In an era where personal data is a valuable asset, the United States stands at a crossroads. The need for a national privacy law continues to grow. On April 7 of this year, two U.S. lawmakers from different parties introduced draft legislation for the American Privacy Rights Act (APRA), which, if enacted, promises to revolutionize how organizations handle personal information. Yet, while the introduction of APRA is a step in the right direction, the urgency for its passage cannot be overstated, nor can the challenges it currently faces be ignored.

The imperative for a national privacy law

Consistency and manageability

The current state-level approach to data privacy in the US is a patchwork of regulations creating inconsistencies and complexities for businesses operating across multiple states. Most states have their own sets of laws, making compliance a daunting task. A national privacy law would streamline these regulations, providing a consistent framework that theoretically simplifies compliance for businesses and enhances protection for consumers.

Interstate operability

The fragmented legal and regulatory landscape hinders interstate commerce and technological innovation. Companies must navigate varying state laws, which may slow down their ability to innovate and deploy new technologies such as open banking. A unified national privacy law would remove these barriers, fostering a more dynamic and integrated market.

Global trade relations

As international data protection standards rise, the US risks falling behind regions with robust privacy laws, such as the European Union’s General Data Protection Regulation (GDPR). To remain competitive in the global market, the US must align its privacy standards with those of other leading economies. This alignment will facilitate smoother international trade and data transfers, ensuring that American businesses are not disadvantaged.

Consumer trust and rights

In an age where data breaches and misuse of personal information are rampant, a national privacy law could enhance consumer trust. APRA aims to provide comprehensive rights to data subjects, including the right to access, correct, and delete their data. These protections are crucial for building consumer confidence in how their data is handled. Currently, some states offer these rights, some do not.

Current challenges facing APRA

Despite its potential benefits and despite bi-partisan support, the passage of APRA is not without significant hurdles.

State law preemption

One of the most contentious issues is whether federal law should preempt state laws. Many states, like California with its California Consumer Privacy Act (CCPA), have enacted stringent privacy laws. There is concern that a federal law might dilute these protections, leading to resistance from states wishing to maintain their own higher standards.

Private right of action

The provision that allows individuals to sue companies for privacy violations is another sticking point. While this empowers consumers to hold organizations accountable, it is fiercely opposed by many businesses that fear a surge in litigation. Finding a balance between protecting consumer rights and avoiding excessive legal burdens on businesses is a complex challenge.

Stakeholder disagreement

The interests of various stakeholders—ranging from big tech companies to privacy advocacy groups and state governments—are often conflicting. Reaching a consensus that satisfies all parties is a formidable task. Each group has its own priorities and concerns, which makes the legislative process protracted and complicated.

Legislative timing

The timing of APRA’s introduction is also critical. Election years typically slow down legislative processes, and with the next election cycle looming, there is a risk that the bill could be delayed or sidelined. Prompt action is required to maintain momentum and ensure that the bill does not get lost in the political shuffle.

What's next

The American Privacy Rights Act is a pivotal moment for data privacy in the U.S. The need for a national privacy law is clear, driven by the demands for consistency, manageability, interstate operability, enhanced global trade relations, and stronger consumer trust. However, the road to its enactment is challenging and faces hurdles such as state law preemption, the private right of action, stakeholder disagreements, and legislative timing.

For the U.S. to remain competitive and protect its citizens' privacy rights effectively, passing a national privacy law like APRA sooner rather than later is imperative. The coming months will be crucial in determining whether the U.S. can overcome these challenges and establish a unified approach to data privacy that meets the needs of both consumers and businesses in the digital age.

In an upcoming post, I’ll provide a summary of the current proposal for the APRA, which will discuss covered entities, rights provided to consumers, and timelines for enactment.

Tess Frazier Class
Tess Frazier

Tess Frazier is the Chief Compliance Officer at Class. She’s built her career in education technology and believes a strong compliance, data privacy, and security program benefits everyone.

Tess Frazier Class
Tess Frazier

Tess Frazier is the Chief Compliance Officer at Class. She’s built her career in education technology and believes a strong compliance, data privacy, and security program benefits everyone.

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