Data Privacy and the Tech Sector – What’s Next?

Information security and data privacy have Washington’s attention following major security breaches – new rules could be forthcoming

New federal regulations on how much control consumers have over their personal data – and how this data is used by companies – have the potential to shake up a cross-section of business sectors in the years ahead.

Digital alarm bells
It seems that cybersecurity issues – including data privacy – have finally got the attention of Washington. This is likely due in part to the slew of headline-generating data breaches that occurred in 2018 across a breadth of well-known companies, including Facebook, Google, Twitter, and Marriot. Moreover, the European Union’s General Data Protection Regulation (GDPR), which debuted in May 2018, has helped to raise awareness of data privacy issues among US consumers, business leaders, and legislators. The GDPR stipulates policies on “right of access” – allowing consumer to access their personal data and details about how it is used – and “right of erasure” – the right of consumers to request that their personal data be removed within 30 days.

California rules
California passed a new state law on digital privacy in June 2018 that gives consumers the ability to prevent companies from sharing or selling their data. The law, which will technically apply only to California residents, will go into effect in January 2020. Some critics say the law is likely to have implications beyond the state, arguing that companies will have to make sweeping adjustments to their technology and business practices in order to comply. It is possible that legislators and business leaders will work to make adjustments to the law prior to its implementation date.

The tech sector’s take
Tech companies are supportive of modernizing consumer-privacy standards. They are seeking a national framework, that can be applied consistently to companies both big and small. This includes improved transparency around how personal information is collected, how it might be shared, and why. They also want to provide consumers with the ability to request that their personal information be deleted. Tech companies want to insure that any new federal regulation or legislation meets appropriate consumer-privacy standards, while fostering continued innovation and economic growth in the digital realm.

The national data privacy debate
Creating new federal regulations on data privacy is an idea that is supported by both Democratic and Republican legislators in Congress and discussions around potential federal regulations are ongoing. There appears to be general agreement that companies should be held accountable for managing consumer data both fairly and transparently. The Senate Commerce Committee has discussed a bill that would cover all businesses, regardless of industry. The Senate Committee on Banking, Housing, and Urban Affairs has suggested that data privacy regulation be broken down by industry and regulated by the equivalent industry agency.

Because different industries use different kinds of consumer data in different ways, a one-size-fits-all regulation is likely impractical. However, developing industry-specific regulations will also prove challenging. Legislators will have to balance the wish lists of both businesses and consumers. Whether or not any new legislation on data privacy can be passed in 2019, well, that remains to be seen. Important questions remain about what form will any new rule take. Will federal rules supersede state rules? Will we see one broad data privacy bill or industry-specific bills? In answering these questions, legislators will be tasked with navigating a middle path between ample consumer privacy protections and nurturing growth and innovation in the digital ecosystem. We can expect to see several hearings and roundtables in the months ahead, conducted by the House, the Senate, and the regulatory agencies.

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