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Closely watched California Internet privacy bill dies in final minutes of legislative session

September 18, 2017

California lawmakers on Saturday shelved a bill that would have required Internet service providers such as Verizon, Comcast and AT&T to get permission from customers before using, selling or allowing access to their browser history.

The legislation by Assemblyman Ed Chau (D-Monterey Park) would have enshrined in state law some federal Internet privacy regulations that were rolled back this year by President Trump and Congress. The regulations limited what broadband providers can do with their customers’ data.

The defeat capped a behind-the-scenes battle that pitted telecom companies against state Internet service providers (ISPs) and brought other bills to a halt in the state Senate as negotiations unfolded over legislation that would have had national significance.

Most of the “California Privacy Act” would have codified the repealed restrictions crafted by the Federal Communications Commission under the Obama administration.

But it also would have barred Internet service companies from refusing to provide service or limiting service if customers do not waive their privacy rights. And it would have prohibited them from offering customers discounts in exchange for waiving their privacy rights or charging customers a penalty for refusing to do so.

The bill had the support of former FCC Chairman Tom Wheeler and smaller California ISPs. Opponents — which included tech giants like Google — argued it was being rushed through the legislative process.
For ISPs that are already complying with the former federal regulations, the bill would haven’t made much of a difference operationally, said Ernesto Falcon, legislative counsel for the Electronic Frontier Foundation, a digital rights group based in San Francisco. But the influence of the legislation could have been sweeping.

“California is a critical state because you are covering a large part of the nation just because of its population,” he said. “It sets the stage for other states to follow suit.”

For now, efforts to implement the rules could move to the ballot box. A ballot initiative proposed this month would give California consumers the right to know what personal information businesses are collecting, what they do with it and to whom they are selling it.

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Europe’s Top Court Backs Law Student in Facebook Privacy Case

October 6, 2015

LUXEMBOURG — The European Union’s highest court ruled Tuesday in favor of an Austrian law student who claims a trans-Atlantic data protection agreement doesn’t adequately protect consumers, a verdict that could have far-reaching implications for tech companies doing business in Europe.

Image: Max Schrems
Max Schrems waits for the verdict of the European Court of Justice in Luxembourg on Tuesday. JULIEN WARNAND / EPA

Max Schrems launched the case following revelations two years ago by former National Security Agency contractor Edward Snowden about the NSA’s surveillance programs.

Schrems complained to the data protection commissioner in Ireland, where Facebook has its European headquarters, that U.S. law doesn’t offer sufficient protection against surveillance of data transferred by the social media company to servers in the United States.

Irish authorities initially rejected his complaint, pointing to a 2000 decision by the EU’s executive Commission that, under the so-called “safe harbor” agreement, the U.S. ensures adequate data protection.

The agreement has allowed for the free transfer of information by companies from the EU to U.S. It has been seen as a boost to trade since, absent such a deal, swift and smooth data exchange over the Internet would be much more difficult.

Without “safe harbor,” personal data transfers are forbidden, or only allowed via costlier and more time-consuming means, under EU laws that prohibit data-sharing with countries deemed to have lower privacy standards, of which the United States is one.

On Tuesday, the European Court of Justice ruled the decision by the Commission invalid. It said that the “safe harbor” deal enables interference by U.S. authorities with fundamental rights and contains no reference either to U.S. rules to limit any such interference or to effective legal protection against it.

The court said the effect of the ruling is that the Irish data commissioner will now be required to examine Schrems’ complaint “with all due diligence.”

Once it has concluded its investigation, the authority must “decide whether … transfer of the data of Facebook’s European subscribers to the United States should be suspended on the ground that that country does not afford an adequate level of protection of personal data,” the court said in a summary of its ruling.

Image: Facebook and European Union logos
A 3D-printed Facebook logo is seen in front of the logo of the European Union in this picture illustration. DADO RUVIC / Reuters, file

Facebook said it couldn’t immediately comment.

Schrems said he hoped the ruling will be a milestone for online privacy.

“This decision is a major blow for U.S. global surveillance that heavily relies on private partners,” Schrems said in a statement. “The judgement makes it clear that U.S. businesses cannot simply aid U.S. espionage efforts in violation of European fundamental rights.”

However, he noted that the ruling doesn’t bar data transfers from the EU to the U.S., but rather allows national data protection authorities to review individual transfers.

“Despite some alarmist comments I don’t think that we will see mayor disruptions in practice,” Schrems said.

But Richard Cumbley, global head of technology, media and telecommunications at law firm Linklaters, disagreed.

“This is extremely bad news for EU-U.S. trade,” he said. “Without ‘safe harbor,’ [businesses] will be scrambling to put replacement measures in place.” 

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