Relates to establishing the online consumer protection act

Title of bill

An act to amend the general business law, in relation to establishing the online consumer protection act

Purpose or general idea of bill

Called the Online Consumer Protection Act, the bill establishes rules and privacy policies with respect to how website publishers and advertising networks collect and disseminate online behavior of consumers. It also requires that consumers are given adequate notice of what how advertisers operate as well as a clear and conspicuous mechanism on websites for consumers to opt-out of such online advertising.

Summary of specific provisions

Adds a new section 390-bb to the general business law. It has several important requirements:

* It prohibits website publishers and advertising networks from collecting personally identifying information online.

* Requires website publishers and advertising networks to disclose data collection and use practices on its website.

* Requires website publishers that use advertising networks to state so on its website. * Consumers have the ability to opt-out from any profiling activity.

* Requires advertising networks to make reasonable efforts to protect all data it collects.

Justification

This bill is a critical step in protecting personal privacy in the Internet Age. This bill is necessary because 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 the bill codifies what the industry says it doesn't do; use personally identifying information for 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 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 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. Some companies are better than others. Moreover, the lack of a uniform policy on online privacy has resulted in significant breaches in personal privacy. In 2006 an individual's searches with one Internet search engine were used to identify her personally.

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 interests of New Yorkers. New York has an obligation to enact commonsense 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 consumers. The fact that our proposal could influence other states or the federal government is something to be viewed as positive and not negative.

Legislative history

New bill.

Fiscal implications

None.

Effective date

This act shall take effect on the 180th day after it shall have become a law.