Thomas Chadenet Blog Post

Thomas Chadenet

Information Privacy Law

Professor Ira Rubinstein

March 28, 2017

On Thursday, March 23rd, the U.S. Senate voted on a resolution to repeal a set of rules aimed to protect consumers’ online data from Internet service providers (ISP).

Under this set of rules, ISP would have had to disclose to consumers what information is being collected and how it is used or shared. For sensitive information, such as financial information, health information, web browsing history and geolocalisation, ISP would have needed to obtain consumer consent before using their online datas. Consumers would have been able to forbid ISP from sharing sensitive information by denying them their explicit consent.

This regulation was adopted by the Federal Communication Commission (FCC) in October, 2016 under President Obama term. It was supposed to enter into effect on March, 2nd but the new FCC chairman, Ajit Pai, decided not to enforce these rules.  Finally, in a 50-48 vote, the Republican Senate decided to definitely repeal these rules that would have regulate ISP conduct. This joint resolution came from Senator Jeff Flake (Republican).

The new FCC chairman, nominated by Republican President Donald Trump said in October that these rules would give websites such as Google, Netflix or Facebook an unfair advantage. These Websites are ruled by a laxer set of privacy rules overseen by the Federal Trade Commission (FTC). Internet companies like Google don’t have to ask users’ permission to gather information about their online habits.

Consequently, there is an asymmetry in terms of regulation of companies that are in the same space. ISP like Comcast, AT&T and Verizon are currently racing to become online advertising giants as big as Facebook or Google. Having to get permission from customers to use their browsing histories would make it more difficult to create stronger ad businesses. With these information, ISP could sell targeted advertising or share this information with third party. Therefore, industry group welcomed the vote by the Senate. Without these FCC rules, ISP will be able to harvest more datas and then try to dominate the digital advertising sphere.

Consumer and privacy group condemned the resolution voted by the Senate. Neema Singh Giuliani, legislative counsel for the American Civil Liberties Union, said in a statement that “it is extremely disappointing that the Senate voted today to sacrifice the privacy rights of Americans in the interest of protecting the profits of major Internet companies, including Comcast, AT&T, and Verizon.” Democratic Senator Ed Markey argued that, “Republicans have just made it easier for American’s sensitive information about their health, finances and families to be used, shared, and sold to the highest bidder without their permission.”

After the vote at the Senate, the resolution will still need to go in front of the House of the Representative. It will then need to be signed by President Trump to become law. If it does, it would also prevent the FCC from setting similar rules again. The resolution was voted under the Congressional Review Act which allows Congress to overturn federal agencies regulations (such as the FCC). After a vote, federal agencies cannot adopt new rules to would be closely similar to the one overturned.

Jonathan Schwantes, senior policy counsel for advocacy group Consumers Union, concluded by saying that the vote “is a huge step in the wrong direction, and it completely ignores the needs and concerns of consumers.”