Privacy Draft 5-10
Privacy Draft 5-10
H. R. ll
111TH CONGRESS
1ST SESSION
Ml. llllll introduced the following bill; which was referred to the
Committee on llllllllllllll
A BILL
To require notice to and consent of an individual prior to
the collection and disclosure of certain personal informa-
tion relating to that individual.
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1 (1) ADVERTISEMENT NETWORK.—The term
2 ’‘‘advertisement network’’ means an entity that pro-
3 vides advertisements to participating websites on the
4 basis of individuals’ activity across some or all of
5 those websites.
6 (2) AGGREGATE INFORMATION.—The term ‘‘ag-
7 gregate information’’ means data that relates to a
8 group or category of services or individuals, from
9 which all information identifying an individual has
10 been removed.
11 (3) COMMISSION.—The term ‘‘Commission’’
12 means the Federal Trade Commission.
13 (4) COVERED ENTITY.—The term ‘‘covered en-
14 tity’’—
15 (A) means a person engaged in interstate
16 commerce that collects data containing covered
17 information; and
18 (B) does not include—
19 (i) a government agency; or
20 (ii) any person that collects covered
21 information from fewer than 5,000 individ-
22 uals in any 12-month period and does not
23 collect sensitive information.
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1 (5) COVERED INFORMATION.—The term ‘‘cov-
2 ered information’’ means, with respect to an indi-
3 vidual, any of the following:
4 (A) The first name or initial and last
5 name.
6 (B) A postal address.
7 (C) A telephone or fax number.
8 (D) An email address.
9 (E) Unique biometric data, including a fin-
10 gerprint or retina scan.
11 (F) A Social Security number, tax identi-
12 fication number, passport number, driver’s li-
13 cense number, or any other government-issued
14 identification number.
15 (G) A Financial account number, or credit
16 or debit card number, and any required security
17 code, access code, or password that is necessary
18 to permit access to an individual’s financial ac-
19 count.
20 (H) Any unique persistent identifier, such
21 as a customer number, unique pseudonym or
22 user alias, Internet Protocol address, or other
23 unique identifier, where such identifier is used
24 to collect, store, or identify information about a
25 specific individual or a computer, device, or
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1 software application owned or used by a par-
2 ticular user or that is otherwise associated with
3 a particular user.
4 (I) A preference profile.
5 (J) Any other information that is collected,
6 stored, used, or disclosed in connection with any
7 covered information described in subparagraphs
8 (A) through (I).
9 (6) FIRST PARTY TRANSACTION.—The term
10 ‘‘first party transaction’’ means an interaction be-
11 tween an entity that collects covered information
12 when an individual visits that entity’s website or
13 place of business and the individual from whom cov-
14 ered information is collected.
15 (7) OPERATIONAL PURPOSE.—
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1 service, including security attacks, unau-
2 thorized transactions, and fraud;
3 (iii) analyzing data related to use of
4 the product or service for purposes of opti-
5 mizing or improving the covered entity’s
6 products, services, or operations;
7 (iv) carrying out an employment rela-
8 tionship with an individual;
9 (v) disclosing covered information
10 based on a good faith belief that such dis-
11 closure is necessary to comply with a Fed-
12 eral, State, or local law, rule, or other ap-
13 plicable legal requirement, including disclo-
14 sures pursuant to a court order, subpoena,
15 summons, or other properly executed com-
16 pulsory process; and
17 (vi) disclosing covered information to
18 a parent company of, controlled subsidiary
19 of, or affiliate of the covered entity, or
20 other covered entity under common control
21 with the covered entity where the parent,
22 subsidiary, affiliate, or other covered entity
23 operates under a common or substantially
24 similar set of internal policies and proce-
25 dures as the covered entity, and the poli-
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1 cies and procedures include adherence to
2 the covered entity’s privacy policies as set
3 forth in its privacy notice.
4 (B) EXCLUSION.—Such term shall not in-
5 clude the use of covered information for mar-
6 keting, advertising, or sales purposes, or any
7 use of or disclosure of covered information to
8 an unaffiliated party for such purposes.
9 (8) PREFERENCE PROFILE.—The term ‘‘pref-
10 erence profile’’ means a list of information, cat-
11 egories of information, or preferences associated
12 with a specific individual or a computer or device
13 owned or used by a particular user that is main-
14 tained by or relied upon by a covered entity.
15 (9) RENDER ANONYMOUS.—The term ‘‘render
16 anonymous’’ means to remove or obscure covered in-
17 formation such that the remaining information does
18 not identify, and there is no reasonable basis to be-
19 lieve that the information can be used to identify—
20 (A) the specific individual to whom such
21 covered information relates; or
22 (B) a computer or device owned or used by
23 a particular user.
