[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 611 Introduced in House (IH)]
112th CONGRESS
1st Session
H. R. 611
To foster transparency about the commercial use of personal
information, provide consumers with meaningful choice about the
collection, use, and disclosure of such information, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 10, 2011
Mr. Rush introduced the following bill; which was referred to the
Committee on Energy and Commerce
_______________________________________________________________________
A BILL
To foster transparency about the commercial use of personal
information, provide consumers with meaningful choice about the
collection, use, and disclosure of such information, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Building Effective
Strategies To Promote Responsibility Accountability Choice Transparency
Innovation Consumer Expectations and Safeguards Act'' or the ``BEST
PRACTICES Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2 Definitions.
TITLE I--TRANSPARENCY, NOTICE, AND INDIVIDUAL CHOICE
Sec. 101. Information to be made available.
Sec. 102. Provision of notice or notices.
Sec. 103. Opt-out consent required for collection and use of covered
information by a covered entity.
Sec. 104. Express affirmative consent.
Sec. 105. Material changes to privacy practices.
Sec. 106. Exceptions.
TITLE II--ACCURACY, ACCESS, AND DISPUTE RESOLUTION
Sec. 201. Accuracy.
Sec. 202. Access and dispute resolution.
TITLE III--DATA SECURITY, DATA MINIMIZATION, AND ACCOUNTABILITY
Sec. 301. Data security.
Sec. 302. Accountability.
Sec. 303. Data minimization obligations.
TITLE IV--SAFE HARBOR AND SELF-REGULATORY CHOICE PROGRAM
Sec. 401. Safe harbor.
Sec. 402. Approval by the Federal Trade Commission.
Sec. 403. Requirements of self-regulatory program.
Sec. 404. Rulemaking.
TITLE V--EXEMPTIONS
Sec. 501. Use of aggregate or deidentified information.
Sec. 502. Activities covered by other Federal privacy laws.
TITLE VI--APPLICATION AND ENFORCEMENT
Sec. 601. General application.
Sec. 602. Enforcement by the Federal Trade Commission.
Sec. 603. Enforcement by State attorneys general.
Sec. 604. Private right of action.
Sec. 605. Effect on other laws.
TITLE VII--MISCELLANEOUS PROVISIONS
Sec. 701. Review.
Sec. 702. Consumer and business education campaign.
Sec. 703. Effective date.
Sec. 704. Severability.
SEC. 2. DEFINITIONS.
As used in this Act, the following definitions apply:
(1) Aggregate information.--The term ``aggregate
information'' means data that relates to a group or category of
services or individuals, from which all information identifying
an individual has been removed.
(2) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(3) Covered entity.--The term ``covered entity'' means a
person engaged in interstate commerce that collects or stores
data containing covered information or sensitive information.
Such term does not include--
(A) the Federal Government or any instrumentality
of the Federal Government, nor the government of any
State or political subdivision of a State; or
(B) any person that can demonstrate that such
person--
(i) stores covered information from or
about fewer than 15,000 individuals;
(ii) collects covered information from or
about fewer than 10,000 individuals during any
12-month period;
(iii) does not collect or store sensitive
information; and
(iv) does not use covered information to
study, monitor, or analyze the behavior of
individuals as the person's primary business.
(4) Covered information.--
(A) In general.--The term ``covered information''
means, with respect to an individual, any of the
following:
(i) the first name or initial and last
name;
(ii) a postal address;
(iii) an email address;
(iv) a telephone or fax number;
(v) a tax identification number, passport
number, driver's license number, or any other
unique government-issued identification number;
(vi) a financial account number, or credit
card or debit card number, or any required
security code, access code, or password that is
necessary to permit access to an individual's
financial account;
(vii) any unique persistent identifier,
such as a customer number, unique pseudonym or
user alias, IP address, or other unique
identifier, where such identifier is used to
collect, store or identify information about a
specific individual or to create or maintain a
preference profile; or
(viii) any other information that is
collected, stored, used, or disclosed in
connection with any covered information
described in clauses (i) through (vii).
(B) Exclusion.--Such term shall not include--
(i) the title, business address, business
email address, business telephone number, or
business fax number associated with an
individual's status as an employee of an
organization, or an individual's name when
collected, stored, used, or disclosed in
connection with such employment status; or
(ii) any information collected from or
about an employee by an employer, prospective
employer, or former employer that directly
relates to the employee-employer relationship.
(5) Operational purpose.--
(A) In general.--The term ``operational purpose''
means a purpose reasonably necessary to facilitate,
improve, or safeguard the logistical or technical
ability of a covered entity to provide goods or
services, manage its operations, comply with legal
obligations, or protect against risks and threats,
including--
(i) providing, operating, or improving a
product or service used, requested, or
authorized by an individual, including the
ongoing provision of customer service and
support;
(ii) analyzing data related to use of the
product or service for purposes of improving
the covered entity's products, services, or
operations;
(iii) basic business functions such as
accounting, inventory and supply chain
management, quality assurance, and internal
auditing;
(iv) protecting or defending the rights or
property, including intellectual property, of
the covered entity against actual or potential
security threats, fraud, theft, unauthorized
transactions, or other illegal activities;
(v) preventing imminent danger to the
personal safety of an individual or group of
individuals;
(vi) complying with a Federal, State, or
local law, rule, or other applicable legal
requirement, including disclosures pursuant to
a court order, subpoena, summons, or other
properly executed compulsory process; and
(vii) any other category of operational use
specified by the Commission by regulation that
is consistent with the purposes of this Act.
(B) Exclusion.--Such term shall not include--
(i) the use of covered information for
marketing or advertising purposes, or any use
of or disclosure of covered information to a
third party for such purposes; or
(ii) the use of covered information for a
purpose that an individual acting reasonably
under the circumstances would not expect based
on the product or service used, requested, or
authorized by the individual.
