Compliance Management, Incident Response, Privacy, TDR

New consumer privacy bill introduced in the U.S. House

A U.S. House of Representatives subcommittee on Thursday discussed a bill that would govern the collection, use and dissemination of consumer information and impose fines to violators of up to $5 million.

The Best Practices Act of 2010 was introduced on Monday by Rep. Bobby Rush, D-Ill., chairman of the House Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection.

The bill is meant to “foster transparency about the commercial use of personal information and provide consumers with meaningful choice about the collection, use and disclosure of such information,” according to a memo about the legislation.

The proposed measure comes on the heels of a similar discussion draft released last month by U.S. Reps Rick Boucher, D-Va. and Cliff Stearns, R-Fla.

Both pieces of legislation were expected to be discussed during Thursday's hearing.

Rush's bill would require any person engaged in interstate commerce, who collects or stores data containing personal information of consumers, to provide information about the entity's privacy practices, including a description of the information being collected and the purpose of collection. Additionally, the legislation would mandate that consumers be given the ability to opt-out of the collection.

The legislation, however, provides an exemption for certain small businesses and the government.

The bill, which would grant enforcement authority to the Federal Trade Commission (FTC), also requires entities to obtain consent before collecting, using or disclosing “sensitive” records, which is comprised of medical history, financial data, race, ethnicity, biometric information, or Social Security number.

Rush's bill so far has garnered mixed reviews.

The Center for Democracy and Technology (CDT), a nonprofit public interest organization, said in a statement that it supports the proposal.

"The Rush bill establishes a forward-looking and flexible framework for protecting consumer privacy," Leslie Harris, the organization's president, said in a statement. "It builds on the sound privacy principles set out in Rep. Boucher's earlier draft and provides the robust set of fair information practices that CDT has called for."

However, The Competitive Enterprise Institute (CEI), a Washington, D.C. think tank, has said the legislation would actually undermine privacy technologies.

“Today, businesses increasingly compete to deliver technologies that enhance our privacy and security,” Wayne Crews, CEI's vice president of policy, said in a statement. "At the same time, information sharing enables firms to sell us the things we want. This seeming tension is perfectly natural — privacy is a complex relationship that varies from person to person, not a ‘thing' for governments to specify for anyone beforehand.”

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