Congressional efforts to pass a national data privacy law could face a major obstacle: California’s powerful bloc of House Democrats.
That’s because many California Democrats are happy with their home state’s new privacy law, which is tougher than what Republicans in Congress seem likely to entertain. And those same Democrats are wary of giving Republicans a chance to pass federal legislation that weakens California’s rules, which could set a de facto national standard if left alone.
“California’s bill is the best. Why would we want to preempt it?” Rep. Jackie Speier (D-Calif.) told POLITICO. “I would look askance at any measure that tried to preempt it … I would hope that all 53 members [of California’s House delegation] would oppose it.”
The California Consumer Privacy Act, passed and signed into law last year, gives internet users more control over, and information about, how big companies collect and use their data. It allows the state to fine companies for violations and, under certain circumstances, lets individual Californians sue companies for failing to keep their data secure. The law doesn’t go into effect until 2020, but it already has the backing of many Democratic lawmakers at the federal level, particularly those from the California delegation.
That could be a problem for nascent efforts to pass a federal privacy bill — a goal that members of both parties have set for this year. In fact, the California law’s 2020 effective date amounts to a natural deadline for GOP lawmakers to quash state-level privacy protections.
Democrats have been critical of any proposal to override state privacy laws since talk of a federal law began in earnest last year. Some lawmakers, like Sen. Ed Markey (D-Mass.), have indicated that their opposition to state-law preemption could be a bargaining chip — they might accede to it if Republicans agree to beef up the Federal Trade Commission’s enforcement powers.
Lately, however, California Democrats have been firmer in their outright opposition to crafting any federal law that either overrides or does anything short of replicating, and possibly expanding upon, their state’s law. That push threatens to disrupt otherwise bipartisan and broadly supported talks that have gained urgency amid a barrage of data scandals in Silicon Valley.
Several California Democrats, including key Silicon Valley representatives like Ro Khanna and Anna Eshoo and Tony Cárdenas of San Fernando Valley, told POLITICO that the state’s rules should form the floor for any federal effort.
“It is a concern among the Californians. There is no question about it,” Rep. Jan Schakowsky (D-Ill.), who chairs the House Energy and Commerce consumer protection subcommittee, said of the GOP push to preempt state measures like California’s.
And Schakowsky said the delegation is not alone in its skepticism of preemption efforts, which come as several other states weigh their own data privacy proposals. “I am generally against preemption because it’s really often an excuse to water down whatever states are doing,” she said.
Rep. Frank Pallone (D-N.J.), who chairs the full committee, was also critical of preemption. “I always prefer not to,” he said.
House Speaker Nancy Pelosi (D-Calif.), as a member of the delegation, could be another factor to watch. Although a spokesman confirms she “wants a privacy bill that will put consumers nationwide back in control of their information,” the aide cautioned against diminishing any state authority: “States have been at the vanguard of protecting Americans. All Americans have benefited from state privacy and data breach laws, so their role as policy innovator and law enforcer must be respected.”
Members of both parties acknowledged that the preemption question is among the thorniest under discussion in legislative talks, which have already stalled relative to optimistic early projections. Senate negotiators had hoped to unveil a data privacy draft bill early in 2019, but week after week has slipped by without any release. The negotiators now say it’s unlikely a draft emerges by the end of February, when both Senate and House panels will hold their first hearings on the topic.
The negotiations could prove far messier if California’s Democratic representatives buck any deal to override the California law. Most negotiators closest to these efforts do not represent California, and lawmakers like Speier and some others may be reluctant to accept any emerging deal, potentially resetting talks just as consensus seems to be emerging.
“I’m always concerned about the California Democrats,” said Sen. Jerry Moran (R-Kan.), a lead Senate negotiator participating in a bipartisan working group on privacy. Moran is one of several Republican lawmakers to voice support for efforts to override state laws like California’s. “You have to have national preemption,” he said.
The Republicans who will have to negotiate a deal on privacy, including House E&C committee and consumer protection subcommittee ranking members Greg Walden of Oregon and Cathy McMorris Rodgers of Washington, said they view national overriding standards as important. At stake, they said, is regulatory certainty for a wide swath of companies. Republicans argue that the internet transcends state borders and thus merits a national set of privacy safeguards.
Walden, acknowledging pressure from California’s delegation on preemption, said he doesn’t blame the lawmakers for their position. “They want to rightly defend their law,” he said in an interview. And while he said Congress should “build off” what California has done, he suggested the law was rushed and problematic and would create a problem for industry if implemented.
Democratic leaders both inside and outside California, meanwhile, are facing pressure from advocacy groups and state leaders to protect the state’s sweeping privacy safeguards.
Alastair Mactaggart, who launched a California ballot initiative that paved the way for the state’s privacy law, has met with lawmakers on Capitol Hill in recent weeks to lobby on privacy. He told POLITICO he plans to ramp up outreach efforts to California lawmakers to urge them not to preempt the state law with a weaker national statute.
“I do want to start making efforts to try to get people to contact their representatives and say, ‘Hey, look: You, California, absolutely decide the fate of this thing,’” he said during an interview. And within California, there’s bipartisan interest in protecting the law. Earlier this week a group of Republican state lawmakers from California urged Capitol Hill committee leaders not to preempt state laws.
The next several months will test how much sway California and the federal lawmakers representing the state may hold on the Democratic caucus writ large. As some members, from Pallone to Sen. Richard Blumenthal (D-Conn.), seem wary of a preemption provision generally, California’s influence could tip the scales on what sort of bill they would be willing to support — and whether Republicans and Democrats eventually land on the same page.
“Preemption’s always been a tough issue, particularly [when] the federal government hasn’t done anything and some states have provided leadership like California,” said Rep. Peter Welch (D-Vt.), an E&C panel member who has entertained a bargain involving preemption. “There’s a lot of respect for what California has done and how it’s taken the lead.”