(6) Preference profile.--The term ``preference profile''
means a list of preferences, categories of information, or
interests--
(A) associated with an individual or with an
individual's computer or other device;
(B) inferred from the actual behavior of the
individual, the actual use of the individual's computer
or other device, or information supplied directly by
the individual or other user of a computer or other
device; and
(C) compiled and maintained for the purpose of
marketing or purposes related to marketing,
advertising, or sales.
(7) Publicly available information.--
(A) In general.--The term ``publicly available
information'' means any covered information or
sensitive information that a covered entity has a
reasonable basis to believe is lawfully made available
to the general public from--
(i) Federal, State, or local government
records;
(ii) widely distributed media; or
(iii) disclosures to the general public
that are required to be made by Federal, State,
or local law.
(B) Construction.--A covered entity has a
reasonable basis to believe that information is
lawfully made available to the general public if the
covered entity has taken steps to determine--
(i) that the information is of a type that
is available to the general public; and
(ii) whether an individual can direct that
the information not be made available to the
general public and, if so, that the individual
has not done so.
(8) Sensitive information.--
(A) Definition.--The term ``sensitive information''
means--
(i) any information that is associated with
covered information of an individual and
relates directly to that individual's--
(I) medical history, physical or
mental health, or the provision of
health care to the individual;
(II) race or ethnicity;
(III) religious beliefs and
affiliation;
(IV) sexual orientation or sexual
behavior;
(V) income, assets, liabilities, or
financial records, and other financial
information associated with a financial
account, including balances and other
financial information, except when
financial account information is
provided by the individual and is used
only to process an authorized credit or
debit to the account; or
(VI) precise geolocation
information and any information about
the individual's activities and
relationships associated with such
geolocation; or
(ii) an individual's--
(I) unique biometric data,
including a fingerprint or retina scan;
or
(II) Social Security number.
(B) Modified definition by rulemaking.--The
Commission may, by regulations promulgated under
section 553 of title 5, United States Code, modify the
scope or application of the definition of ``sensitive
information'' for purposes of this Act. In promulgating
such regulations, the Commission shall consider--
(i) the purposes of the collection of the
information and the context of the use of the
information;
(ii) how easily the information can be used
to identify a specific individual;
(iii) the nature and extent of authorized
access to the information;
(iv) an individual's reasonable
expectations under the circumstances; and
(v) adverse effects that may be experienced
by an individual if the information is
disclosed to an unauthorized person.
(C) Precise geolocation information defined by
rulemaking.--The Commission shall, by regulations
promulgated under section 553 of title 5, United States
Code, define the term ``precise geolocation
information'' for purposes of subparagraph (A)(i)(VI).
(9) Service provider.--The term ``service provider'' means
an entity that collects, maintains, processes, stores, or
otherwise handles covered information or sensitive information
on behalf of a covered entity, including, for the purposes of
serving as a data processing center, distributing the
information, providing customer support, maintaining the
covered entity's records, information technology management,
Web site or other hosting service, fraud detection,
authentication, and other verification services, or performing
other administrative support functions for the covered entity.
(10) Third party.--
(A) In general.--The term ``third party'' means,
with respect to any covered entity, a person that--
(i) is not related to the covered entity by
common ownership or corporate control; or
(ii) is a business unit or corporate entity
that holds itself out to the public as separate
from the covered entity, such that an
individual acting reasonably under the
circumstances would not expect it to be related
to the covered entity or to have access to
covered information the individual provides to
that covered entity.
(B) Collection of information by multiple
sources.--For the purpose of this definition, where
multiple persons collect covered information or
sensitive information from or about visitors to an
online or mobile service, including a Web site, all
such persons other than the operator or publisher of
the online or mobile service or Web site shall be
considered third parties unless--
(i) the person meets the requirements of
the service provider exception in section
106(1); or
(ii) the person otherwise does not satisfy
the requirements for a third party pursuant to
the regulations implemented pursuant to
subparagraph (C).
(C) Rulemaking.--Not later than 18 months after the
date of the enactment of this Act, the Commission shall
promulgate regulations under section 553 of title 5,
United States Code, to clarify or modify the definition
of third party for purposes of this Act. In
promulgating such regulations, the Commission shall
consider--
(i) the brand or brands associated with a
covered entity;
(ii) the scope and nature of the businesses
engaged in by a covered entity and a third
party, including the nature of the products or
services offered by the covered entity and
third party; and
(iii) the relationship between a covered
entity and a third party, taking into account
such factors as ownership and control.
TITLE I--TRANSPARENCY, NOTICE, AND INDIVIDUAL CHOICE
SEC. 101. INFORMATION TO BE MADE AVAILABLE.
A covered entity shall, in accordance with the regulations issued
under section 102, make available to individuals whose covered
information or sensitive information it collects or maintains the
following information about its information privacy practices and an
individual's options with regard to such practices:
(1) The identity of the covered entity.
(2) A description of any covered information or sensitive
information collected or stored by the covered entity.
(3) The specific purposes for which the covered entity
collects and uses the covered information or sensitive
information, including disclosure as to whether and how the
covered entity customizes products or services or changes the
prices of products or services based, in whole or in part, on
covered information or sensitive information about individual
customers or users.
(4) The specific purposes for which covered information or
sensitive information may be disclosed to a third party and the
categories of third parties who may receive such information
for each such purpose.
(5) The choice and means the covered entity offers
individuals for limiting the collection, use, and disclosure of
covered information or sensitive information, in accordance
with sections 103 and 104.
(6) A description of the information for which an
individual may request access and the means to request such
access, in accordance with section 202.
