Report From the NRF: Congress Mulling Privacy/Data Breach Disclosure

Jan. 12, 2015

Report From the NRF: Congress Mulling Privacy/Data Breach Disclosure A theme that already has emerged on the first day of the National Retail Federation’s annual Big Show event in New York City is the struggle retailers are having with Big Data in how they use it and how they store it. A year of high-profile breaches has left the industry struggling with the dichotomy between wanting to have and use customer data to deliver a personalized experience and being able to protect that data. One panel highlighted a group that’s just as interested in that dichotomy as retailers: the U.S. Congress. Rep. Marsha Blackburn (R-Tenn.) and Rep. Peter Welch (D-Vt.), co-chairs of the Privacy Working Group of the Commerce, Manufacturing, and Trade Subcommittee, acknowledged that while retail makes up 70 percent of the U.S. economy and no one wants to risk a strengthening recovery, balancing that dichotomy will probably involve legislation.

“[The efforts of the working group] will take us to privacy, data breach, data security legislation within the next three or four months,” said Blackburn.

At least one part of any legislation will involve disclosure rules around data breaches. Welch highlighted the need for a standard set of national rules to help retailers who currently are required to comply with a “mishmash” of state laws on the issue.

“If we can get a national standard, you’re not going to have companies having to deal with 50 different standards in 50 different states.” Welch said. “But, preemption [deciding when federal law preempts state laws on the same matter] is a very difficult issue. A lot of us, Republican and Democrat, want to protect the right of states to act as they see fit in the best interests of their citizens. But, there are certain circumstances where that creates more harm than good. When you have 50 different standards it creates a lot of confusion among retailers and even consumers. So, the challenge for us is to come up with a standard that is simple and straightforward for retailers but provides protection and legitimate notice [to consumers] if something bad happens.”

Blackburn said the working group has a lot of bipartisan commonality, given the economic importance of retail in every congressional district. Her biggest priority when formulating legislation will be ensuring that lawmakers don’t stifle innovation. Blackburn and Welch both said retail innovations serve consumers, but technology must be presented to them on an “opt in” basis.