New Privacy Legislation Would Stunt U.S. Digital Economy, Says Leading Tech Policy Think Tank

November 26, 2019

WASHINGTON— In response to the Consumer Online Privacy Rights Act (COPRA), privacy legislation released today by Sen. Maria Cantwell (D-WA), and co-sponsored by Sens. Schatz (D-HI), Klobuchar (D-MN), and Markey (D-MA), the Information Technology and Innovation Foundation (ITIF), the world’s leading think tank for science and technology policy, released the following statement from ITIF Vice President Daniel Castro:

This legislation fails to strike the right balance between consumer privacy and commercial innovation. It would severely restrict legitimate uses of consumer data, limiting the opportunities for companies to collect, use, and share data to innovate in the digital economy. For example, the bill would require companies to minimize the data they collect, which would reduce opportunities for businesses to extract new value from existing data and develop new products and services.

In addition, the legislation excludes small businesses from many of its unreasonable requirements, an acknowledgement of the excessive regulatory burden it would impose on firms. However, excluding small businesses makes little sense if the focus is on consumer privacy, in part because small businesses often have worse security than large companies. Moreover, this legislation would impose new restrictions on the use of artificial intelligence (AI), negatively impacting the deployment of AI in the United States.

The main beneficiary of this legislation appears to be privacy lawyers, as companies would be forced to spend millions on legal services to update privacy notices, hire dedicated privacy officers, and defend themselves against civil suits. Finally, this legislation would still allow states to create many additional privacy laws in certain areas, creating a complex patchwork of rules that businesses would have to master before offering services nationally.

This bill reflects the wish list of certain privacy activists who are uninterested in the economic impact of data protection legislation. Make no mistake, it would be a recipe for spoiling the digital economy. We encourage Congress to continue to work together on bipartisan privacy legislation that streamlines regulation, preempts state laws, establishes basic consumer data rights, and minimizes the impact on innovation.