24 (10) SENSITIVE INFORMATION.—The term
25 ‘‘sensitive information’’ means any information that
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1 is associated with covered information of an indi-
2 vidual and relates to that individual’s––
3 (A) medical records, including medical his-
4 tory, mental or physical condition, or medical
5 treatment or diagnosis by a health care profes-
6 sional;
7 (B) race or ethnicity;
8 (C) religious beliefs;
9 (D) sexual orientation;
10 (E) financial records and other financial
11 information associated with a financial account,
12 including balances and other financial informa-
13 tion; or
14 (F) precise geolocation information.
15 (11) SERVICE PROVIDER.—The term ‘‘service
16 provider’’ means an entity that collects, maintains,
17 processes, stores, or otherwise handles covered infor-
18 mation on behalf of a covered entity, including, for
19 the purposes of serving as a data processing center,
20 providing customer support, serving advertisements
21 to the website of the covered entity, maintaining the
22 covered entity’s records, or performing other admin-
23 istrative support functions for the covered entity.
24 (12) TRANSACTIONAL PURPOSE.—The term
25 ‘‘transactional purpose’’ means a purpose necessary
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1 for effecting, administering, or enforcing a trans-
2 action between a covered entity and an individual.
3 (13) UNAFFILIATED PARTY.—The term ‘‘unaf-
4 filiated party’’ means any entity that is not related
5 by common ownership or affiliated by corporate con-
6 trol with a covered entity.
7 SEC. 3. NOTICE AND CONSENT REQUIREMENTS FOR THE
9 ERED INFORMATION.
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1 entity collects covered information through
2 the Internet, the privacy notice required by
3 this section shall be—
4 (I) posted clearly and conspicu-
5 ously on the website of such covered
6 entity through which the covered in-
7 formation is collected; and
8 (II) accessible through a direct
9 link from the Internet homepage of
10 the covered entity.
11 (ii) MANUAL COLLECTION OF INFOR-
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1 (ii) A description of any covered infor-
2 mation collected by the covered entity.
3 (iii) How the covered entity collects
4 covered information.
5 (iv) The specific purposes for which
6 the covered entity collects and uses covered
7 information.
8 (v) How the covered entity stores cov-
9 ered information.
10 (vi) How the covered entity may
11 merge, link, or combine covered informa-
12 tion collected about the individual with
13 other information about the individual that
14 the covered entity may acquire from unaf-
15 filiated parties.
16 (vii) How long the covered entity re-
17 tains covered information in identifiable
18 form.
19 (viii) How the covered entity disposes
20 of or renders anonymous covered informa-
21 tion after the expiration of the retention
22 period.
23 (ix) The purposes for which covered
24 information may be disclosed, and the cat-
25 egories of unaffiliated parties who may re-
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1 ceive such information for each such pur-
2 pose.
3 (x) The choice and means the covered
4 entity offers individuals to limit or prohibit
5 the collection and disclosure of covered in-
6 formation, in accordance with this section.
7 (xi) The means by and the extent to
8 which individuals may obtain access to cov-
9 ered information that has been collected by
10 the covered entity in accordance with this
11 section.
12 (xii) A means by which an individual
13 may contact the covered entity with any in-
14 quiries or complaints regarding the covered
15 entity’s handling of covered information.
16 (xiii) The process by which the cov-
17 ered entity notifies individuals of material
18 changes to its privacy notice in accordance
19 with paragraph (4).
20 (xiv) A hyperlink to or a listing of the
21 Commission’s online consumer complaint
22 form or the toll-free telephone number for
23 the Commission’s Consumer Response
24 Center.
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1 (xv) The effective date of the privacy
2 notice.
3 (3) OPT-OUT CONSENT REQUIREMENTS.—
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1 (B) ADDITIONAL OPTIONS AVAILABLE.—A
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1 section shall not apply to covered information
2 that—
3 (i) is collected by any means that does
4 not utilize the Internet, as described in
5 paragraph (2)(A)(ii); and
6 (ii)(I) is collected for a transactional
7 purpose or an operational purpose; or
8 (II) consists solely of information de-
9 scribed in subparagraphs (A) through (D)
10 of section 2(5) and is part of a first party
11 transaction.
12 (B) EXEMPTION FROM CONSENT REQUIRE-
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1 (1) IN GENERAL.—A covered entity may not
2 sell, share, or otherwise disclose covered information
3 to an unaffiliated party without first obtaining the
4 express affirmative consent of the individual to
5 whom the covered information relates.
6 (2) WITHDRAWAL OF CONSENT.—A covered en-
7 tity that has obtained express affirmative consent
8 from an individual must provide the individual with
9 the opportunity, without charge, to withdraw such
10 consent at any time thereafter.
11 (3) EXEMPTION FOR CERTAIN INFORMATION
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1 (c) EXPRESS CONSENT FOR COLLECTION OR DIS-
2 CLOSURE OF SENSITIVE INFORMATION.—A covered entity
3 shall not collect or disclose sensitive information from or
4 about an individual for any purpose unless such covered
5 entity—
6 (1) makes available to such individual the pri-
7 vacy notice described in subsection (a)(2) prior to
8 the collection of any sensitive information; and
9 (2) obtains the express affirmative consent of
10 the individual to whom the sensitive information re-
11 lates prior to collecting or disclosing such sensitive
12 information.
