New Federal Privacy Bill Sets High Thresholds, Lacks Private Right of Action, Faces Long Odds

Congress has introduced the SECURE Data Act, the latest effort to create a single national privacy standard in the United States. This bill seeks to preempt, or override, existing state privacy laws, a contentious point that has stalled previous federal attempts.

The SECURE Data Act establishes specific criteria for companies to be covered. A company must either collect personal data from over 200,000 consumers and generate at least $25 million in annual revenue, or process data for at least 100,000 consumers and derive 25% or more of its revenue from data sales. These thresholds are higher than many existing state-level privacy laws, which often apply to companies interacting with 100,000 consumers or even fewer. Notably, the bill does not include a private right of action, preventing individuals from directly suing companies over violations. Instead, the Federal Trade Commission would serve as the primary enforcer, supported by state attorneys general.

This approach to enforcement and coverage positions the SECURE Data Act differently from previous proposals and many state regulations. The absence of a private right of action has historically made bills more favorable to business groups, as it limits direct litigation risk from consumers. However, the bill faces an uphill battle to become law. Past attempts at federal privacy legislation have frequently stalled over similar disputes, particularly surrounding the preemption of state laws and the scope of consumer legal recourse. Industry expert Gary Kibel, a partner at Davis+Gilbert, expressed skepticism regarding its immediate prospects, indicating he would "sooner bet $100 on the Mets winning the World Series than this bill becoming law this year in its current state." The path forward for a unified national privacy standard remains challenging, requiring reconciliation of diverse interests across states, businesses, and consumer advocacy groups. Watch for ongoing negotiations and the stance of key congressional leaders as the bill progresses.