California legislators approved a law Thursday that gives consumers more control over data collected by companies such as Facebook, Google, Amazon and Uber, according to published reports.
The law could cause other states and Congress to adopt similar rules, the reports state.
How significant is this?
The California Consumer Privacy Act is considered one of the toughest regulations aimed at the tech giants of Silicon Valley. It came in response to online privacy concerns about how Facebook and other companies gather and distribute consumers' information.
Under the new California law, tech firms are required to disclose what data they collect. It also allows users to “opt out of having their information sold to third parties, including advertisers,” the Washington Post reported.
The new privacy rules in California go into effect in 2020. AT&T, Comcast, Facebook and Google are expected to aggressively lobby against it and try to get it revised.
Facebook, Google and Uber opposed the new rules as they were being developed, according to the Washington Post. The companies even donated to a coalition to oppose the measure.
A group representing the companies – the Internet Association – indicated it would not try to obstruct or block any legislation, but would instead “correct the inevitable, negative policy and compliance ramifications this last-minute deal will create," according to the report.
On the other hand, California’s new privacy laws could force tech companies to change their privacy practices nationwide. One reason is that the companies would have different operating rules for California and elsewhere.
“I think it’s going to set the standard across the country that legislatures across the country will look to adopt in their own states,” state Sen. Bob Hertzberg, a Democrat, one of the law’s authors, told the Washington Post before it passed Thursday.
The law allows the California’s attorney general to monitor Silicon Valley’s privacy practices and file cases if companies fail to comply with consumers’ privacy choices and protect their data from cybercriminals, the report states.
Hertzberg compared it to California’s attorney general becoming “the chief privacy officer of the United States.”
Are there any drawbacks?
Privacy advocates pointed to some potential pitfalls under the law. For example, the law allows companies to charge higher fees for consumers who want to limit their data. The amount would be equal to the "value provided by the consumer’s data,” according to the law.
“I believe this path to pay for privacy is a dangerous and slippery slope,” Democratic Sen. Hannah-Beth Jackson told the Washington Post, even though she supported the law.
James Steyer, the founder of Common Sense Media, told the Washington Post that advocates hope to refine the law over the coming year. At the same time, the group plans to push for similar legislation across the U.S. The ultimate goal is to get Congress on board, he said.
For decades, Congress has failed to approve a comprehensive federal privacy law, the report noted.