(7) How the covered entity may merge, link, or combine
covered information or sensitive information collected from the
individual with other information about the individual that the
covered entity may acquire from third parties.
(8) The retention schedule for covered information and
sensitive information in days, months, or years, or a statement
that the covered entity will retain such information
indefinitely or permanently.
(9) Whether or not an individual has the right to direct
the covered entity to delete information collected from or
about the individual.
(10) A reasonable means by which an individual may contact
the covered entity with any inquiries or complaints regarding
the covered entity's practices--
(A) concerning the collection, use, disclosure, or
handling of the individual's covered information or
sensitive information in accordance with section
302(a); or
(B) to assure the accuracy of the individual's
covered information or sensitive information in
accordance with section 201(a).
(11) The process by which the covered entity notifies
individuals of material changes to its policies and practices.
(12) A hyperlink to or a listing of the Commission's online
consumer complaint form or the toll-free number for the
Commission's Consumer Response Center.
(13) The effective date of the privacy notice.
SEC. 102. PROVISION OF NOTICE OR NOTICES.
(a) In General.--It shall be unlawful for a covered entity to
collect, use, or disclose covered information or sensitive information
unless it provides the information set forth in section 101 in concise,
meaningful, timely, prominent, and easy-to-understand notice or
notices, in accordance with the regulations issued by the Commission
under subsection (b).
(b) Rulemaking.--Not later than 18 months after the date of the
enactment of this Act, the Commission shall promulgate regulations
under section 553 of title 5, United States Code, to implement this
section. In promulgating such regulations, the Commission--
(1) shall determine the means and timing of the notices
required under this section, taking into account the different
media, devices, or methods through which the covered entity
collects covered information or sensitive information;
(2) shall have the authority to allow for, or require, the
provision of short notices or limited disclosures that do not
include all of the information set forth in section 101, if the
Commission by regulation--
(A) requires the information to be otherwise
clearly and conspicuously disclosed or available to
individuals; and
(B) determines that the provision of such short
notices or limited disclosures will accomplish the
purposes of this Act to enhance transparency and
provide individuals with meaningful choice regarding
the collection, use, and disclosure of their covered
information or sensitive information;
(3) shall consider--
(A) whether the notice or notices provide
individuals with timely, effective, and meaningful
notice that will enable an individual to understand
relevant information and make informed choices;
(B) whether providing notice to individuals prior
to or contemporaneously with the collection of covered
information is practical or reasonable under the
circumstances;
(C) the costs of implementing the prescribed notice
or notices;
(D) the different media and context through which
covered information is collected;
(E) whether it is reasonable and appropriate under
the circumstances for a third party or a service
provider to be responsible for providing notice and
obtaining consent as required by this title in lieu of
a covered entity; and
(F) the risk to consumers and commerce of over-
notification; and
(4) may issue model notices.
(c) Exclusion From Notice Requirements.--
(1) Trade secret information.--Nothing in this section
shall require a covered entity to reveal confidential, trade
secret, or proprietary information.
(2) In-person transactions.--Notice under this section
shall not be required for in-person collection of covered
information if--
(A) the covered information is collected for an
operational purpose; or
(B) the covered entity only is collecting the name,
address, email address, telephone or fax number of an
individual and does not--
(i) share the covered information with
third parties; or
(ii) use the covered information to acquire
additional information about the individual
from third parties.
(d) Retention.--A covered entity shall retain copies of the notice
or notices issued pursuant to this section for a period of 6 years
after the date on which such notice was issued or the date when it was
last in effect, whichever is later, unless the Commission determines
pursuant to the rulemaking required under subsection (b) that such
retention is not practical under the circumstances.
SEC. 103. OPT-OUT CONSENT REQUIRED FOR COLLECTION AND USE OF COVERED
INFORMATION BY A COVERED ENTITY.
(a) In General.--Except as provided in subsections (e) and (f) and
section 106, it shall be unlawful for a covered entity to collect or
use covered information about an individual without the consent of that
individual, as set forth in this section. A covered entity shall be
considered to have the consent of an individual for the collection and
use of covered information about the individual if--
(1) the covered entity has provided to the individual
notice required under section 102 and its implementing
regulations;
(2) the covered entity provides the individual with a
reasonable means to exercise an opt-out right and decline
consent for such collection and use; and
(3) the individual either affirmatively grants consent for
such collection and use or does not decline consent at the time
notice is presented or made available to the individual.
(b) Duration of Individual's Opt-Out.--An individual's direction to
opt out under this section is effective permanently, unless otherwise
directed by the individual.
(c) Subsequent Opt-Out.--A covered entity shall provide an
individual with a reasonable means to decline consent or revoke
previously granted consent at any time.
(d) More Detailed Options.--A covered entity may comply with this
section by enabling an individual to decline consent for specific uses
of his or her covered information, provided the individual has been
given the opportunity to decline consent for the collection and use of
covered information for all purposes, other than for an operational
purpose excepted by subsection (e), for which covered information may
be collected and used by the covered entity.
(e) Exception for Operational Purposes.--This section shall not
apply to the collection or use of covered information for an
operational purpose.
(f) Collection and Use as a Condition of Service.--Nothing in this
section shall prohibit a covered entity from requiring, as a condition
of an individual's receipt of a service or other benefit, including the
receipt of an enhanced or premium version of a product or service
otherwise available, the reasonable collection and use of covered
information about the individual, provided that--
(1) the covered entity has a direct relationship with the
individual;
(2) the covered information is not shared with any third
party except with the express affirmative consent as set forth
in section 104;
(3) the covered entity provides a clear, prominent, and
specific statement describing the specific purpose or purposes
for which covered information may be used pursuant to section
101;
(4) the individual provides consent by acknowledging the
specific uses set forth in the clear and prominent statement
required under paragraph (3) as part of receiving the service
or other benefit from the covered entity; and
(5) the individual is able to later withdraw consent for
the use by canceling the service or otherwise indicating that
he or she no longer wishes to receive the service or other
benefit.
