Legislature(2021 - 2022)GRUENBERG 120
02/07/2022 01:30 PM House JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HB159 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 159 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 159-CONSUMER DATA PRIVACY ACT
1:31:55 PM
CHAIR CLAMAN announced that the only order of business would be
CS FOR HOUSE BILL NO. 159(L&C), "An Act establishing the
Consumer Data Privacy Act; establishing data broker registration
requirements; making a violation of the Consumer Data Privacy
Act an unfair or deceptive trade practice; and providing for an
effective date."
1:32:29 PM
REPRESENTATIVE ZACK FIELDS, Alaska State Legislature, introduced
HB 159, on behalf of the sponsor, the House Rules Standing
Committee, by request of the governor. He noted that the House
Labor and Commerce Standing Committee had spent considerable
time refining the language in the bill. To address the buying
and selling of personal data, he said that data privacy and
enforcement policies were reviewed. He stated that the
administration has no further comment on the current version of
the bill before the committee.
REPRESENTATIVE FIELDS drew attention to slide 2 of the
PowerPoint presentation, titled "HB 159 PowerPoint Presentation
2.7.2022.pdf" [hard copy included in the committee packet] and
summarized the information presented, which read as follows
[original punctuation provided]:
? Duty of data brokers and businesses to inform
consumers they will be collecting their data, and
requiring their consent.
? CSHB 159 creates four consumer rights governing the
collection and use of their personal data:
-The right to request what information was collected.
-The right to request a list of who that data was
shared with.
-The right to request that certain information not be
shared, sold or disclosed.
- The right to request for their information to be
deleted.
? It adds protections for the data of minors: those 13
and younger must have a parent or guardian opt-in for
them or give explicit consent to their information
being collected.
? Provisions included for enforcement and enactment of
those rights.
? Protections for bona fide businesses not engaged in
sale, disclosure of information.
? Allows for consumers to use a global privacy signal
or control
REPRESENTATIVE FIELDS noted that the House Labor and Commerce
Standing Committee had received testimony from bankers,
insurance companies, and logistics companies. These entities
expressed concern that the proposed legislation would
appropriately target companies that buy and sell data. Also,
these stakeholders suggested that unnecessary regulations be
avoided, as this could result in lawsuits against those not
engaged in the buying and selling of data.
1:36:14 PM
REPRESENTATIVE FIELDS cited Article I, Section 22 of the Alaska
State Constitution, which read "The right of the people to
privacy is recognized and shall not be infringed. The
legislature shall implement this section." He pointed out that
technological changes and the exchange of data have changed
considerably since the drafting of the constitution. He
explained that some of the world's largest technology companies
are engaged in egregious buying and selling of data. He added
that data brokers' practices have been documented and described
as "parasitic" by whistleblowers.
1:38:03 PM
REPRESENTATIVE FIELDS explained that data brokers claim that
data collection is anonymous; however, journalists have revealed
that aggregation of data could de-anonymize the collected data
and risk individual safety. He provided a hypothetical example
of how an individual may be tracked. He pointed out that a
correlation exists between teen anxiety, suicide, and the use of
social media products. He shared an animation in the
presentation which depicted how journalists at the New York
Times had tracked a Department of Defense official by using
publicly available information. He pointed out the risks that
individuals face [if their data is sold], such as restraining
orders, stalking, domestic violence, and sexual assault, as
these instances have been documented. He expressed the opinion
that consumers should be permitted to decide whether to disclose
personal data to technology companies. He noted that other
states have legislation regarding data privacy, and the original
bill was modeled on California's legislation. This included the
private right of action for enforcement, consumer rights, and
employment protections. He stated that the proposed
legislation's economic threshold differs for companies [per the
law in California]. For the proposed legislation, data brokers
would be limited to receiving only 50 percent of their revenue
from data collection. This would be in relation to the data of
more than 100,000 people. He added that all other companies
would not be subject to the proposed law.
