Why are tech companies suddenly pushing a federal online privacy law?

Aug 31, 2018

Back in June, California passed the strictest online privacy law in the country, set to go into effect in 2020. The law would, among other things, require companies to be more transparent about what data they collect and why, tell people whom they're sharing it with and let consumers delete personal information. The United States has no federal online privacy laws. But some tech companies are so worried about the effects of California's law that they're now asking for nationwide rules. Molly Wood talked to New York Times technology reporter Cecilia Kang about what California's law means for tech companies. The following is an edited transcript of their conversation.

Cecilia Kang: What California does oftentimes sets the standard for the rest of the country. Other nations use what California is doing as a blueprint. And what would happen for the internet on privacy is if these internet companies are forced to abide by a California law, they have in place essentially standards that would become, de facto, their normal standard across the company for any users.

Molly Wood: Right. And then the other thing that you wrote this week is that tech companies are taking their lobbying efforts and trying to get ahead of the California law by potentially lobbying for federal privacy regulations, which they have been staunchly against up until now. Why are they doing that now?

Kang: It's a real sea change. Ostensibly, it's a sea change for the tech industry to embrace and even to propose their own versions of privacy laws on the federal level. But California's passage of its own privacy law in June changed everything. Facebook, Google, IBM, Microsoft and other companies are arguing for a federal law with two specifically very important components. No. 1: That any federal law pre-empts or essentially nullifies a state law. And No. 2: That these laws are voluntary. And what that means is that a company would be able to volunteer to hold up certain principles on privacy, but they wouldn't be forced to, like the California law mandates.

Wood: It's funny because you would never think of federal regulation in this way, but it sounds like, for these tech companies, a federal regulation is almost a Hail Mary for them.

Kang: Yeah. A federal regulation that is very light touch that they can have a lot of say in is in some ways a Hail Mary, but it's a very strategic effort. And it shows that the tech companies, particularly the internet companies, are willing to work with regulators on this. And I think especially at this time when they're under so much pressure, especially the social media companies, it really is important for the companies to show, or at least to appear, that they're working hard to be an ally and cooperative with government.