Electronic Privacy Act Draft Released

11 May 2010 Publication

Legal News Alert: Privacy, Security & Information Management

Reps. Rick Boucher (D-Va.) and Cliff Stearns (R-Fla.), the Chairman and Ranking Member of the House Energy and Commerce’s Subcommittee on Communications, Technology and the Internet, released their draft bill to ensure the privacy of information about individuals both on the Internet and offline on May 3, 2010. Committee staff indicated the draft bill will become the subject of ongoing discussions with numerous stakeholders as the two members seek to refine and improve the bill. Comments will be wrapped-up by Friday, June 4, 2010.

The members’ aim with the legislation is to encourage greater levels of electronic commerce by providing to Internet users the assurance that their experience online will be more secure.

According to a summary issued by the members, the draft bill contains a number of important provisions to change current law, including:

New disclosure of privacy practices: Any company collecting a user’s “personally identifiable information” must conspicuously display a “clearly written, understandable privacy policy that explains how information about individuals is collected, used, and disclosed.”

Changes to collection and use of information: Currently, companies may collect information about users from the Internet unless an individual affirmatively opts out of that collection at the outset. Opt-out consent also applies when a Web site relies upon services delivered by another party to effectuate a first-party transaction such as the serving of ads on that Web site.

Under the proposal, companies will instead need a user’s express opt-in consent to knowingly collect sensitive information about them, including such sensitive information relating to a user’s medical records, financial accounts, Social Security Number, government-issued identification, and precise geographic location information.

New disclosure of information to unaffiliated parties: The proposal addresses concerns about the practice of third-party advertisers who collect information about users and then build a profile and target ads based on that profile.  The draft would create an exception to the opt-in consent requirement for third-party information sharing by applying “opt-out consent” to the sharing of an individual’s information with third-party advertisers’ network.  The bill would require companies to provide a “clear, easy-to-find link to a Web page for the ad network” that allows a user to edit his or her profile, and if he so chooses, to opt out of having a profile created, provided that the ad network does not share the user’s information with anyone else.

FTC implementation and enforcement: The FTC would adopt rules to implement and enforce the measure. States also may enforce the FTC’s rules through state attorneys general or state consumer protection agencies.

With the issue of Internet privacy cropping up in the news on a regular basis, Reps. Boucher and Stearns have responded and put up a draft that they hope to refine and improve through conversations with a wide range of stakeholders. The time is now for interested parties to begin working with the members and committee staff to address any specific concerns they have with the draft.

Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and our colleagues. If you have any questions about this update or would like to discuss this topic further, please contact your Foley attorney or the following:

Philip G. Kiko
Of Counsel
Washington, D.C.

Robert C. Geist, Jr.
Public Affairs Director
Washington, D.C.