REPRESENTATIVE FIELDS explained that the private right of action
[for consumers] is included in the language. He expressed the
opinion that no attorney in Alaska has the expertise to litigate
against a company, such as Facebook; however, aggrieved parties
would be eligible to file a class-action lawsuit. He expressed
the need for expertise in this area of law within Alaska.
REPRESENTATIVE FIELDS stated that enforcement of the proposed
legislation would include the establishment of a user fee which
would be based on a consumer-privacy account within the general
fund. This would be used to build expertise within the
Department of Law for enforcement.
REPRESENTATIVE FIELDS read from slide 12, which listed the
stakeholders who had been consulted in the drafting of the bill.
This included privacy advocates and members of the business
community to ensure a regulatory burden would be avoided.
1:47:21 PM
MAUREEN MAHONEY, Senior Policy Analyst, Consumer Reports,
provided invited testimony in support of HB 159. She stated
that no federal law exists to protect the privacy and security
of personal data. She stated that irresponsible data practices
exist, and laws should be required. She argued that HB 159
would provide strong consumer protections, while limiting the
information companies can collect to only what is reasonably
necessary to provide services to consumers. This contrasts with
the current practice of companies that offer disclosures with
incomprehensible privacy practices. She expressed the opinion
that the proposed bill is better than those in other states,
which are based on opt-out models. This results in consumers
being required to opt out with hundreds or thousands of
individual companies. She expressed approval of the definitions
in the proposed legislation, as laws exist in other states with
definitions which allow companies to disregard the opt-out
provision. She characterized the enforcement provisions as
"strong."
1:49:48 PM
REPRESENTATIVE DRUMMOND questioned the consumer data privacy
policies in other states which are considered "strong," and she
asked Representative Fields whether a small population in a
state would impact the market.
REPRESENTATIVE FIELDS responded that California passed data
privacy laws several years ago and has made changes each year
since. He offered to follow up to the committee with the exact
year in which California enacted its law. He pointed out that
the presentation illustrates the laws in California, Colorado,
Florida, and Virginia. He added that there is no pending
federal legislation for data privacy protections; therefore, it
is the prerogative of the states to enact policies. He
suggested that small states would be able to establish strong
polices with positive impacts.
REPRESENTATIVE FIELDS, in response to a question from
Representative Eastman, stated that the bill is sponsored by the
House Rules Standing Committee, on behalf of the governor. In
response to a follow-up question, he answered that the House
Labor and Commerce Standing Committee adopted a committee
substitute during its hearing of the bill, and this is the
reason for the current bill title.
REPRESENTATIVE EASTMAN asked how the protections proposed in the
bill compare to those in other states.
1:54:37 PM
The committee took a brief at-ease.
1:55:03 PM
MS. MAHONEY answered that, in her view, HB 159 would be the
strongest commercial privacy bill in the United States. She
pointed out that the provision in the bill which limits data
collection to what is necessary for companies to provide
services is stronger than the law in California. She also
characterized the enforcement provisions as "strong." She
stated that Virginia and Colorado have passed an opt-out policy
which is "weaker" than the provision proposed in HB 159.
REPRESENTATIVE EASTMAN asked whether companies would be
disincentivized from doing business in Alaska because of the
small population size of Alaska coupled with the strongest data-
privacy legislation.
REPRESENTATIVE FIELDS answered that no concerns had been raised
by members of the industry, and he described the provisions as
"common sense." He suggested that increased consumer confidence
would benefit the marketplace.
REPRESENTATIVE KURKA acknowledged that a need for the bill
exists and expressed his concern that the bill may be "over the
top" due to its length.
REPRESENTATIVE FIELDS stated that technology has advanced faster
than the laws governing data. He suggested that the number of
companies involved in data collection has grown.
2:01:06 PM
CHAIR CLAMAN opened public testimony on HB 159.