SEC. 104. EXPRESS AFFIRMATIVE CONSENT.
(a) Disclosure of Covered Information to Third Parties.--
(1) Disclosure prohibited.--Except as provided in section
106 and subject to title IV of this Act, it shall be unlawful
for a covered entity to disclose covered information about an
individual to a third party unless the covered entity has
received express affirmative consent from the individual prior
to the disclosure.
(2) Exception for joint marketing.--Express affirmative
consent shall not be required for any disclosure related to the
performance of joint marketing, if the covered entity and the
third party enter into a contractual agreement prohibiting the
third party from disclosing or using the covered information
except as necessary to carry out the joint marketing
relationship.
(b) Collection, Use, or Disclosure of Sensitive Information.--
Except as provided in section 106, a covered entity may not collect,
use, or disclose sensitive information from or about an individual for
any purpose unless the covered entity obtains the express affirmative
consent of the individual.
(c) Comprehensive Online Data Collection.--A covered entity may not
use hardware or software to monitor all or substantially all of the
individual's Internet browsing or other significant class of Internet
or computer activity and collect, use, or disclose information
concerning such activity, except--
(1) with the express affirmative consent of the individual;
(2) for the purpose of making such information accessible
to the individual or for use by the individual; or
(3) as provided in section 106.
(d) Limitation.--A third party that receives covered information or
sensitive information from a covered entity pursuant to this section
shall only use such information for the specific purposes authorized by
the individual when the individual granted express affirmative consent
for the disclosure of the information to a third party.
(e) Revocation of Consent.--A covered entity that has obtained the
express affirmative consent of an individual pursuant to this section
and section 105 shall provide the individual with a reasonable means,
without charge, to withdraw consent at any time thereafter.
SEC. 105. MATERIAL CHANGES TO PRIVACY PRACTICES.
(a) Retroactive Application.--A covered entity shall provide the
notice required by section 102 and obtain the express affirmative
consent of the individual prior to making a material change in privacy
practices governing previously collected covered information or
sensitive information from that individual.
(b) Prospective Application.--A covered entity shall not make
material changes to its privacy practices governing the collection,
use, or disclosure of covered information or sensitive information that
has not been previously collected unless, 30 days before the effective
date of the material change--
(1) the covered entity provides individuals with notice of
the material change in accordance with section 102; and
(2) if required by sections 103 and 104, obtains the
individual's consent to the material change or allows the
individual to terminate the individual's relationship with the
covered entity.
SEC. 106. EXCEPTIONS.
The consent requirements of sections 103 and 104 shall not apply to
the following:
(1) Service providers.--
(A) When a covered entity discloses covered
information or sensitive information to a service
provider performing services or functions on behalf of
and under the instruction of the covered entity,
provided--
(i) the covered entity obtained the
required consent for the initial collection of
such information and provided notice as
required by section 102;
(ii) the covered entity enters into a
contractual agreement that prohibits the
service provider from using or disclosing the
information other than to carry out the
purposes for which the information was
disclosed; and
(iii) in such cases, the covered entity
remains responsible and liable for the
protection of covered information and sensitive
information that has been transferred to a
service provider for processing.
(B) When a service provider subsequently discloses
the information to another service provider in order to
perform the same services or functions described in
paragraph (1) on behalf of the covered entity.
(2) Fraud detection.--Collection, use, or disclosure
necessary to protect or defend the rights or property,
including intellectual property, of the covered entity against
actual or potential security threats, fraud, theft,
unauthorized transactions, or other illegal activities.
(3) Imminent danger.--Collection, use, or disclosure
necessary to prevent imminent danger to the personal safety of
an individual or group of individuals.
(4) Compliance with law.--Collection, use, or disclosure
required in order to comply with a Federal, State, or local
law, rule, or other applicable legal requirement, including
disclosures pursuant to subpoena, summons, or other properly
executed compulsory process.
(5) Publicly available information.--Collection, use, or
disclosure of publicly available information, except that a
covered entity may not use publicly available information about
an individual for marketing purposes if the individual has
opted out of the use by such covered entity of covered
information or sensitive information for marketing purposes.
TITLE II--ACCURACY, ACCESS, AND DISPUTE RESOLUTION
SEC. 201. ACCURACY.
(a) Reasonable Procedures.--Each covered entity shall establish
reasonable procedures to assure the accuracy of the covered information
or sensitive information it collects, assembles, or maintains. Not
later than 18 months after the date of the enactment of this Act, the
Commission shall promulgate regulations under section 553 of title 5,
United States Code, to implement this section. In promulgating such
regulations, the Commission shall consider--
(1) the costs and benefits of ensuring the accuracy of the
information;
(2) the sensitivity of the information;
(3) the purposes for which the information will be used;
and
(4) the harms from misuse of the information.
(b) Limited Exception for Fraud Databases.--The requirement in
subsection (a) shall not prevent the collection or maintenance of
information that may be inaccurate with respect to a particular
individual when that information is being collected or maintained
solely--
(1) for the purpose of indicating whether there may be a
discrepancy or irregularity in the covered information or
sensitive information that is associated with an individual;
and
(2) to help identify, or authenticate the identity of, an
individual, or to protect against or investigate fraud or other
unlawful conduct.
(c) Limited Exception for Publicly Available Information.--Subject
to section 202, a covered entity shall not be required to verify the
accuracy of publicly available information if the covered entity has
reasonable procedures to ensure that the publicly available information
assembled or maintained by the covered entity accurately reflects the
information available to the general public.
