WASHINGTON (Reuters) – U.S. online-privacy bill will not come before the Congress this year, three sources said, as lawmakers failed to agree on issues such as the question of whether the bill should be in place by the state and the companies are forced to deal with a lot of strict regulations in California which goes into effect on Jan. 1.
The logo of Amazon is seen at the company’s distribution centre in Boves, France, on January 19, 2019. REUTERS/Pascal Rossignol
Without a federal law, technology companies, retailers, advertising companies, and others subject to the collection of consumer data in order to track and increase sales, must conform to the laws of California, there may be adverse consequences for the profits of the companies in the long run.
The delay is a setback for the companies, ranging from Amazon (AMZN.(O) and Facebook Inc (FB.D) of Alphabet, Inc. ‘ s (GOOGL.D) Google and its licensors, and retailers, such as Walmart Inc. (WMT.(N)>, which is either to gather shopper information on their web sites, or the provision of services free of charge, and the deduction of the revenue generated from advertising, which is based on the online data collection and usage.
“This is going to be huge and challenging… do we have to really focus on the compliance of the California’s, for it is a life raft on a federal level,” Gary Kibel, a partner who specializes in technology and privacy at the law firm of Davis & Gilbert.
While the sources involved in the negotiations, so that it is possible to, at least, a discussion draft of the bill could be in the country before the year ends, congressional negotiators still need to agree on the question of whether it will be enough to just ask consumers for permission to collect personally identifiable information, and to provide them with the opportunity to opt-out, and how the new law will be applied.
They are also negotiating about the amount of information that needs to be considered to be private, and where you have to draw the line in terms of the sharing of consumer information with third parties, the sources said.
The effort to draft a federal law that is guided by Democratic Senators, Richard Blumenthal, Brian Schatz, and Maria Cantwell, along with Republican Senators-Jerry Moran, Finance Committee chairman, and Roger Wicker, and the Senate’s No. 2 Republican, John Thune. Two of the sources said, Senators Blumenthal and Moran, the staff are working on the federal government’s proposed bill and is expected to release a draft by the end of the year. One of the sources said a draft of the House version of the bill could be in the country within the next few weeks.
California’s data privacy law in effect in a large company, with an on-line presence, and demands, that the companies with the details of more than 50,000 people, in order to allow consumers to get the information that they have collected. Also, consumers are able to request removal of personal information, and to opt-out of having the information sold to third parties. Each violation carries a $7,500 fine. The companies are also waiting for the attorney-general, the roll-out of regulations related to the law in the usa.
As it is, it is only intended to protect the California consumer, it is not known whether or not the companies their business practices, and to work with a set of rules governing the most populous state in the u.s., and the existing rules for the other 49 states as well. “Spain will go into effect without Congress doing anything in the federal bill,” said a source with direct knowledge of the matter, and who does not wish to be named, and is pushing for a federal privacy bill.
“This is a big problem, because of the business and the impact it will have,” the source said. Facebook did not respond to a request for comment. Google and Amazon declined to comment. President & CEO, Michael Beckerman of the Internet Association, which counts Amazon, Facebook, Google, and Microsoft as its members, said in a statement that there has been a broad consensus among the political parties for federal legislation and called on Congress to act on this now. Walmart has no comment and referred Reuters to the Retail Industry Leaders Association (RILA). Nicholas Ahrens, vice-president of the VILLA, which has Walmart as a member, said the group will continue to work with the Congress in the direction of a federal law, and is hopeful a bipartisan solution can be reached. In spite of the instantaneous time delay, the privacy bill is one of the few laws which many of the lobby groups believe it still has a good chance of the law, as it is a political interest and not to cost the taxpayers money.
Reporting by Nandita Bose and Diane Bartz in Washington, Additional reporting by David Shepardson in Washington, Editing by Chris Sanders and Angus MacSwan