2:01:36 PM
MICHAEL WARENECKE, Chief Counsel, Entertainment Software
Association, stated that the Entertainment Software Association
is a trade group for the video game industry. He stated that
the industry has long prioritized privacy for children by
complying with the federal Children's Online Privacy Protection
Act (COPPA). He stated that COPPA regulates the collection of
data for children under the age of 13. He suggested that HB 159
should be changed to make it clear businesses should not process
data from a consumer under the age of 15, unless it is in
conformity with COPPA. Also, he suggested changing the
"constructive knowledge" standard to one of "actual knowledge."
He recommended parental consent provisions should align more
with COPPA.
2:04:39 PM
DAVID EDMONSON, Vice President of State Policy, TechNet,
testified in opposition to HB 159. He acknowledged that his
testimony had been prepared in response to the original draft of
the bill, and he has not taken into consideration the committee
substitute before the committee. He requested that the bill be
amended to align with and maintain interoperability with federal
regulations because of the borderless nature of the internet.
He recommended the same consistency in the laws in Virginia and
Colorado. He noted that the regulations enacted in California
have been subject to rule making by the state's attorney
general, which would be further supplanted by the California
Privacy Protection Agency. He expressed concern with the
"private right of action" provision. He suggested that it may
lead to large settlements for unintentional behavior, rather
than those based on actual harm.
2:07:25 PM
CHAIR CLAMAN ascertained that there was no one else who wished
to testify, and he closed public testimony on HB 159.
2:07:42 PM
REPRESENTATIVE EASTMAN referred to page 10 and asked how
parental consent for a minor would be achieved.
REPRESENTATIVE FIELDS responded that the protection of minors is
an important provision in the bill. He drew attention to
subsection (b), which specifies that a business recklessly
disregarding the reasonable likelihood that a consumer is under
18 years of age, is considered to have the actual knowledge of
the consumer's age, and this would necessitate parental consent.
2:09:43 PM
REPRESENTATIVE EASTMAN questioned whether, once parental consent
has been obtained by a company, would the "reckless" criteria be
disregarded. He referred to page 10, line 20 and asked whether
the subsection would apply to tracking the child or to tracking
the child's device.
2:11:32 PM
THERESA BANNISTER, Legislative Counsel, Legislative Legal
Services, Alaska State Legislature, answered that the language
in the subsection might not address the tracking of a minor's
device; however, she expressed belief that it would. She stated
that the language could be updated to reflect this intent more
clearly.
REPRESENTATIVE SNYDER referred to the concern which was
expressed by public testimony regarding the "patchwork" of
regulations at the state level. She asked Representative Fields
to offer his perspective on the testimony.
REPRESENTATIVE FIELDS answered that technology companies operate
in hundreds of countries, and he expressed disregard of the
concern, as state-level regulations would present challenges.
REPRESENTATIVE EASTMAN suggested that a "patchwork" of state-by-
state regulations would benefit larger technology companies, as
smaller startups would be discouraged by the burdensome
regulatory requirements and the necessary resources to navigate
them.
REPRESENTATIVE FIELDS expressed the belief that the opposite is
true: large technology companies had "squashed" competition in
the absence of regulations. He opined that robust regulations
are necessary to promote competition.
2:15:25 PM
CHAIR CLAMAN noted that cell phone companies offer family plans
with the billing assigned to one of the parents. He asked how
the proposed privacy regulations related to minors would affect
several phones in the name of one individual.
REPRESENTATIVE FIELDS answered that technology companies have
knowledge of who is using a particular device based on data
collected.
CHAIR CLAMAN asked whether the phone companies would have
knowledge of who is using a particular phone.
REPRESENTATIVE FIELDS offered a hypothetical situation in which
a minor using a smartphone would be identified by the technology
companies based on the social media application profile. In
response to a follow-up question, he expressed agreement that
the name on the phone account would be irrelevant.
