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NRF Says Senate Privacy Bill is Too Broad, Would Subject Consumers to Blizzard of Notices

For Immediate Release
Contact: J. Craig Shearman (202) 626-8134

NRF Says Senate Privacy Bill is Too Broad, Would Subject Consumers to Blizzard of Notices

WASHINGTON, April 13, 2011 – Privacy legislation introduced in the Senate this week is overly broad and could subject consumers to a blizzard of privacy notices that would do little to prevent identity theft or address other serious privacy concerns, the National Retail Federation said today.

“We appreciate senators’ interest in privacy but they should focus on genuine problems rather than over-regulating Main Street businesses,” NRF Senior Vice President and General Counsel Mallory Duncan said. “Almost all of the incidents leading to calls for regulation have been web-based, but by attempting to regulate bricks and mortar stores instead, this bill would considerably degrade the shopping experience. Congress is getting it seriously wrong and needs to reboot before this gets off the ground.”

Senator John Kerry, D-Mass., on Tuesday introduced S. 799, the Commercial Privacy Bill of Rights Act, with Senator John McCain, R-Ariz., as the measure’s lead cosponsor.

The Kerry-McCain bill would apply to nearly all data about consumers collected by businesses or their service providers regardless of whether the information is collected online, through mobile devices such as cell phones, or in person in a store. Customers would have to be able to “opt out” of having even non-sensitive information collected and would be offered an undefined “robust” opt out choice for some data. Customers would have to proactively “opt in” for businesses to be allowed to collect other, more-sensitive categories of information. Severe restrictions would be placed on use of even innocuous information, with the Federal Trade Commission given broad authority to develop regulations. Violators could face civil penalties of up to $3 million.

Duncan said the legislation would apply to ordinary business activities “customers have never complained about” such as keeping lists of clothing sizes or preferences, and would interfere with marketing and customer service programs.

Retailers are particularly concerned about the bill’s apparent requirement to provide privacy notices to customers shopping in bricks-and-mortar stores, Duncan said. Stores could conceivably be required to hand out written notices each time a customer comes to a cash register.

Duncan said a second privacy bill introduced today – the Consumer Privacy Protection Act, sponsored by Representative Cliff Stearns, R-Fla. – takes a different approach that would allow businesses more flexibility.

As the world's largest retail trade association and the voice of retail worldwide, the National Retail Federation's global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the United States and more than 45 countries abroad. In the United States, NRF represents the breadth and diversity of an industry with more than 1.6 million American companies that employ nearly 25 million workers and generated 2010 sales of $2.4 trillion. www.nrf.com