Proposed Kerry-McCain Online Privacy Bill Could Kill Innovation

Proposed Kerry-McCain Online Privacy Bill Could Kill Innovation


This week, Senators John Kerry (D-MA) and John McCain (R-AZ) plan to introduce “online privacy bill of rights” legislation that would require companies to seek permission before sharing a user’s data with third parties.  The bill would also give consumers the right to view any data collected on them.  The bipartisan bill would cover personal financial, medical and other electronic data.

The Kerry-McCain bill would create the nation’s first comprehensive privacy law governing data in all industries.  Currently, only certain personal data is protected.

The bill is expected to be introduced ahead of a Senate Commerce Committee hearing this Wednesday regarding online privacy.  While several lawmakers have been mulling over enacting a comprehensive privacy bill for several months now, the issue really came to light a few months ago when it was revealed that several smartphone apps shared users’ personal information with advertising companies without the user’s consent.

Needless to say, the technology and application development industries are not necessarily happy about this bill, and not just because it would limit their ability to make money off their apps from advertisers.  Some say the law could be over inclusive and could slow down the technological aspect of processing certain applications, software and programs.   The practical impact of a law that would require approval for the collection of electronic data yield a slowing down of ingenuity.

“This is not a small fix. This is not a small problem. It’s complex, ” said York Eggleston, Founder and Chair of the National Association of Multicultural Digital Entrepreneurs.  “There is a trade off of consumer privacy for consumer benefits and most folks do not understand where that line is and what they are trading off.”  Many apps are free because developers recoup costs and make money off of ad revenues.  Removing their ability to sell ads could mean higher fees for apps for consumers.

Also, though the details of the bill have yet to be revealed, the law could also strip an application or software developer’s ability to encode passive data mining, a process that enables the efficient running of several innovative applications already in the works and yet to be designed.

Eggleston said the best technology is that which can take personal information and apply  it in real time. “That is what separates the good from the grit,” he said.  “Requiring manual opting-in  can slow down technology tremendously,” he added.

Politico’s “Morning Tech” obtained a copy of the working draft with language that allows for an opt-out standard on personally identifiable information that’s not sensitive, and an opt-in feature when the data is especially sensitive.  The bill would require users to opt in to any data transferred to third parties unless the company using the information is part of a safe-harbor set up approved by the FTC, in which case it would be an opt-out standard.  The bill would  also empower Attorney Generals and federal regulators to seek civil penalties when companies do serious wrong, but does not give consumers a private right of action to sue independently a company that violates the law.

Further, the law, while well-intended to empower consumers, could have the unintended consequence of impeding the White House’s goals of winning the future, encouraging innovation, rewarding developers and the brightest thinkers and minimizing the government intrusion and regulation that can impede these goals.

That message is what some of those attending this week’s hearing may articulate to lawmakers.

“I just hope the hearing is inclusive of people who understand technology and can thoroughly articulate what’s at stake in all this, ” Eggleston added.  “There are market based solutions that can solve these concerns that do not need to be regulated which simply another layer of having to monitor more sites and can stagnate advancement.”

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Jeneba Jalloh Ghatt represents small, women, and minority owned business and technology companies at The Ghatt Law Group LLC, the nations’ first communications law firm owned by women and minorities. She's won landmark cases on behalf of her clients which include national civil rights and public interest organizations. In addition to actively authoring several blogs, being a radio show host and sitting on the boards of three non-profits, she is a tech junkie who has been developing online web content since the very early years of the Internet, 1991 to be precise! Follow her on Twitter at @Jenebaspeaks, on her blog, Jenebaspeaks, which covers the intersection of politics and technology or on her Politics of Raising Children blog at The Washington Times Communities section. The ideas and opinions expressed in this article are solely those of the author, and have complete editorial independence from any Politic365 partners, sponsors, or advertisers. For additional information about Politic365, please visit


  1. Why McCain? Last I heard he doesn't even understand technology. I would hate to lose ground on such important and innovative technology just because someone doesn't understand how everything works….McCain!!!!

  2. Even though this bill might not be perfect, it could serve as a starting point for much-needed dialogue on this complex and evolving issue. Getting privacy policies right will be difficult, but the hardest part will likely be egaging stakeholders in rational, solution-focused and forward-looking discussions.

    • John: I believe in rational, solution-focused and forward-looking discussions. I simply do not trust other people that I do not know with my personal information; make sense? Rational?

      Malcolm W. Henley

    • Jumper: In my humble opinion "Data Mining" of personal information should be illegal, period! The Miner's motives are seldom if ever good.

      Malcolm W. Henley

  3. I agree with John_Q_Public — it's not perfect, but it forces dialogue about a very important and increasingly relevant issue. I hope Congress can come together on this one and find a way to protect our rights and our privacy as equally as possible.

  4. My privacy equals my freedom to me.

    Would you want someone coming in your house and going through all your drawers without asking you first, never!!

    I am tired of all the greedy people and companies trying to explain to me why taking my personal information without my knowledge or consent is good for me, BS!

    I am a financially conservative person but I will gladly pay any price to protect my privacy.

    Malcolm W. Henley

    p.s. I am also tired of them asking me to login to make a comment so they can get my personal information, make sense