Rep. Speier Introduces Do Not Track’ Online Privacy Legislation

On February 11, 2011, Rep. Jackie Speier (D-CA) introduced Do Not Track” legislation that would provide consumers with the ability to opt out of having their personal information tracked by online advertisers. If passed, the Do Not Track Me Online Act (H.R. 654) would direct the Federal Trade Commission (“FTC”) to promulgate regulations to establish standards for an online, consumer opt-out mechanism. Consumers would be able to opt out of the collection and use of their personal information, such as web activity, geolocation, IP address, name, physical address, email address, driver’s license or Social Security number, and financial account numbers, by online advertisers and website operators.

If enacted, the Act also would require online advertisers and website operators to disclose their data collection, use and disclosure practices, including identification of third parties that receive such personal information. The Act gives the FTC regulatory discretion to require that consumers have access to the data stored by the online advertiser or website operator.

The FTC and state Attorneys General would be able enforce the Act, and may seek civil penalties up to $11,000 per day for violations (maximum $5,000,000 for related violations), as well as injunctive relief.

Consistent with the proposed privacy framework in the FTC’s recent preliminary staff report (see Kelley Drye client advisory), the Act also would permit the FTC to exempt certain commonly accepted commercial practices. The Act also exempts entities that engage in certain de minimis data collection and storage of non-sensitive information, as long as the information is not used to monitor individual behavior as the primary business.

On the same day Rep. Speier introduced her Do Not Track bill, Rep. Bobby Rush (D-IL) introduced the BEST PRACTICES Act (H.R. 611) – privacy legislation similar to the bill he introduced in the previous Congress. In contrast to Speier’s bill, which requires a Do Not Track mechanism, Rush’s bill allows entities to adopt voluntary Do Not Track mechanisms as a safe harbor” from FTC enforcement. Rep. Cliff Sterns (R-FL) and Rep. Edward Markey (D-MA) also have indicated their intent to introduce consumer privacy legislation of their own. Businesses that operate both online and off should pay close attention to how these pieces of legislation may affect them, as privacy legislation circulating Congress such as Speier’s bill will help shape the ongoing consumer privacy debate in Congress.

This post was written by Dana B. Rosenfeld.