Data breach notification bill could weaken consumer protections

Legislation that would require businesses across the U.S. to notify affected customers after a data breach is headed toward a vote on the floor of the House of Representatives even though some digital rights groups say the bill will actually weaken protections for consumers.

The Data Security and Breach Notification Act, approved by the House Energy and Commerce Committee Wednesday, would pre-empt stronger breach notification laws in several states and would eliminate data protections of telecom account records, several consumer and digital rights groups said.

The bill is “weaker than the data security and breach notification standards that consumers currently enjoy under stronger state laws and existing federal law,” Laura Moy, senior policy counsel of the New America Foundation’s Open Technology Institute, said by email. “We aren’t opposed to efforts to establish a uniform national standard for data security and breach notification, but the new standard shouldn’t be weaker than the status quo.”

Business and tech groups have pushed Congress for years to pass a national data breach notification bill, saying it’s difficult for companies to comply with the 51 existing state and territorial breach notification laws. The push for a national law received a boost in January, when President Barack Obama called on Congress to pass a bill.

The Republican-controlled committee voted 29-20 along party lines to advance the data breach bill to the House floor. After listening to objections to the bill, Democratic co-sponsor Peter Welch of Vermont voted against it.

The bill would eliminate data security and breach notification requirements that apply to text message histories, cable and satellite viewing histories, and some health information, Moy said. It would also prevent the Federal Communications Commission from continuing its enforcement of data security and breach notification standards with telecom providers, she added.

Just last week, the FCC announced a $25 million settlement with AT&T after workers at overseas call centers sold customer records to criminals who attempted to use the customer information to unlock stolen mobile phones.

Committee Republicans defended the defended the data breach bill and said they are still negotiating with critics on possible changes to the bill. The bill was written with “substantial” input from Democrats and affected industries, said Representative Marsha Blackburn, a Tennessee Republican and main sponsor of the bill. With dozens of major breaches in recent months, Congress needs to pass the bill, she said.

“Consumers want assurances that their data and their virtual you will be protected in cyberspace,” Blackburn said in a statement. “The American people are asking Congress to take some action and provide some clarity.”

Moy and other critics of the bill testified before the committee in March. A week ago, the Open Technology Institute, Consumers Union, the Electronic Frontier Foundation and nine other groups outlined their concerns in a letter to the committee.

The bill would “do more harm than good” to consumers whose information have been stolen in a breach, the groups wrote.