New York Privacy Act draws industry disapproval

State Sen. Kevin Thomas scored a legislative victory on Wednesday as the state Senate passed his SHIELD Act – a long-stalled bill that would expand reporting requirements of data breaches and strengthen cybersecurity regulations for businesses. But earlier this week, another of Thomas’ attempts at strengthening data privacy protections drew a more controversial response.

The New York Privacy Act builds on landmark consumer data protection laws like the European Union’s General Data Protection Regulation and the California Consumer Privacy Act. But as Wired points out, the New York Privacy Act would go further than those laws in some ways, including by giving New Yorkers the right to sue companies directly for privacy violations, and requiring companies to act as “data fiduciaries,” meaning that a company wouldn’t be able to sell any user data to a third party without express consumer consent, or use their data in a way that is not in the consumer’s best interest.

The bill has garnered support from privacy advocates who say that the regulations are needed in the wake of the millions of people affected by data breaches.

Perhaps unsurprisingly, the legislation drew criticism from some experts with tech industry interests. During a joint hearing of the state Senate’s committees on consumer protection, and internet and new technology, those critics raised the aforementioned concerns, while also bringing up the debate over whether privacy regulation should be a state issue or a federal one. “While we recognize the need for increased data privacy regulation, these types of regulations should generally be enacted on the federal level,” said Zachary Hecht, policy director at Tech:NYC. “Simply put, the internet transcends state borders, and a state-by-state patchwork of regulations creates a complex compliance regime and makes it difficult, if not impossible, for small companies to compete.”

State Sen. John Liu argued that waiting for Congress may not be the wisest choice. “Congress is sometimes slow to act, so sometimes states – especially, we like to think, the state of New York – act before, and perhaps gets Congress to move a little quicker,” he said. Hecht and others later said that they would still have the same objections if the bill, as written now, were enacted at the federal level.

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