Online Privacy Bill Clears Early Hurdle in House

WASHINGTON—Bipartisan legislation to establish broad privacy rights for consumers won approval from a House subcommittee on Thursday, adding to its momentum.

Lawmakers approved the bill, the American Data Privacy and Protection Act, on a voice vote with no dissent. It now moves to the full Energy and Commerce Committee for a vote. The bill still faces a long and potentially difficult path, particularly in the Senate.

Rep.

Frank Pallone

(D., N.J.), the committee chairman and a sponsor of the bill, termed it “a massive step forward.”

“Every American knows it is long past time for Congress to protect their data privacy and security,” he said. “The modern world demands it.”

Republicans also praised the legislation, while suggesting more changes might be needed.

“This bill protects all Americans, regardless of ZIP Code, and provides certainty for businesses so they clearly understand their obligations,” said Rep.

Cathy McMorris Rodgers

(R., Wash.), the committee’s top Republican.

She said the legislation also would strengthen national security by requiring companies such as TikTok—owned by Beijing-based ByteDance Ltd.—to specify when they are transferring and storing consumers’ data in countries such as China.

But several members said further refinement would be needed on aspects of the bill, such as its provisions for private lawsuits over violations.

Rep. Cathy McMorris Rodgers (R., Wash.) says the legislation would strengthen national security.


Photo:

Bill Clark/Zuma Press

In broad terms, the legislation would put new limits on how businesses—especially large technology companies—can collect and use consumers’ data. Big tech companies would be limited to collecting, processing and transferring only the data that is reasonably necessary to provide their services. Individuals would have the right to access, correct, delete and export data covered by the legislation. And for some sensitive categories of data, such as geolocation data or biometric information, the bill would prohibit transfer or restrict it to very limited circumstances.

Individuals could opt out of targeted advertising, as well as the transfer of any covered data to a third party.

The legislation also includes antidiscrimination protections, and requires large data holders, such as online advertising companies to try to limit harms that might arise when algorithms process data to make decisions. One recent example of lawmakers’ concerns in this area is a federal case alleging racial and other forms of discrimination in housing ads on

Facebook,

which parent company Meta Platforms Inc. settled this week without admitting liability.

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For children, the bill would create new protections. It would prohibit targeted advertising aimed at users under the age of 17, and all data related to individuals under 17 would be considered sensitive and subject to tougher restrictions.

The legislation would provide for enforcement by the Federal Trade Commission and state attorneys general. It also would allow for consumer lawsuits over violations in some circumstances—a concern for some industry groups—although those provisions wouldn’t take effect for several years.

Thursday’s strong vote suggests the legislation could move quickly through the House. The Senate remains a bigger question.

The chairwoman of the Senate Commerce Committee, Sen.

Maria Cantwell

(D., Wash.), has criticized the House bill as too weak and advanced her own proposal. “For American consumers to have meaningful privacy protection, we need a strong federal law that is not riddled with enforcement loopholes,” she said in a recent statement.

Her Republican counterpart, Sen.

Roger Wicker

(R., Miss.) has actively supported the House effort. At a committee meeting this week he urged Ms. Cantwell “to focus more intently on reaching bipartisan compromise on core priorities.”

Write to John D. McKinnon at john.mckinnon@wsj.com

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