Frustrated by privacy lapses by US companies, Democrat Senator Ron Wyden of Oregon has introduced proposed federal legislation referred to as the Mind Your Own Business Act (the Act). If enacted, this law could put serious teeth into efforts to protect consumer data.
Serious Penalties for Noncompliance
Indeed, the Act could cause certain executives to find themselves in prison for as many as twenty years if their companies are found to have lied to legal authorities about improper use of consumers’ personal information. On top of that, the Act could lead to such companies incurring special tax penalties corresponding to executives’ salaries.
If this were not enough, the Act would empower the Federal Trade Commission with the ability to fine companies for violating this law up to four percent of corporate annual revenues. For some companies, this could amount to fines in the billions of dollars.
Facebook Is the Main Target
CNN reports that the Act is Senator Wyden’s effort to go after Facebook. Wyden has been a critic of Facebook, arguing that its $5 billion settlement with the FTC relating to Cambridge Analytica was too weak.
Senator Wyden has said that the Act provides more than a slap on the wrist for serious privacy violations, as it contemplates potential prison time if lies are told to the government about such violations.
Consumer Protections and Private Right of Action
The Act proposed by Wyden broadens earlier legislation that he circulated last fall. That legislation calls for a one-click ability for consumers to opt out of such things as sharing/selling of personal information and tracking.
The Act also would enable consumer privacy groups to launch litigation against companies for privacy violations. And it would not override very strict state laws like the California Consumer Privacy Act; states would be free to enact even stronger privacy protections than those in Wyden’s proposed legislation.
CNN reports that Republicans at least so far are opposed to a private right of action and would want federal legislation to preempt state laws like the California Consumer Privacy Act.
It will be interesting to see whether Wyden’s recent Act will gather momentum on Capitol Hill or if it will fade away with in the election year coming up.
Eric Sinrod (@EricSinrod on Twitter) is a partner in the San Francisco office of Duane Morris LLP, where he focuses on litigation matters of various types, including information technology and intellectual property disputes. You can read his professional biography here. To receive a weekly email link to Mr. Sinrod’s columns, please email him at email@example.com with Subscribe in the Subject line. This column is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this column are those of the author and do not necessarily reflect the views of the author’s law firm or its individual partners.