SEC. 202. ACCESS AND DISPUTE RESOLUTION.
(a) Access and Correction.--A covered entity shall, upon request,
provide an individual with reasonable access to, and the ability to
dispute the accuracy or completeness of, covered information or
sensitive information about that individual if such information may be
used for purposes that could result in an adverse decision against the
individual, including the denial of a right, benefit, or privilege.
(b) Access to Personal Profiles.--
(1) In general.--Subject to title IV, a covered entity
shall, upon request, provide an individual with reasonable
access to any personal profile about that individual that the
entity stores in a manner that makes it accessible in the
normal course of business.
(2) Special rule for preference profiles.--With respect to
a preference profile, the obligation to provide access and
correction under this section is met if the covered entity
provides the ability to review and change the preference
information associated with a unique persistent identifier.
(3) Participation in choice program.--This subsection shall
not apply to a covered entity that participates in a Choice
Program under title IV.
(c) Notice in Lieu of Access.--Subject to subsection (b), in those
instances in which covered information or sensitive information is used
only for purposes that could not reasonably result in an adverse
decision against an individual, including the denial of a right,
benefit, or privilege, a covered entity shall, upon request by an
individual, provide the individual with a general notice or
representative sample of the type or types of information the covered
entity typically collects or stores for such purposes.
(d) Exceptions.--
(1) A covered entity may decline to provide an individual
with access to covered information or sensitive information if
the covered entity reasonably believes--
(A) the individual requesting access cannot
reasonably verify his or her identity as the person to
which the information relates;
(B) access by the individual to the information is
limited by law or legally recognized privilege;
(C) the information is used for a legitimate
governmental or fraud prevention purpose that would be
compromised by such access;
(D) such request for access is frivolous or
vexatious;
(E) the privacy or other rights of persons other
than the individual would be violated; or
(F) proprietary or confidential information,
technology, or business processes would be revealed as
a result.
(2) Where an exception described in paragraph (1) applies
only to a portion of the covered information or sensitive
information maintained by the covered entity, the covered
entity shall provide access required under subsections (a) and
(b) to the information to which the exception does not apply.
(3) A covered entity may decline an individual's request to
correct or amend covered information or sensitive information
pertaining to that individual where--
(A) a reason for denying access to the information
under paragraph (1) would also apply to the request to
correct or amend the information; or
(B) doing so would be incompatible with a legal
obligation, such as a requirement to retain certain
information.
(e) Fees.--A covered entity may charge a reasonable fee, as
determined by the Commission, for providing access in accordance with
subsection (a) or (b).
(f) Time Limit.--A covered entity shall respond to any access,
correction, or amendment request within 30 days after the receipt of
the request. Such response shall consist of one or more of the
following:
(1) The requested information in accordance with subsection
(a) or (b).
(2) The general notice in accordance with subsection (c).
(3) Instructions for accessing, correcting, or amending the
requested information through an automated mechanism.
(4) A confirmation that the requested corrections or
amendments have been made.
(5) A notification that the covered entity is declining to
correct or amend information pursuant to one of the exceptions
described in subsection (d). Such notification shall include
the reason or reasons for not making the suggested correction
or amendment, unless one or more of such exceptions would also
apply to the disclosure of the reason or reasons.
(6) A request to resubmit the access request and an
explanation of why the original access request was deficient in
cases where--
(A) the scope or nature of the request is unclear
or the entity needs more information in order to
respond to the request;
(B) the entity charges a fee as permitted under
subsection (e), and the fee has not been paid; or
(C) the entity provides interested members of the
public other reasonable and accessible instructions for
submitting an access request and such instructions were
not followed.
(7) A notification that additional time is needed where--
(A) the entity cannot reasonably provide a full
response within 30 days after the receipt of the
access; and
(B) the time extension needed for a full response
is no greater than an additional 30 days.
(g) Rule of Construction.--Nothing in this Act creates an
obligation on a covered entity to provide an individual with the right
to delete information.
(h) Additional Requirements Where Correction or Amendment Is
Declined.--If the covered entity declines to correct or amend the
information described in subsection (a), the covered entity shall--
(1) note that the information is disputed, including the
individual's statement disputing such information, and take
reasonable steps to verify such information under the
procedures outlined in section 201 if such information can be
independently verified; and
(2) where the information was obtained from a third party
or is publicly available information, inform the individual of
the source of the information, and if reasonably available,
where a request for correction may be directed, and, if the
individual provides proof that the information is incorrect,
correct the inaccuracy in the covered entity's records.
(i) Other Limitations.--The obligations under this section do not,
by themselves, create any obligation on the covered entity to retain,
maintain, reorganize, or restructure covered information or sensitive
information.
(j) Data Retention Exception.--Covered information or sensitive
information retained by the covered entity for under 30 days, or such
other period of time as the Commission may determine, shall not be
subject to this section.
(k) Rulemaking.--Not later than 18 months after the date of the
enactment of this Act, the Commission shall promulgate regulations
under section 553 of title 5, United States Code, to implement this
section. In addition, the Commission shall promulgate regulations, as
necessary, on the application of the exceptions and limitations in
subsection (d), including any additional circumstances in which a
covered entity may limit access to information under such subsection
that the Commission determines to be appropriate.
TITLE III--DATA SECURITY, DATA MINIMIZATION, AND ACCOUNTABILITY
SEC. 301. DATA SECURITY.
(a) In General.--Each covered entity and service provider shall
establish, implement, and maintain reasonable and appropriate
administrative, technical, and physical safeguards to--
(1) ensure the security, integrity, and confidentiality of
the covered information or sensitive information it collects,
assembles, or maintains;
(2) protect against any anticipated threats, reasonably
foreseeable vulnerabilities, or hazards to the security or
integrity of such information; and
(3) protect against unauthorized access to or use of such
information and loss, misuse, alteration, or destruction of
such information.
