A Federal Privacy Law Must Face the Tradeoffs | American Enterprise Institute
A Federal Privacy Law Must Face the Tradeoffs | American Enterprise Institute
https://www.aei.org/technology-and-innovation/a-federal-privacy-law-must-face-the-tradeoffs/
Publish Date: 2026-06-08 05:44:00
Source Domain: www.aei.org
The fight over federal privacy legislation is often described as a debate over consumer rights, but the real fight has always been over federalism. That tension was on display last week when the House Subcommittee on Commerce, Manufacturing, and Trade held a hearing on the SECURE Data Act, the latest effort to establish a federal privacy bill. As Representative Frank Pallone put it in his opening statement, “A federal privacy law must exceed the strongest protections of any state and not set a weak ceiling.”
Since California passed the Consumer Privacy Act in 2018, states have rushed to enact their own privacy laws. Today, 22 different state privacy bills exist, each with their own unique requirements and structures. I don’t doubt that local policymakers are acting in good faith when they pass these privacy bills but this patchwork approach forces businesses to repeatedly adapt their compliance strategies with every new law that passes.
Even some of the bill’s critics begrudgingly admit that it “closely resembles many of the existing state comprehensive privacy laws…in terms of its structure, terminology, consumer rights, and business obligations.” It even includes a number of provisions that aren’t in state bills, such as a federal data broker registry, parental controls and sensitive-data treatment for teens aged 13 to 16, extension to common carriers, and a Code of Conduct certification modeled on the Children’s Online Privacy Protection Rule safe harbor.
Still, the basic bargain behind federal privacy legislation remains unresolved. Republicans are willing to support national privacy standards largely because those standards would preempt the growing patchwork of state laws. Democrats, by contrast, are reluctant to accept a federal compromise that may preempt bills like Illinois’s Biometric Information Privacy Act or Washington’s My Health My Data Act. To be clear, this isn’t guaranteed because the bill sets up a…
