Commercial Data Privacy and Innovation in the Internet Economy: A Dynamic Policy Framework

The Department of Commerce issued a report detailing initial policy recommendations aimed at promoting consumer privacy online while ensuring the Internet remains a platform that spurs innovation, job creation, and economic growth. The report outlines a dynamic framework to increase protection of consumers’ commercial data and support innovation and evolving technology. The Department is seeking additional public comment on the plan to further the policy discussion and ensure the framework benefits all stakeholders in the Internet economy.

The following are key recommendations of the report:

• Consider Establishing Fair Information Practice Principles comparable to a “Privacy Bill of Rights” for Online Consumers: The report recommends considering a clear set of principles concerning how online companies collect and use personal information for commercial purposes. These principles would be recognized by the U.S. government and serve as a foundation for online consumer data privacy. They would build on existing Fair Information Practice Principles (FIPPs) that are widely accepted among privacy experts as core obligations.
• Consider Developing Enforceable Privacy Codes of Conduct in Specific Sectors with Stakeholders; Create a Privacy Policy Office in the Department of Commerce: In considering new policies for commercial privacy, the government should enlist the expertise of industry, consumer groups, privacy advocates, and other stakeholders. In particular, the report recommends establishing a privacy policy office in the Department of Commerce that would work with the FTC, the Executive Office of the President, and other Federal entities, to examine commercial uses of personal information and evaluate whether uncertainty or gaps in privacy protections exist. The new office would convene stakeholder dialogues, and, with respect to specific areas of concern, help develop enforceable privacy codes of conduct.
• Encourage Global Interoperability to Spur Innovation and Trade: Reducing regulatory barriers to trade is a high priority for the Obama administration. Currently, disparate privacy laws have a growing impact on global competition. The report recommends that the U.S. government work together with its trading partners to find practical means of bridging differences in our privacy frameworks. Collaborations with other privacy authorities around the world can reduce the significant business compliance costs. This global engagement could play a key role in a new dynamic privacy framework.
• Consider How to Harmonize Disparate Security Breach Notification Rules: As an initial step towards consideration of a new privacy framework, the report recommends looking at ways in which to harmonize the rules that set standards for businesses to notify customers about commercial data security breaches. This comprehensive national approach to commercial data breaches would provide clarity to consumers, streamline industry compliance, and allow businesses to develop a strong, nationwide data management strategy.
• Review the Electronic Communications Privacy Act for the Cloud Computing Environment: The report recommends that the Obama Administration review the Electronic Communications Privacy Act (ECPA) to address privacy protection in cloud computing and location-based services. A goal of this effort should be to ensure that, as technology and market conditions change, ECPA continues to appropriately protect individuals’ privacy expectations and punish unlawful access and disclosure of consumer data.