(b) Factors for Appropriate Safeguards.--Not later than 18 months
after the date of the enactment of this Act, the Commission shall
promulgate regulations under section 553 of title 5, United States
Code, to implement this section. In promulgating such regulations, the
Commission shall consider--
(1) the size and complexity of an entity;
(2) the nature and scope of the activities of an entity;
(3) the sensitivity of the information;
(4) the current state of the art in administrative,
technical, and physical safeguards for protecting information;
and
(5) the cost of implementing such safeguards.
SEC. 302. ACCOUNTABILITY.
(a) Complaints to the Covered Entity.--A covered entity shall
provide a process for individuals to make complaints concerning the
covered entity's policies and procedures required by this Act.
(b) Privacy Risk Assessment.--A covered entity shall conduct an
assessment of the risks to individuals raised by the collection, use,
and disclosure of covered information or sensitive information prior to
the implementation of commercial projects, marketing initiatives,
business models, applications, and other products or services in which
the covered entity intends to collect, or believes there is a
reasonable likelihood it will collect, covered information or sensitive
information from or about more than 1,000,000 individuals.
(c) Periodic Evaluation of Practices.--A covered entity shall
conduct periodic assessments to evaluate--
(1) whether the covered information or sensitive
information the covered entity has collected is and remains
necessary for the purposes disclosed at the time of collection
pursuant to subsections (c) and (d) of section 101; and
(2) whether the covered entity's ongoing collection
practices are and remain necessary for a legitimate business
purpose.
SEC. 303. DATA MINIMIZATION OBLIGATIONS.
A covered entity that uses covered information or sensitive
information for any purpose shall retain such data only as long as
necessary to fulfill a legitimate business purpose or comply with a
legal requirement.
TITLE IV--SAFE HARBOR AND SELF-REGULATORY CHOICE PROGRAM
SEC. 401. SAFE HARBOR.
A covered entity that participates in, and is in compliance with, 1
or more self-regulatory programs approved by the Commission under
section 402 (in this title referred to as a ``Choice Program''I) shall
not be subject to--
(1) the requirements for express affirmative consent
required under subsection 104(a) for the specified uses of
covered information addressed by the Choice Program as
described in section 403(1)(A);
(2) the requirement of access to information under section
202(b); or
(3) liability in a private right of action brought under
section 604.
SEC. 402. APPROVAL BY THE FEDERAL TRADE COMMISSION.
(a) Initial Approval.--Not later than 270 days after the submission
of an application for approval of a Choice Program under this section,
the Commission shall approve or decline to approve such program. The
Commission shall only approve such program if the Commission finds,
after notice and comment, that the program complies with the
requirements of section 403.
(b) Approval of Modifications.--The Commission shall approve or
decline to approve any material change in a Choice Program previously
approved by the Commission within 120 days after submission of an
application for approval by such program. The Commission shall only
approve such material change if the Commission finds, after notice and
comment, that the proposed change complies with the requirements of
section 403.
(c) Duration.--A Choice Program approved by the Commission under
this section shall be approved for a period of 5 years.
(d) Appeals.--Final action by the Commission on a request for
approval, or the failure to act within 270 days on a request for
approval, submitted under this section may be appealed to a district
court of the United States of appropriate jurisdiction as provided for
in section 706 of title 5, United States Code.
SEC. 403. REQUIREMENTS OF SELF-REGULATORY PROGRAM.
To be approved as a Choice Program under this section, a program
shall--
(1) provide individuals with--
(A) a clear and conspicuous opt-out mechanism that,
when selected by the individual, prohibits all covered
entities participating in the Choice Program from
disclosing covered information to a third party for 1
or more specified uses, and may offer individuals a
preference management tool that will enable an
individual to make more detailed choices about the
transfer of covered information to a third party; and
(B) a clear and conspicuous mechanism to set
communication preferences, online behavioral
advertising preferences, and such other preferences as
the Choice Program may determine, subject to the
approval of the Commission, that when selected by the
individual, applies the individual's selected
preferences to all covered entities participating in
the Choice Program; and
(2) establish--
(A) procedures for reviewing applications by
covered entities to participate in the Choice Program;
(B) procedures for periodic assessment of its
procedures and for conducting periodic random
compliance testing of covered entities participating in
such Choice Program;
(C) consequences for failure to comply with program
requirements, such as public notice of the covered
entity's noncompliance, suspension, or expulsion from
the program, or referral to the Commission for
enforcement; and
(D) guidelines and procedures requiring a
participating covered entity to provide equivalent or
greater protections for individuals and their covered
information and sensitive information as are provided
under titles I and II.
SEC. 404. RULEMAKING.
Not later than 18 months after the date of enactment of this Act,
the Commission shall promulgate regulations under section 553 of title
5, United States Code, to implement this section and to provide
compliance guidance for entities seeking to be approved under this
title, including regulations--
(1) establishing criteria for the submission of the
application, including evidence of how the Choice Program will
comply with the requirements of section 403;
(2) establishing criteria for opt-out mechanisms and
communication preferences, online behavioral advertising
preferences, or other preferences meeting the requirements of
this title;
(3) establishing consequences for failure to comply with
the requirements of section 403, such as public notice of the
Choice Program's noncompliance and suspension or revocation of
the Commission's approval of such Program as described in
section 402;
(4) allowing for and promoting continued evolution and
innovation in privacy protection, meaningful consumer control,
simplified approaches to disclosure, and transparency;
(5) providing additional incentives for self-regulation by
covered entities to implement the protections afforded
individuals under titles I and II of this Act; and
(6) providing that a covered entity will be considered to
be in compliance with the requirements of titles I and II of
this Act and the regulations issued under such titles if that
covered entity complies with guidelines or requirements of a
Choice Program approved under section 402.
