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States to weigh in on Net privacy rules

Industry Standard

(IDG) -- A coalition of state attorneys general is preparing to tell Congress that it shouldn't pass any new privacy laws that preempt state laws.

A Dec. 11 draft letter written by a special privacy task force established last June by the National Association of Attorneys General urges federal lawmakers not to hobble the state attorneys general by pre-empting state statutes. It also says that any new federal law should contain provisions allowing for state-based enforcement. A final letter soon will be sent to Congress. INFOCENTER
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The prospects for a new federal online privacy law in 2001 look good. A big reason is that the states have been aggressive in safeguarding online privacy under their consumer-protection laws. The private sector, fearful of 50 potential conflicting privacy regimes, has started to bargain on Capitol Hill. Its main thrust is for Congress to include provisions that would make any new federal law preempt state laws. Some of the leading bills that floated around Capitol Hill in the last Congress contained such provisions. Last week, the AeA, a leading high-tech trade group, unveiled its "Privacy Principles for Federal Preemption Legislation." AeA President William Archey said in a statement that such a law "should play a crucial role in ensuring consistency and certainty" in the marketplace.

State officials disagree, however.

"Denying the states the ability to develop solutions neither advances the goal of an open, competitive marketplace, nor serves the best interests of consumers," the draft letter stated. "Experience shows that consumers have benefited from a system that allows states to pursue their own laws and remedies, with concurrent enforcement by federal agencies."

Even as Congress has dithered on online privacy, many of the states have been policing it actively by using existing consumer-protection laws and proposing new ones. Several states, including Michigan and New York, continue to investigate DoubleClick jointly, even after the Federal Trade Commission announced Monday that it was closing its own investigation of the company's data-handling practices. Dozens of states joined to oppose defunct e-retailer Toysmart's abortive plan to sell its customer data after the company filed for bankruptcy last year.

The draft letter from the attorneys general sets forth a series of principles "as a foundation for federal privacy legislation dealing with personally identifiable information and financial information collected and disseminated on- and offline." The principles include distributing clear and conspicuous privacy notices to consumers and getting consumers' consent to use their personally identifying information for purposes other than that for which it was collected.

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