Amid growing concerns over the improper use of user information and data breaches, and in the same week as the Senate examines the Cambridge Analytica controversy, a duo of U.S. senators who have long advocated for federal consumer privacy legislation seized the moment to propose a new bill, the Customer Online Notification for Stopping Edge-provider Network Transgressions (CONSENT) Act (the Bill). It would give the Federal Trade Commission (FTC or Commission), for the first time, authority to promulgate regulations to govern internet publishers' and service providers' privacy practices regarding adults and propose EU-style privacy protections, including opt-in consent to data use and sharing.
If passed, the law, and the FTC regulations to be promulgated under it, could radically alter the internet economy by making it significantly harder for publishers to monetize data to provide more relevant advertising to users, so-called interest-based advertising (IBA), which is the economic underpinning of the business model of the publishers and services that provide their content and services to users for free on an advertiser-supported basis. The Bill actually goes further in some ways than European law in that it would prohibit limiting services to users that consent to data use and sharing necessary for IBA, and would give the FTC the authority to determine whether pricing based on "discounts or other incentives in exchange for express affirmative consent" is "reasonable." It is conceivable that the circumstances of the moment may have created a tipping point that makes passage of the Bill a real possibility. And even if a federal consumer privacy law fails to get through Congress, a California advocacy group is attempting to qualify a ballot initiative for EU-style privacy laws for the November general election that could also threaten ad-supported digital media. For more information, click here for a blog post by BakerHostetler lawyers Alan Friel and Njeri Chasseau.
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