TITLE V--EXEMPTIONS
SEC. 501. USE OF AGGREGATE OR DEIDENTIFIED INFORMATION.
(a) General Exclusion.--Subject to subsections (b) and (c), nothing
in this Act shall preclude a covered entity from collecting, using, or
disclosing--
(1) aggregate information; or
(2) covered information or sensitive information from which
identifying information has been obscured or removed using
reasonable and appropriate methods such that the remaining
information does not identify, and there is no reasonable basis
to believe that the information can be used to identify--
(A) the specific individual to whom such covered
information relates; or
(B) a computer or device owned or used by a
specific individual.
(b) Reasonable Procedures for Disclosure.--If a covered entity
discloses the information described in paragraphs (1) and (2) of
subsection (a) to a third party, the covered entity shall take
reasonable steps to protect such information, including, in the case of
the information described in such paragraph (2), not disclosing the
algorithm or other mechanism used to obscure or remove the identifying
information, and obtaining satisfactory written assurance that the
third party will not attempt to reconstruct the identifying
information.
(c) Prohibition on Reconstructing or Revealing Identifying
Information.--
(1) In general.--It shall be unlawful for any person to
reconstruct or reveal the identifying information that has been
removed or obscured (as described in subsection (a)(2)).
(2) Rulemaking.--Not later than 18 months after the date of
the enactment of this Act, the Commission shall promulgate
regulations under section 553 of title 5, United States Code,
to establish exemptions to this subsection. In promulgating
such regulations, the Commission shall consider--
(A) the purposes for which such identifying
information may need to be reconstructed or revealed;
(B) the size and sensitivity of the data set; and
(C) public policy issues such as health, safety,
and national security.
SEC. 502. ACTIVITIES COVERED BY OTHER FEDERAL PRIVACY LAWS.
Except as provided expressly in this Act, this Act shall have no
effect on activities covered by any of the following:
(1) Title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801
et seq.).
(2) The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.).
(3) The Health Insurance Portability and Accountability Act
of 1996 (Public Law 104-191).
(4) Part C of title XI of the Social Security Act (42
U.S.C. 1320d et seq.).
(5) Section 222 or 631 of the Communications Act of 1934
(47 U.S.C. 222; 551).
(6) The Children's Online Privacy Protection Act of 1998
(15 U.S.C. 6501 et seq.).
(7) The CAN-SPAM Act of 2003 (15 U.S.C. 7701 et seq.).
(8) Chapter 119, 121, or 206 of title 18, United States
Code.
TITLE VI--APPLICATION AND ENFORCEMENT
SEC. 601. GENERAL APPLICATION.
The requirements of this Act shall only apply to those persons over
which the Commission has authority pursuant to section 5(a)(2) of the
Federal Trade Commission Act (15 U.S.C. 45(a)(2)). Notwithstanding any
provision of such Act or any other provision of law, common carriers
subject to the Communications Act of 1934 (47 U.S.C. 151 et seq.) and
any amendment thereto shall be subject to the jurisdiction of the
Commission for purposes of this Act.
SEC. 602. ENFORCEMENT BY THE FEDERAL TRADE COMMISSION.
(a) Unfair or Deceptive Acts or Practices.--A violation of titles
I, II, or III shall be treated as an unfair and deceptive act or
practice in violation of a regulation under section 18(a)(1)(B) of the
Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)) regarding unfair
or deceptive acts or practices.
(b) Powers of Commission.--The Commission shall enforce this Act in
the same manner, by the same means, and with the same jurisdiction,
powers, and duties as though all applicable terms and provisions of the
Federal Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated
into and made a part of this Act. Any person who violates this Act or
the regulations issued under this Act shall be subject to the penalties
and entitled to the privileges and immunities provided in that Act.
(c) Rulemaking Authority.--
(1) Rulemaking.--The Commission may, in accordance with
section 553 of title 5, United States Code, issue such
regulations it determines to be necessary to carry out this
Act.
(2) Authority to grant exceptions.--The regulations
prescribed under paragraph (1) may include such additional
exceptions to titles I, II, III, IV, and V of this Act as the
Commission considers consistent with the purposes of this Act.
(3) Limitation.--In promulgating rules under this Act, the
Commission shall not require the deployment or use of any
specific products or technologies, including any specific
computer software or hardware.
SEC. 603. ENFORCEMENT BY STATE ATTORNEYS GENERAL.
(a) Civil Action.--In any case in which the attorney general of a
State, or an official or agency of a State, has reason to believe that
an interest of the residents of that State has been or is threatened or
adversely affected by any person who violates this Act, the attorney
general, official, or agency of the State, as parens patriae, may bring
a civil action on behalf of the residents of the State in an
appropriate district court of the United States--
(1) to enjoin further violation of this Act by the
defendant;
(2) to compel compliance with this Act; or
(3) for violations of titles I, II, or III of this Act, to
obtain civil penalties in the amount determined under
subsection (b).
(b) Civil Penalties.--
(1) Calculation.--For purposes of calculating the civil
penalties that may be obtained under subsection (a)(3)--
(A) with regard to a violation of title I, the
amount determined under this paragraph is the amount
calculated by multiplying the number of days that a
covered entity is not in compliance with such title, or
the number of individuals for whom the covered entity
failed to obtain consent as required by such title,
whichever is greater, by an amount not to exceed
$11,000; and
(B) with regard to a violation of title II or III,
the amount determined under this paragraph is the
amount calculated by multiplying the number of days
that a covered entity is not in compliance with such
title or titles by an amount not to exceed $11,000.
