Data Privacy Laws Sweeping the States

Will Congress Follow Montana by Closing the Data Broker Loophole?

Twenty states have enacted major consumer data privacy laws. When will Washington, D.C., wake up and restrict the open season on Americans’ personal information at the federal level?

California lit the fuse in 2018, passing laws that set limits on how businesses collect and sell consumers’ data. This year, new privacy laws have taken effect, or soon will, in New Hampshire, Delaware, Iowa, Nebraska, New Jersey, Tennessee, Minnesota, and Maryland.

Montana may offer the best model for federal action. The Montana Consumer Data Privacy Act, which went into effect late last year, mirrors many other state laws, while giving strong, clear rights. In Montana, consumers have the right:

• To opt-out of data sales, targeted ads, or profiling that drives automated legal decisions.

 

• To know if a data “controller” is processing their personal information and to access that data.

 

• To correct errors.

 

• To demand deletion of personal data.

 

• To exercise these rights without retaliation.

Like many other states, the Montana law also adds special protections for minors, requiring consent for data sales and targeted ads to children aged 13 to 16.  

But where Montana truly shines is by closing the notorious “data broker loophole.” That loophole lets government agencies dodge the Fourth Amendment’s warrant requirement by simply buying consumers’ data.

Montana now flatly bars law enforcement from purchasing sensitive electronic data – such as electronic communications metadata and precise geolocation information – without a warrant.

The federal government has no such restraint. Agencies from the FBI and IRS to the Department of Homeland Security, and the Department of Defense, routinely buy and access Americans’ sensitive personal data. Government lawyers insist this is fine because we all “agree” through terms of service – though almost no one reads them, and they never warn consumers that third-party data brokers might be selling their data to the FBI.
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As more states pioneer privacy laws, the pressure builds. An intense debate on the data-broker loophole in Congress is inevitable. Lawmakers would do well to take a cue from one of Montana’s favorite sons, Gary Cooper, who said: “One nice thing about silence is that it can’t be repeated.”

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