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Congressmen float wide-reaching consumer data bill

US Reps. Rick Boucher (D-VA) and Cliff Stearns (R-FL) released on May 4 a discussion draft of legislation that would codify numerous industries’ use of consumer data on the web.

The draft, if eventually passed into law, would require companies that collect consumers’ personal information to disclose that they are doing so and explain how.

“In a nutshell, it would regulate the use, collection and sharing of publicly identifiable information of consumers by companies of all kinds,” said Kristen Mathews, partner and head of the privacy and data security group at law firm Proskauer. “It is essentially a generally applicable, federal-level privacy and data security law all in one. In the past, all we had on the federal level was industry specific or data-type specific laws.”

The discussion draft is not formal legislation. However, Boucher and Stearns, the chairman and ranking member, respectively, of the House Subcommittee on Communications, Technology and the Internet, could write legislation based on it.

The draft specifies that companies may collect information about consumers unless they opt out of the process. The legislation would also apply to cases when a website relies on services from a third party to effectuate a first-party transaction.

While no consent would be required to collect and use operational or transactional data, companies would need a consumer’s opt-in to knowingly collect sensitive information including medical information, financial accounts, Social Security numbers, sexual orientation, government identifiers and precise geographic information.

The Federal Trade Commission would adopt rules to implement and enforce the measure, according to the draft legislation.

The prospective legislation also has exceptions for third-party ad networks. Opt-out consent would apply to sharing of an individual’s information with a third-party ad network if there is a clear, easy–to-find link to a webpage for the network that allows a consumer to edit his profile or opt out of having one.

“Online advertising supports much of the commercial content, applications and services that are available on the Internet today without charge, and this legislation will not disrupt this well established and successful business model,” Boucher said in a statement.

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