White House releases draft bill to protect consumer data privacy

White House releases draft bill to protect consumer data privacy

WASHINGTON (Reuters) - The White House released draft legislation on Friday that would give consumers more control over how the trail of data they leave behind them on the internet is used, stored and sold.

The 24-page "discussion draft" on data privacy immediately sparked sharp reaction from the technology industry, which said the proposal would hurt innovation, and also from privacy advocacy groups that said it did not go far enough.

President Barack Obama has made cyber security a major focus in the wake of high-profile hacks at companies such as Sony Pictures Anthem Inc and Target Corp.

Obama has also proposed legislation to help the government and private sector more readily share cyber attack data, a new national standard requiring companies to tell consumers about data breaches within 30 days, and new protections for student data.

Obama has come under fire from privacy groups and technology companies alike after leaks from former contractor Edward Snowden revealed the extent of government surveillance online.

The data privacy bill would codify a voluntary "Consumer Privacy Bill of Rights" the White House created in 2012.

"Even though responsible companies provide us with tools to control privacy settings and decide how our personal information is used, too many Americans still feel they have lost control over their data," the White House said in a statement.

It would allow industries to develop codes of conduct, overseen by the Federal Trade Commission. The codes would provide "safe harbor" to companies abiding by them.

The Federal Trade Commission would have the authority to enforce the law, and could seek fines of up to $25 million or injunctions for infractions. State attorneys general also could enforce the law in some cases.

The Center for Digital Democracy, a consumer privacy organization, called the bill "a serious setback for privacy" because it relies on industry-created codes.

The Consumer Electronics Association, a lobby group for consumer technology companies, also panned the bill.

"The proposal's broad definitions, expanded bureaucratic authorities and steep penalties could burden the tech economy with uncertainty and stifle the development of the Internet of Things," the group said in a release.

A Commerce Department official said the draft tried to strike a balance between protecting privacy and giving businesses flexibility.

"We want to advance President Obama’s framework for protecting consumer privacy by bringing all parties to the table to further discuss how we effectively apply privacy protections in the digital age," said Lawrence Strickling, administrator of the National Telecommunications and Information Administration.

(Reporting by Roberta Rampton. Additional reporting by Alina Selyukh. Editing by Andre Grenon)