), new chair of the House of Representatives Energy and Commerce Committee, noted that the President had not explicitly endorsed comprehensive privacy legislation in the form of the American Data Privacy and Protection Act (ADPPA), which had passed her committee with bipartisan support in 2022. Then-House Speaker Nancy Pelosi, supported by other influential California and Washington State Democrats, had declined to allow the full House to vote on the measure, believing certain aspects of it to be too weak. Colorado Republican Congressman Ken Buck, a leading member of the House Judiciary Committee who had pushed for platform antitrust legislation during the last Congress, grumbled that Biden’s new initiative was “too little, too late.”

The President’s timing is indeed open to question. The White House did not engage forcefully on privacy or platform regulatory measures during the 2021-22 Congress, when the Democrats enjoyed narrow majorities in both houses. Now that the Republicans control of the House of Representatives, the White House will have to work all the harder to achieve bipartisan support in the ever more vituperative halls of Congress.  Reaching out through the business-oriented readership of the Wall Street Journal was an encouraging sign of the Administration’s intentions, Cameron Kerry of the Brookings Institution has pointed out. The likeliest area of compromise remains protecting children’s privacy against the business practices of platform giants. Comprehensive privacy legislation will be more difficult, since the ADPPA’s hard-fought compromises over preempting state privacy laws and enabling limited individual rights of action almost certainly will be reopened in committee. Competition measures of the sorts advocated by Senator Amy Klobuchar (D-Minn.) and Representative Buck remain a long shot.

The contrast between Washington’s glacial pace on digital initiatives and the EU’s steadily advancing legislative program remains glaring. Brussels’ feat of adopting in one year regulations on both platform competition Digital and content moderation, the Digital Markets Act (DMA) and the Digital Services Act (DSA), will not be matched in the United States. Even if Congress can agree on a comprehensive privacy protection measure like the ADPPA, it will have a much more limited global exemplary impact than the GDPR has had.

In truth, transatlantic economic relations would be healthier if Washington were less paralyzed by technology regulation. The GDPR, for all the European Commission’s triumphalism about it becoming a global standard, has turned out to have some serious problems. Its enforcement machinery is slow and contentious, and already in need of legislative remedy. In addition, the GDPR’s strict limits on reusing data and its precautionary approach toward risk could constrain the development of artificial intelligence technologies which depend on access to broad data pools, observers have pointed out. A comprehensive U.S. privacy law conceivably could better accommodate the fast-evolving applications of AI.

Washington’s difficulty in enacting forward-looking legislation also holds back efforts to find common transatlantic technology approaches. If the United States were to adopt comprehensive privacy legislation, the chances of the new EU-US Data Privacy Framework surviving an anticipated challenge at the Court of Justice of the European Union would improve significantly. Conversely, the prospects for using the EU-US Trade and Technology Council as a vehicle to align U.S. and European positions on shared concerns about platform transparency are handicapped by Congressional Republicans’ belief that platforms unduly censor conservative views.

Still, there is reason to hope for a modicum of legislative success in Washington in the new Congress. After guiding signature infrastructure and climate change legislation through the last Congress, the Biden Administration may have more energy for measures focusing on the internet economy. And that in turn could give a boost to stuttering efforts towards a degree of transatlantic commonality on technology regulatory challenges.

 

Kenneth Propp

Kenneth Propp

February 2023

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