US tech companies demand federal data privacy law

USA flag and Constitution close up.

If there is a pantomime villain in the ongoing global internet privacy crisis which many governments around the world are wrestling with, it is the big tech companies.

They are the ones who are hoovering up personal data to profit from and it is they who are creating the new data capitalism model which seems to be driving economic growth and innovation these days.

So, it will perhaps come as something of a surprise to learn that no fewer than 50 of these big tech companies have written to senior US Congressmen this week to plead for the introduction of a federal data privacy law in the USA.

On the face of it, these companies appear to be biting off their nose to spite their face. But, of course, there is method in their apparent madness. After all, companies like Google and Amazon are motivated first and foremost, by their share price.

The Business Roundtable letter

The letter in question was sent on behalf of a business group called Business Roundtable which is made up of the CEOs of many of the USA’s largest companies. It is signed by no fewer than 51 CEO’s includes those from Amazon, AT&T, Dell, IBM, Qualcomm, SAP, Salesforce, Visa, Mastercard, JP Morgan Chase, State Farm, and Walmart.

While Google and Facebook are not signatories to this letter, they have made precisely the same in recent congressional hearings on this topic.

The letter certainly isn’t arguing for anything new. As awareness of online privacy has grown in the USA, both the public and big business have been calling for legislation.

Several congressmen have put forward legislation which has failed to attract sufficient support, At the same time, the use of VPNs by privacy-conscious internet users has grown significantly.

The question many people are asking is why big tech companies are lobbying government to regulate them. After, it usually works the other way round.

State and Federal privacy laws

In the USA, there are two different levels of law. Federal laws are agreed in Congress and the Senate and then signed off by the President. These apply to the whole USA. But there are also state laws, which are enacted locally and only apply to individual states.

In the absence of a federal data privacy law in the USA, a number of states have passed their own privacy laws. This creates a problem for big tech companies for several reasons.

Firstly, every state privacy law is likely to set slightly different requirements and standards which tech companies have to comply with. This creates a fragmented market with many different and often competing rules. It is therefore hard for tech companies to stay compliant everywhere.

Then there is the issue of influence. At a Federal level, big tech companies know that they can influence regulation and legislation by lobbying Congress and the Senate. And they do. It is estimated that the likes of Google, Facebook and Amazon spent US$65 million lobbying Congress in 2018.

Having that level of influence over state laws is much more complicated, resource-intensive, and ultimately costly. Instead of lobbying two legislatures, they have fifty to deal with.

All about influence rather than privacy

This is the primary motivation behind the Business Roundtable letter. For all of the rhetoric about protecting consumers and giving them clarity, the main reason businesses want Federal legislation is because it makes their lives easier.

A Federal Data Privacy law would override any state laws and be something they would be confident of shaping in the first instance and being able to amend subsequently.

Some would even go so far as to suggest that big tech companies would be likely to have a hand in writing such a law from scratch.

Any such law would obviously end up being in their favour. It would either be weak enough to allow them to continue harvesting user data freely or so packed full of loopholes that it becomes practically unenforceable without long and costly litigation. And big tech has a much bigger legal budget than any consumer advocacy groups out there.

The good news for US internet users is that a federal data privacy law doesn’t look likely to be on the agenda anytime soon. Certainly, no action is expected to be taken this year, which is no doubt why this letter has been sent now.

But it will come eventually and when it does, US internet users should be prepared. Supporting advocacy groups who will stand up for their rights is worthwhile as is communicating your own views on data privacy to your Congressman or Senator.

But the best thing you can do is sign up for a VPN to ensure that, regardless of what a federal data privacy law looks like, you can be sure that all your internet traffic is encrypted and secure.

David Spencer

Author: David Spencer

David is VPNCompare's News Editor. Anything going on in the privacy world and he's got his eye on it. He's also interested in unblocking sports allowing him to watch his favourite football team wherever he is in the world.

Away from writing, he enjoys reading and politics. He is currently learning Mandarin too... slowly.

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