Congress Should Pass a Federal Data-Privacy Law Without Backing Away From Light-Touch Regulation, Says ITIF’s Castro in House Testimony

WASHINGTON—Ahead of a House Administration Committee hearing Wednesday on “Big Data: Privacy Risks and Needed Reforms in the Public and Private Sectors,” the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy, released the following statement from ITIF Vice President Daniel Castro, who was among the witnesses scheduled to testify:

U.S. data privacy is at a crossroads. Many consumers are justifiably frustrated by the frequency with which they learn about new data breaches and the seeming lack of accountability for those who misuse personal information. At the same time, many businesses are overwhelmed by the tsunami of new data-protection obligations they face and the growing restrictions on how they can use personal information.

The United States needs a federal data-privacy law, but it should not back away from the light-touch approach it has historically taken to regulating the digital economy. Instead of pursuing a broad, European-style data-privacy law that would impose significant costs on the U.S. economy, Congress should craft targeted legislation that creates a national privacy framework that establishes basic consumer data rights, preempts state laws, ensures reliable enforcement, streamlines regulation, and minimizes the impact on innovation.

In testimony provided to the committee in advance, Castro argued why Congress should pass data-privacy legislation, what that legislation should look like, and how the United States can avoid the mistakes made in the EU’s General Data Protection Regulation and other data-privacy laws.

Underscoring the urgency of passing federal data-privacy legislation swiftly, Castro cited new econometric research from ITIF showing that, absent a federal law, a growing patchwork of state privacy laws could impose between $98 billion and $112 billion in out-of-state costs on businesses annually. Over a 10-year period, these costs would exceed $1 trillion, with at least $200 billion of the burden falling on small businesses.

• Read Castro’s testimony (PDF).
• Watch the hearing February 16 at 2:00 p.m. EST.