California bill to expand privacy protections fails

By Katie Paul

By Katie Paul

SAN FRANCISCO (Reuters) - California's senate blocked a bill on Thursday that would have expanded the ability of consumers to sue companies over their handling of personal data, a win for tech industry groups concerned about wide-ranging privacy lawsuits.

Under California's data privacy law, which is set to take effect next year, consumers may file complaints to the state attorney general over alleged violations of privacy rules, but can sue over a data breach.

The new bill, introduced in February and endorsed by the attorney general, would have strengthened that law to enable consumers to sue over any alleged violations.

Adam Schwartz, a senior staff attorney at the San Francisco-based privacy group the Electronic Frontier Foundation, said the bill's failure marked "a sad day for consumer data privacy."

"The act last year was a start, and it puts in place good rules. But a law is only as good as its enforcement," he said.

California's law, the toughest in the United States, enables fines of up to $7,500 for intentional failure to disclose data collection or selling others' data without permission.

As other states have begun drafting bills, Facebook Inc's Mark Zuckerberg and other tech leaders have called for federal privacy legislation to set industry-wide guidelines for how personal data should be collected and used.

But tech lobbying groups have also said they would fight any legislative proposals that could open the door to a flurry of consumer lawsuits.

The bill that failed Thursday was part of a process in Sacramento of clarifying the law passed last year, which was hastily cobbled together as an alternative to a more stringent ballot initiative backed by real estate developer Alastair Mactaggart.

Privacy advocates worry many of the other bills under consideration will hollow out the law, carving out loopholes for particular industries and forms of data collection.

Mactaggart and others behind the law say they are confident they can defeat any carve-out attempts through the legislative process.

Current enforcement mechanisms are robust enough, Mactaggart told Reuters in an interview the day before the bill was blocked, and are an essential part of the commitments made in the legislative deal last year.

"I never would've withdrawn the ballot measure if I didn't think there was adequate enforcement," Mactaggart told Reuters. "With my eyes wide open I did it, and I would do it again."


(Reporting by Katie Paul; Editing by Lisa Shumaker)