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A09691 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A9691
 
SPONSOR: Rozic (MS)
  TITLE OF BILL: An act to amend the general business law, in relation to establishing the online consumer protection act   PURPOSE: This bill, called the Online Consumer Protection Act, would establish rules and privacy policies with respect to how website publishers and advertising networks collect and disseminate the online behavior of consumers. It would require that consumers are given adequate notice of how advertisers operate as well as a clear and conspicuous mechanism on websites for consumers to opt-out of such online advertising.   SUMMARY OF PROVISIONS: Section 1 of the bill establishes the short title as the "Online Consum- er Protection Act." Section 2 of the bill establishes legislative findings relating to the act. Section 3 of the bill adds a new section 390-bb to the general business law. It has several important provisions and requirements including: Prohibiting website publishers and advertising networks from collecting personally identifying information online; requiring website publishers and advertising networks to disclose data collection and use practices on its website; requiring website publishers that use advertising networks to state so on its website; requiring that consumers have the ability to opt-out from any profiling activity; requiring advertising networks to make reasonable efforts to protect all data it collects. Section 4 of the bill sets forth the effective date.   JUSTIFICATION: This bill is a critical step in protecting personal privacy in the Internet Age. The necessity of this legislation stems from the fact that in order to sustain the viability of online business models, companies have had to move to targeted online advertising. This bill does not ban targeted online advertising. Instead, it codifies what the industry says it doesn't do: use personally identifying infor- mation for the purposes of advertising. We additionally require websites and ad networks to allow individuals to say no to being tracked. Like the "Do Not Call" Registry, this bill will empower consumers to make decisions for themselves and their families. The Internet industry currently relies too heavily on self-regulation and while they should be applauded for their desire to update their regulations, we feel this law is vital to the protection of online consumers. This bill still allows the Internet industry to continue to innovate and stay flexible in an industry where technology and standards change rapidly, however, there is no time when we feel that notification of tracking practices and an ability for the consumer to opt-out of being tracked would be bad public policy. Self-regulation cannot universally protect people's privacy and some companies are better at establishing consumer protection practices than others. Moreover, the lack of a uniform policy on online privacy has resulted in significant breaches in personal privacy. New York has long been a leader in public policy. Our federal system allows states to innovate and experiment in public policy. Waiting for other states or for the Congress to act is not in the best interest of New Yorkers. New York has an obligation to enact common sense consumer protections. The industry has stated that one state should not address an issue that is as large in scope and as technically complicated as online advertising. Additionally, there are claims that the Dormant Commerce Clause prevents New York from acting in the first place. This bill is not intended to usurp Constitutional provisions or to hurt the Internet industry. Instead, the only aim is to protect internet consum- ers. The fact that our proposal could influence other states or the federal government is something to be viewed as positive and not nega- tive.   FISCAL IMPACT ON THE STATE: None.   FISCAL IMPACT ON LOCALITIES: None.   IMPACT ON REGULATION OF BUSINESSES AND INDIVIDUALS: This bill would prohibit publishers of websites, as well as advertising networks contracted with publishers of websites, from gathering personal identifying information from consumers online; it would require website publishers and advertising networks to disclose their data collection methods on their websites; it would further require website publishers and advertising networks to give consumers an option to opt out from any profiling.   IMPACT ON FINES, IMPRISONMENT, FORFEITURE OF RIGHTS, OR OTHER PENAL SANCTIONS: The Attorney General may bring an action against a person who violates this section to enjoin their violation, and those found to have collected personally identifying information in violation of certain provisions of the law may be subject to a judgment of up to $250,000 for each violation.   LEGISLATIVE HISTORY: 2017: A03367 (Kavanagh) - Consumer Affairs and Protection 2016: A05830 (Kavanagh) - Consumer Affairs and Protection 2015: A05830 (Kavanagh) - Consumer Affairs and Protection 2014: A01117 (Kavanagh) - Consumer Affairs and Protection 2013: A01117 (Kavanagh) - Consumer Affairs and Protection 2012: A04809 (Kavanagh) - Consumer Affairs and Protection 2011: A04809 (Kavanagh) - Consumer Affairs and Protection 2010: A01393 (Brodsky) - Consumer Affairs and Protection 2009: A01393 (Brodsky) - Codes 2008: A09275D (Brodsky) - Rules 2007: A09275 (Brodsky) - Consumer Affairs and Protection   EFFECTIVE DATE: This act shall take effect on the one hundred eightieth day after it shall have become a law.
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