(2) Adjustment for inflation.--Beginning on the date that
the Consumer Price Index for All Urban Consumers is first
published by the Bureau of Labor Statistics that is after 1
year after the date of enactment of this Act, and each year
thereafter, the amounts specified in subparagraphs (A) and (B)
of paragraph (1) shall be increased by the percentage increase
in the Consumer Price Index published on that date from the
Consumer Price Index published the previous year.
(3) Maximum total liability.--Notwithstanding the number of
actions which may be brought against a person under this
section the maximum civil penalty for which any person may be
liable under this section shall not exceed--
(A) $5,000,000 for any related series of violations
of title I; and
(B) $5,000,000 for any related series of violations
of title II and title III.
(4) Effect of participation in choice program.--If a
covered entity participates in a Choice Program established
under title IV and cures the alleged violation of title I or II
in a reasonable period of time after receiving notice of the
alleged violation, such conduct shall be taken into
consideration by a State or a court in determining the amount
of civil penalties under this subsection.
(c) Intervention by the FTC.--
(1) Notice and intervention.--The State shall provide prior
written notice of any action under subsection (a) to the
Commission and provide the Commission with a copy of its
complaint, except in any case in which such prior notice is not
feasible, in which case the State shall serve such notice
immediately upon instituting such action. The Commission shall
have the right--
(A) to intervene in the action;
(B) upon so intervening, to be heard on all matters
arising therein; and
(C) to file petitions for appeal.
(2) Limitation on state action while federal action is
pending.--If the Commission has instituted a civil action for
violation of this Act, no attorney general of a State, or
official, or agency of a State, may bring an action under this
section during the pendency of that action against any
defendant named in the complaint of the Commission for any
violation of this Act alleged in the complaint.
(d) Construction.--For purposes of bringing any civil action under
subsection (a), nothing in this Act shall be construed to prevent an
attorney general of a State from exercising the powers conferred on the
attorney general by the laws of that State to--
(1) conduct investigations;
(2) administer oaths or affirmations; or
(3) compel the attendance of witnesses or the production of
documentary and other evidence.
SEC. 604. PRIVATE RIGHT OF ACTION.
(a) In General.--A covered entity, other than a covered entity that
participates in and is in compliance with a Choice Program established
under title IV, who willfully fails to comply with sections 103 or 104
of this Act with respect to any individual is liable to that individual
in a civil action brought in a district court of the United States of
appropriate jurisdiction in an amount equal to the sum of--
(1) the greater of any actual damages of not less than $100
and not more than $1,000;
(2) such amount of punitive damages as the court may allow;
and
(3) in the case of any successful action under this
section, the costs of the action together with reasonable
attorney's fees as determined by the court.
(b) Limitation.--A civil action under this section may not be
commenced later than 2 years after the date upon which the claimant
first discovered or had a reasonable opportunity to discover the
violation.
SEC. 605. EFFECT ON OTHER LAWS.
(a) Preemption of State Laws.--This Act supersedes any provision of
a statute, regulation, or rule of a State or political subdivision of a
State, with respect to those entities covered by the regulations issued
pursuant to this Act, that expressly requires covered entities to
implement requirements with respect to the collection, use, or
disclosure of covered information addressed in this Act.
(b) Additional Preemption.--
(1) In general.--No person other than a person specified in
section 603 or 604 may bring a civil action under the laws of
any State if such action is premised in whole or in part upon
the defendant violating any provision of this Act.
(2) Protection of state consumer protection laws.--This
subsection shall not be construed to limit the enforcement of
any State consumer protection law by an attorney general or
other official of a State.
(c) Protection of Certain State Laws.--This Act shall not be
construed to preempt the applicability of--
(1) State laws that address the collection, use, or
disclosure of health information or financial information;
(2) State laws that address notification requirements in
the event of a data breach;
(3) State trespass, contract, or tort law; or
(4) other State laws to the extent that those laws relate
to acts of fraud.
(d) Preservation of FTC Authority.--Nothing in this Act may be
construed in any way to limit or affect the Commission's authority
under any provision of law.
(e) Rule of Construction Relating to Required Disclosures to
Government Entities.--This Act shall not be construed to expand or
limit the duty or authority of a covered entity, service provider, or
third party to disclose covered information or sensitive information to
a government entity under any provision of law.
TITLE VII--MISCELLANEOUS PROVISIONS
SEC. 701. REVIEW.
Not later than 5 years after the effective date of the regulations
initially issued under this Act, the Commission shall--
(1) review the implementation of this Act, including the
effect of the implementation of this Act on practices relating
to the collection, use, and disclosure of covered information
and sensitive information; and
(2) prepare and submit to Congress a report on the results
of the review under paragraph (1).
SEC. 702. CONSUMER AND BUSINESS EDUCATION CAMPAIGN.
Beginning on the effective date of this Act as set forth in section
703, the Commission shall--
(1) conduct a consumer education campaign to inform
individuals of the rights and protections afforded by this Act
and the steps that individuals can take to affirmatively
consent or decline consent to the collection, use, and
disclosure of information under this Act and the regulations
issued pursuant to this Act; and
(2) provide guidance to businesses regarding their
obligations under this Act, including guidance on how to
participate in a Choice Program approved under title IV.
SEC. 703. EFFECTIVE DATE.
This Act shall take effect 2 years after the date of the enactment
of this Act. The Commission may stay enforcement of this Act for such
period of time as the Commission determines necessary to allow for the
establishment and Commission approval of a Choice Program under title
IV and for covered entities to commence participation in such a
program.
SEC. 704. SEVERABILITY.
If any provision of this Act, or the application thereof to any
person or circumstance, is held unconstitutional or otherwise invalid,
the validity of the remainder of the Act and the application of such
provision to other persons and circumstances shall not be affected
thereby.
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