Federal privacy legislation shows signs of life in House

House Energy & Commerce Committee staff have negotiated a bipartisan discussion draft on federal privacy regulations and began asking industry and civil society groups to weigh in.

Why it matters: The draft, which staffers started circulating Wednesday, is a rare and potentially significant bipartisan step toward a national privacy law, a goal that's proven elusive despite strong, sustained interest from both parties. An effort in the Senate led to dueling Democratic and Republican takes on privacy.

Driving the news: Rep. Jan Schakowsky, who chairs the E&C consumer protection subcommittee, said the draft is meant to shift the burden of protecting privacy off consumers and onto companies and regulators.

• It would establish a four-tier system in which companies face more restrictions based on whether they intend to use consumer data in a way that's consistent with consumer expectations.
• For example, there would be fewer protections associated with Amazon using a customer's address and purchase information to ship a book and more restrictions on Amazon sharing book purchase information with a third party for marketing purposes.
• The draft also empowers the FTC with the ability to issue fines for first-time offenses.
• "I want to address the growing anxiety of consumers that they have become the product," Schakowksy said in an interview. "And their information — they feel they have no control over it. They don’t know where and who and what it’s being used for."

What it's missing: The draft doesn't address the issues of federal preemption of state laws or a so-called private right of action letting consumers sue companies over privacy screw-ups. Those issues have divided Republicans and Democrats, contributing to the splintering of the Senate effort.

• Schakowsky said preemption will be handled toward the end of the legislative process. "If we have the most robust bill in the world so far, then we can have that conversation."

• The draft also would create a new Bureau of Privacy within the FTC, rather than creating a new federal agency to police privacy, as some Democrats have proposed.

What's next: The deadline for feedback on the draft is Jan. 24. Schakowsky said she is committed to doing a bill next year.

• "I think the bill will be the E&C bill," she said. "It’s the only one where we really have bipartisanship that is really comprehensive."

Yes, but: Staff cautioned the draft "does not necessarily represent the policy positions of Members" in the request for feedback from outside parties.

• A Republican committee spokesperson said, "We know we need clear rules of the road and one national privacy standard. We are now at the next step of our deliberative process—sharing the draft with stakeholders, and we look forward to working with them going forward.”