What Advertisers Need to Know About the Federal Privacy Law

JUN 15, 2022

Yesterday, lawmakers and stakeholders discussed finer details of the federal privacy bill draft, which was unveiled earlier this month, showing some momentum on a long-promised effort to give people in the U.S. more control over their personal information.

“Nearly every week, there’s a new story about location data being packaged and sold,” said Caitriona Fitzgerald, deputy director, Electronic Privacy Information Center at the review of the federal privacy bill by the House Committee on Energy & Commerce.

For decades, tech companies have tracked people online and sold their data to marketers, sometimes without their consent. While companies have continued to innovate, Congress has struggled to keep pace. While there’s scope for discussion on what the bill should contain, specific provisions, like hiring privacy officers and giving people the right to file class-action lawsuits, are going to leave the tech industry with considerable increases in compliance costs.

The bill called the American Data Privacy and Protection Act (ADPPA), is slated to go into effect 180 days or six months after passing. There is less likelihood for the bill to pass before the midterm election slated for November, however, Congress is currently collecting feedback on this bill. Experts predict the bill to become law within the following year.

For the time-poor marketer, here are some of the key details in the bill.

People can file a private right of action

The ADPPA gives Americans the right over their privacy, including the right to sue tech companies that violate it. This comes as a blow to the tech industry that has long fought such provisions in state-wide privacy laws. However, this doesn’t go into effect until four years after the law is passed.

There’s a good chance that “lobbyists are going to try and water down parts,” said Stephanie Liu, privacy and marketing analyst at Forrester.

Nonetheless, the ad industry can expect an increase in the cost of compliance with this rule.

“This Act will have a burdensome effect on small businesses, given the costs that will be required for compliance, especially with the private right of action,” said Sundeep Kapur, senior associate at Orrick, Herrington & Sutcliffe’s DATA Practice.

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Trishla is Adweek's tech policy reporter.