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Early sticking points emerge for privacy bill

Illustration of a padlock with a cursor shape as the keyhole.

Illustration: Aïda Amer/Axios

Key lawmakers and advocacy groups are raising concerns over Sen. Maria Cantwell and Rep. Cathy McMorris Rodgers' new bipartisan privacy bill.

Why it matters: The federal privacy conversation is front and center again, but the wave of criticism facing the discussion draft signals a major lobbying battle ahead.

What they're saying: The bill is now under intense scrutiny, including from Senate Commerce Ranking Member Ted Cruz, who said he wants to ensure it doesn't have "the same flaws" as the ADPPA.

  • "In particular, I cannot support any data privacy bill that empowers trial lawyers, strengthens Big Tech by imposing crushing new regulatory costs on upstart competitors or gives unprecedented power to the FTC to become referees of internet speech and DEI compliance," Cruz said.
  • Carl Holshouser, executive vice president of TechNet, said: "We are examining the bill, and while any momentum is good, the devil is always in the details. We are deeply concerned that language around preemption could be a gift to the trial lawyers."

Friction point: Rep. Frank Pallone, ranking Democrat on the House Energy and Commerce Committee, said he supports the effort but that it could be strengthened, "especially children's privacy."

  • The draft bill requires annual reviews of algorithms to ensure they don't harm kids.

Zoom in: Kids' safety advocates are keeping an eye on how the draft legislation will take other bills, namely COPPA 2.0 and KOSA, into account and whether it will preempt state-level measures.

  • Some states already have kids codes in place.
  • "We need to know more about how the preemption language will affect the good work that occurred in the states regarding not just privacy, which is more clear, but about online safety," Common Sense Media chief advocacy officer Danny Weiss said.
  • CMR spokesperson Sean Kelly said: "Our understanding is that this bill does not preempt state design code bills."

Along with preemption, there are concerns about the bill's private right of action.

  • Information Technology and Innovation Foundation senior policy manager Ashley Johnson said she's worried that it's "much broader" than previous bills.
  • The ADPPA, for instance, would have required individuals to first notify their state attorney general and the FTC of their intent to sue.

What's next: Once the bill is formally introduced, it'll go through hearings and markups.

  • Software company trade group BSA said it will focus on ensuring the bill reflects the role of service providers "who should be subject to strong obligations as they process data on behalf of other companies" and will prioritize the bill's effect on AI policy.

The big picture: Lawmakers don't have a lot of time left this Congress to reach compromises, address outside group concerns and get a law passed after years of stalemate.

  • Representatives of California delegation members Reps. Zoe Lofgren, Nancy Pelosi, Ro Khanna and Sens. Laphonza Butler and Alex Padilla declined to comment.
  • Meta, Google, Amazon and Apple declined to comment on the new bill.
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