Protection of consumer data discussed

Consumers would have more control over how their data is used and distributed under a bill heard by the Transportation and Telecommunications Committee Feb. 4.

Under LB746, introduced by Bellevue Sen. Carol Blood, consumers would have the right to know what personal information is collected about them and whether or not it is sold or disclosed to third parties. Consumers also could decline or opt out of the sale of their information and access the information collected about them.

It is especially important to ensure that Nebraska has a framework for what is allowed, Blood said, because people may not know that information is being bought and sold or who is buying and selling it.

“As our communication networks grow—as do the many ways we share data and information—it has become more and more important to make sure that we as a state government have a grasp on what exactly is being shared and sent, bought and sold,” she said.

Upon receipt of a consumer request, a business that collects personal information would be required to disclose the types of personal information collected, from where it was collected and for what purposes and the third parties with whom the information would be shared.

LB746 would prohibit a third party from selling consumer information sold to the third party by a business unless it receives explicit consent from the consumer. A business that sells consumer information would be required to give notice to consumers that their data may be sold and that they could opt out of the sale of information at any time.

Businesses would be prohibited from selling the personal information of any person under 16 unless it has received explicit, affirmative consent from the person’s parent or guardian.

The bill also would authorize consumers to request deletion of their personal information from a business unless the information is necessary for business transactions or other narrowly defined purposes. A business could not discriminate against a consumer for exercising their rights under the bill.

Speaking in opposition to LB746 was Jim Otto, representing the Nebraska Retail Federation. Winning customer trust is essential in a hypercompetitive marketplace, he said.

“One element of that trust lies in customer information gathered to better serve them and win their business,” Otto said. “The vast majority of customers are willing to trade some personal information for valuable benefits and discounts.”

Kathy Siefken, executive director of the Nebraska Grocery Industry Association, also opposed the bill. As written, she said, it does not limit how frequently consumers can request information, which would negatively impact the price of doing business.

“In addition to potentially higher compliance costs, the need to overhaul data use practices and the possible risk of enforcement by the attorney general’s office, the cost for retailers that offer discount programs could be so overwhelming that these loyalty or discount programs could become too expensive to continue,” Siefken said.

Violation of the bill’s provisions by a business, service provider or other person would be subject to a civil penalty of up to $7,500 per incident.

No one testified in support of LB746 and the committee took no immediate action on it.