13 (d) EXPRESS CONSENT FOR COLLECTION OR DIS-
14 CLOSURE OF ALL OR SUBSTANTIALLY ALL OF AN INDI-
15 VIDUAL’S ONLINE ACTIVITY.—A covered entity shall not
16 collect or disclose covered information about all or sub-
17 stantially all of an individual’s online activity, including
18 across websites, for any purpose unless such covered enti-
19 ty—
20 (1) makes available to such individual the pri-
21 vacy notice described in subsection (a)(2) prior to
22 the collection of the covered information about all or
23 substantially all of the individual’s online activity;
24 and
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1 (2) obtains the express affirmative consent of
2 the individual to whom the covered information re-
3 lates prior to collecting or disclosing such covered in-
4 formation.
5 (e) EXCEPTION FOR INDIVIDUAL MANAGED PREF-
6 ERENCE PROFILES.—Notwithstanding subsection (b), a
7 covered entity may collect, use, and disclose covered infor-
8 mation if—
9 (1) the covered entity provides individuals with
10 the ability to opt out of the collection, use, and dis-
11 closure of covered information by the covered entity
12 using a readily accessible opt-out mechanism where-
13 by, the opt-out choice of the individual is preserved
14 and protected from incidental or accidental deletion,
15 including by—
16 (A) website interactions on the covered en-
17 tity’s website or a website where the preference
18 profile is being used;
19 (B) a toll-free phone number; or
20 (C) letter to an address provided by the
21 covered entity;
22 (2) the covered entity deletes or renders anony-
23 mous any covered information not later than 18
24 months after the date the covered information is
25 first collected;
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1 (3) the covered entity includes the placement of
2 a symbol or seal in a prominent location on the
3 website of the covered entity and on or near any ad-
4 vertisements delivered by the covered entity based on
5 the preference profile of an individual that enables
6 an individual to connect to additional information
7 that—
8 (A) describes the practices used by the cov-
9 ered entity or by an advertisement network in
10 which the covered entity participates to create
11 a preference profile and that led to the delivery
12 of the advertisement using an individual’s pref-
13 erence profile, including the information, cat-
14 egories of information, or list of preferences as-
15 sociated with the individual that may have led
16 to the delivery of the advertisement to that indi-
17 vidual; and
18 (B) allows individuals to review and mod-
19 ify, or completely opt out of having, a pref-
20 erence profile created and maintained by a cov-
21 ered entity or by an advertisement network in
22 which the covered entity participates; and
23 (4) an advertisement network to which a cov-
24 ered entity discloses covered information under this
25 subsection does not disclose such covered informa-
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1 tion to any other entity without the express affirma-
2 tive consent of the individual to whom the covered
3 information relates.
4 SEC. 4. ACCURACY AND SECURITY OF COVERED INFORMA-
6 PAIGN.
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1 (D) in the event of a security breach, de-
2 termine the scope of the breach, make every
3 reasonable attempt to prevent further unauthor-
4 ized access to the affected covered information,
5 and restore reasonable integrity to the affected
6 covered information.
7 (2) FACTORS FOR APPROPRIATE SAFE-
21 TION.
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1 SEC. 6. USE OF LOCATION-BASED INFORMATION.
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1 tions Act of 1934, that address subscriber privacy;
2 and
3 (2) how those provisions may be harmonized
4 with the provisions of this Act to create a consistent
5 regulatory regime for covered entities and individ-
6 uals.
7 SEC. 8. ENFORCEMENT.
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1 that Act. Notwithstanding any provision of the Fed-
2 eral Trade Commission Act or any other provision of
3 law and solely for purposes of this Act, common car-
4 riers subject to the Communications Act of 1934 (47
5 U.S.C. 151 et seq.) and any amendment thereto
6 shall be subject to the jurisdiction of the Commis-
7 sion.
8 (3) RULEMAKING AUTHORITY AND LIMITA-
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1 patriae, may bring a civil action on behalf of the
2 residents of the State in a district court of the
3 United States of appropriate jurisdiction to—
4 (A) enjoin further violation of such section
5 by the defendant;
6 (B) compel compliance with such section;
7 (C) obtain damage, restitution, or other
8 compensation on behalf of residents of the
9 State; or
10 (D) obtain such other relief as the court
11 may consider appropriate.
12 (2) INTERVENTION BY THE FTC.—
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1 (B) LIMITATION ON STATE ACTION WHILE
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1 under State law (including a pendent State claim to an
2 action under Federal law).
3 SEC. 10. PREEMPTION.
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1 (b) COMMISSION AUTHORITY.—Nothing contained in
2 this Act shall be construed to limit authority provided to
3 the Commission under any other law.
4 SEC. 12. EFFECTIVE DATE.
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