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United States Privacy Digest | Notes from the IAPP, Aug. 12, 2022 Related reading: Notes from the IAPP, Aug. 5, 2022

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Greetings from Portsmouth, New Hampshire!

I'll be honest, I didn't have the U.S. Federal Trade Commission launching a privacy and data security rulemaking on my summer privacy bingo card. All indications to this point were that rulemaking was a safety net for U.S. Congress falling short on the proposed American Data Privacy and Protection Act.

There are certainly challenges facing Congress with the federal proposal, but no one would exactly call the bill a failure or dead at this stage. That's what makes this rulemaking announcement all the more interesting. Adding to the intrigue is that all five FTC commissioners, who voted 3-2 on party lines to issue the Advanced Notice of Proposed Rulemaking this week, acknowledged they prefer federal legislation be passed before rulemaking even really gets off the ground.

Commissioners Alvaro Bedoya, Rebecca Kelly Slaughter and Christine Wilson were candid about legislation being the preferred path to improve consumer protections and mitigate industry malpractice. Bedoya noted he would forego support of any rules that would overlap with the ADPPA if it were to pass. Slaughter stated that she views the ANPR "as a complement to the legislative effort, not a substitute." Wilson said it would be "tragic if (FTC Chair Lina Khan's) FTC derails what FTC has long sought" with federal legislation by proceeding with "a sprawling rulemaking."

The Congressional figures overseeing the ADPPA's path to final passage also want the federal bill to remain the focus. U.S. House Committee on Energy and Commerce Chair Frank Pallone, D-N.J., appreciated the ANPR, but said U.S. lawmakers have "a responsibility to pass comprehensive federal privacy legislation to better equip the agency, and others, to protect consumers to the greatest extent." Senate Committee on Commerce, Science and Transportation Ranking Member Roger Wicker, R-Miss., characterized the rulemaking notice as means to hopefully "underscore the urgency" that exists for passing legislation, adding "the time to move on ADPPA is now."

Given that key players prefer federal legislation, what sense does it make for the FTC to move forward with rulemaking in this moment?

It's very possible rulemaking is being used as a motivational tool. The FTC could be telling U.S. lawmakers it is willing to go a less desirable and less effective path if they want to drag their feet and further resist compromise on a federal framework. It's as if the agency is saying "your move" with an understanding that it has very little to lose.

Long story short, this is going one of two ways. Rulemaking may spur eventual passage of the current bill after reaffirmation of compromises between chambers of Congress. The alternative is legislative efforts fail, rulemaking takes off and everyone waits to see whether another federal proposal pops up during what's expected to be a drawn out FTC process.

It's wait-and-see mode once again, privacy pros.

1 Comment

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  • comment William Perkins • Aug 12, 2022
    One more interesting twist to all of this - if the ADPPA does not pass this session and the Republicans win the Senate, then Ted Cruz is likely to be the new chair of the U.S. Senate Committee on Commerce, Science, and Transportation.  Any privacy bills would probably go through that committee and Ted has never met a regulation that he liked.   He would not allow the ADPPA to pass out of that committee.  Possibly the FTC is setting up plan B - if Congress cannot get its act together, the FTC will provide privacy rules.