A Choice-of-Law Alternative to Federal Preemption of State Privacy Law
==========
Preempting state law has been a staple of the debate about privacy regulation in the United States. A federal statute requiring states to recognize contractual choice-of-law provisions would allow businesses to avoid a regulatory patchwork while fostering a dual competition: among states over their privacy statutes and among businesses over their privacy practices. Such competition would help discern consumers’ true interests in privacy versus other goods, and it could spur states to specialize in privacy. The precise contours of a federal limitation on states’ treatment of contractual choice-of-law provisions must be determined, but sample language can be drawn from existing legislation. A prominent theme in debates about US national privacy legislation is whether federal law should preempt state law. A federal statute could create one standard for markets that are obviously national in scope. Another approach is to allow states to be “laboratories of democracy” that adopt different laws so they can discover the best ones. The authors propose a federal statute requiring states to recognize contractual choice-of-law provisions, so companies and consumers can choose what state privacy law to adopt. Privacy would continue to be regulated at the state level. However, the federal government would provide for jurisdictional competition among states, such that companies operating nationally could comply with the privacy laws of any one state. This approach would foster a double competition aimed at discerning and delivering on consumers’ true privacy interests: market competition to deliver privacy policies that consumers prefer and competition among states to develop the best privacy laws. Unlike a single federal privacy law, this approach would provide 50 competing privacy regimes for national firms. The choice-of-law approach can trigger competition and innovation in privacy practices while preserving a role for meaningful state privacy regulation.
https://www.aei.org/research-products/report/a-choice-of-law-alternative-to-federal-preemption-of-state-privacy-law/
American Enterprise Institute /
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2024-03-15 05:11:51
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"content": "A Choice-of-Law Alternative to Federal Preemption of State Privacy Law\n==========\n\nPreempting state law has been a staple of the debate about privacy regulation in the United States. A federal statute requiring states to recognize contractual choice-of-law provisions would allow businesses to avoid a regulatory patchwork while fostering a dual competition: among states over their privacy statutes and among businesses over their privacy practices. Such competition would help discern consumers’ true interests in privacy versus other goods, and it could spur states to specialize in privacy. The precise contours of a federal limitation on states’ treatment of contractual choice-of-law provisions must be determined, but sample language can be drawn from existing legislation. A prominent theme in debates about US national privacy legislation is whether federal law should preempt state law. A federal statute could create one standard for markets that are obviously national in scope. Another approach is to allow states to be “laboratories of democracy” that adopt different laws so they can discover the best ones. The authors propose a federal statute requiring states to recognize contractual choice-of-law provisions, so companies and consumers can choose what state privacy law to adopt. Privacy would continue to be regulated at the state level. However, the federal government would provide for jurisdictional competition among states, such that companies operating nationally could comply with the privacy laws of any one state. This approach would foster a double competition aimed at discerning and delivering on consumers’ true privacy interests: market competition to deliver privacy policies that consumers prefer and competition among states to develop the best privacy laws. Unlike a single federal privacy law, this approach would provide 50 competing privacy regimes for national firms. The choice-of-law approach can trigger competition and innovation in privacy practices while preserving a role for meaningful state privacy regulation.\n\n\n\nhttps://www.aei.org/research-products/report/a-choice-of-law-alternative-to-federal-preemption-of-state-privacy-law/",
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