Kerry and McCain to Unveil Privacy Bill Tomorrow

As promised, Democratic Senator John Kerry, along with Republican Senator John McCain, plan to unveil their bipartisan privacy bill tomorrow. "The Commercial Privacy Bill of Rights Act of 2011" will address both online and offline data privacy.

A draft of the bill calls for the Federal Trade Commission to establish rules requiring companies collecting personally-identifiable data such as names and email addresses to provide "clear, concise, and timely notice" of data collection, use and transfer. If passed, the law would grant the FTC oversight of a requirement that companies offer "a clear and conspicuous mechanism for opt-out consent for any unauthorized use of their personally identifiable information."

The Kerry/McCain draft would be the first comprehensive data privacy protection bill introduced in the Senate recently.

Unlike another bill introduced in the House recently by Democrat Jackie Speier, the draft of the Kerry/McCain bill does not refer specifically to do-not-track, a concept popularized by the FTC. In fact, the Kerry/McCain draft does not make specific mention of data collection and use for online advertising at all.

During a Senate Commerce Committee hearing in March, Kerry said, "Americans cannot today demand that someone who's collecting their information stop using it," and pointed to increased data collection across digital channels such as email and mobile apps as well as offline by grocery stores, hotels and airlines.

A provision is included in the draft allowing firms participating in a safe harbor program - such as an industry self-regulatory program - to offer consumer opt out from transfer of data to third parties. The FTC would approve and monitor any safe-harbor program.

The draft bill, like a related House bill sponsored by Democrat Bobby Rush, gives the FTC enforcement capabilities, and allows the agency to slap penalties on violators. It also prohibits private right of action, and calls for the Department of Commerce to work with industry and other groups in developing codes of conduct for safe harbor application.