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Rep. Bobby Rush (D-Illinois) introduced a federal privacy bill called the Best Practices Act (HR 5777). This bill is similar to the Boucher proposal introduced in May by Rep. Rick Boucher and Rep. Cliff Stearns in that it would regulate the online and offline collection, use and disclosure of covered information and would regulate behavioral advertising. (We summarized the Boucher proposal in an earlier Alert.) It is too early to tell whether either proposal will be enacted into law, but it appears Congress is likely to address in the near-term consumer privacy and both of these bills if enacted could significantly impact many companies' privacy practices.
HR 5777 differs from the Boucher proposal by including a private right of action and punitive damages, civil penalties up to $5 million, a safe harbor program, partial preemption of state laws, and vast new rulemaking authority for the FTC.
As part of the proposed safe harbor, companies that participate in and comply with FTC-approved self regulatory programs would not be subject to (1) liability for a private right of action, or (2) the express affirmative consent requirement for disclosing covered information to third parties.
The House Subcommittee on Commerce, Trade, and Consumer Protection held a legislative hearing on these privacy proposals on July 22. A briefing memo and text of prepared testimony by the FTC's David Vladeck, consumer protection groups, and the U.S. Chamber of Commerce, among others, are on the Subcommittee's webpage.
In May, Rep. Boucher asked for comments on his proposal, but so far he has not issued a revised proposal or formally introduced a bill in Congress. Congress is scheduled to adjourn from August 9 - September 9 for its summer recess. We will keep you up to date on the development of both of these measures.
This client alert is a publication of Loeb & Loeb LLP and is intended to provide information on recent legal developments. This client alert does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations. For more information, please contact a member of Loeb & Loeb's Advanced Media and Technology Group.
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