REPRESENTATIVE EASTMAN asked whether an entity, which did not
have a business relationship with large technology companies,
such as Facebook, would have access to the identifying data for
a minor.
REPRESENTATIVE FIELDS responded that there exist nuances in
technologies which could make this information available to
companies.
2:18:46 PM
TRISTAN WALSH, Staff, Representative Zack Fields, Alaska State
Legislature, answered that, despite a company lacking a first-
hand relationship with Facebook, it has been estimated that 60
percent of applications have plugins with Facebook; thus, they
have access to the information in this universe. He expressed
that second- and third-hand markets are a cause for the need for
protection of data.
REPRESENTATIVE DRUMMOND asked how permission of a parent would
be obtained prior to a minor accessing a website that the minor
should be prohibited from accessing.
REPRESENTATIVE FIELDS allowed that technology precision would
evolve and become more practical, but the bill would not
prescribe such a provision.
REPRESENTATIVE DRUMMOND noted the state constitution's privacy
protection provision and asked whether a constitutional
convention should make changes to the privacy provision, and if
this happens, she questioned the effect on the proposed bill.
REPRESENTATIVE FIELDS expressed the belief that, unless the
constitution is changed to remove the legislature's authority to
regulate privacy, the legislature would still regulate privacy
in the absence of a mandate to do so.
2:22:50 PM
CHAIR CLAMAN announced that HB 159 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 159 v. G 2.7.2022.PDF |
HJUD 2/7/2022 1:30:00 PM HJUD 3/18/2022 1:00:00 PM |
HB 159 |
| HB 159 v. G Sponsor Statement 2.3.2022.pdf |
HJUD 2/7/2022 1:30:00 PM HJUD 3/18/2022 1:00:00 PM |
HB 159 |
| HB 159 v. G Sectional Analysis 2.3.2022.pdf |
HJUD 2/7/2022 1:30:00 PM HJUD 3/18/2022 1:00:00 PM HL&C 2/4/2022 9:00:00 AM |
HB 159 |
| HB 159 Summary of Changes from v. I to v. G 2.3.2022.pdf |
HJUD 2/7/2022 1:30:00 PM HJUD 3/18/2022 1:00:00 PM HL&C 2/4/2022 9:00:00 AM |
HB 159 |
| HB 159 Supporting Document - New York Times Article 6.3.2018.pdf |
HJUD 2/7/2022 1:30:00 PM HJUD 3/18/2022 1:00:00 PM HL&C 12/6/2021 1:00:00 PM |
HB 159 |
| HB 159 Supporting Document - The Financial Times Article 1.17.2019.pdf |
HJUD 2/7/2022 1:30:00 PM HJUD 3/18/2022 1:00:00 PM HL&C 12/6/2021 1:00:00 PM |
HB 159 |
| HB 159 Supporting Document - New York Times Article 1.13.2020.pdf |
HJUD 2/7/2022 1:30:00 PM HJUD 3/18/2022 1:00:00 PM |
HB 159 |
| HB 159 Supporting Document - Nature Magazine Mobility Study 3.25.2013.pdf |
HJUD 2/7/2022 1:30:00 PM HJUD 3/18/2022 1:00:00 PM |
HB 159 |
| HB 159 Supporting Document - Vice Article 7.14.2021.pdf |
HJUD 2/7/2022 1:30:00 PM HJUD 3/18/2022 1:00:00 PM |
HB 159 |
| HB 159 Supporting Document - The Verge Article 4.27.2021.pdf |
HJUD 2/7/2022 1:30:00 PM HJUD 3/18/2022 1:00:00 PM |
HB 159 |
| HB 159 PowerPoint Presentation 2.7.2022.pdf |
HJUD 2/7/2022 1:30:00 PM |
HB 159 |
| HB 159 Opposing Document - Joint Ad Trade Letter 2.7.2022.pdf |
HJUD 2/7/2022 1:30:00 PM |
HB 159 |