I

106TH CONGRESS

2D SESSION H. R. 5430

To require the Federal Trade Commission to prescribe regulations to protect

the privacy of personal information collected from and about individuals

on the Internet, to provide greater individual control over the collection

and use of that information, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 10, 2000

Mr. GREEN of Texas introduced the following bill; which was referred to the

Committee on Commerce

A BILL

To require the Federal Trade Commission to prescribe regulations to protect the privacy of personal information

collected from and about individuals on the Internet,

to provide greater individual control over the collection

and use of that information, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Consumer Online Pri5 vacy and Disclosure Act’’.
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1 SEC. 2. REGULATION OF UNFAIR AND DECEPTIVE ACTS

2 AND PRACTICES IN CONNECTION WITH THE

3 COLLECTION, USE, AND DISCLOSURE OF PER4 SONAL INFORMATION.

5 (a) ACTS PROHIBITED.—

6 (1) IN GENERAL.—Except as provided in para7 graph (2), it is unlawful for an operator of a Web

8 site or online service to collect, use, or disclose per9 sonal information in a manner that violates the reg10 ulations prescribed under subsection (b).

11 (2) DISCLOSURE.—Notwithstanding paragraph

12 (1), neither an operator of a Web site or online serv13 ice nor the operator’s agent shall be held liable

14 under this Act for any disclosure made in good faith

15 and following reasonable procedures in responding to

16 a request under subsection (b)(1)(B) by an indi17 vidual for disclosure of personal information per18 taining to such individual.

19 (3) CROSS TABULATION OF INTERNET DATA.—

20 Unless there is a pre-existing business relationship,

21 no Web site or ISP may correlate IPS address infor22 mation with personal information.

23 (b) REGULATIONS.—

24 (1) IN GENERAL.—Not later than 1 year after

25 the date of the enactment of this Act, the Commis-
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1 sion shall promulgate under section 553 of title 5,

2 United States Code, regulations that—

3 (A) require the operator of any Web site or

4 online service—

5 (i) to provide notice on its Web site in

6 a format that the average person can un7 derstand which notice shall be clear and

8 conspicuous and shall provide the identity

9 of the operator, the physical and electronic

10 mail address of the operator, what per11 sonal information is collected by the oper12 ator, how the operator uses such informa13 tion, and what information may be shared

14 or sold with other companies;

15 (ii) to provide a meaningful and sim16 ple online process for individuals to opt-out

17 the disclosure of personal information for

18 purposes unrelated to those for which such

19 information was obtained or described in

20 the notice under clause (i); and

21 (iii) to provide a description of the

22 specific types of personal information col23 lected by that operator that is either sold,

24 shared, or transferred to an external com25 pany or third party.
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1 (2) WHEN PURPOSE LIMITATION NOT RE2 QUIRED.—The regulations shall provide that the un3 related purpose limitation required under paragraph

4 (1)(A)(ii) is not required for—

5 (A) transactional information where per6 sonal information is not removed;

7 (B) personal information where it is used

8 to render or conduct a business activity related

9 to the business of the operator (for example,

10 the use of an e-mail address to respond to an

11 e-mail communication); or

12 (C) the collection, use, or dissemination of

13 such information by the operator of such a Web

14 site or online service necessary to the extent re15 quired under other provisions of law.

16 (c) ENFORCEMENT.—Subject to this section and sec17 tion 4, a violation of a regulation prescribed under sub18 section (a) shall be treated as a violation of a rule defining

19 an unfair or deceptive act or practice prescribed under sec20 tion 18(a)(1)(B) of the Federal Trade Commission Act

21 (15 U.S.C. 57a(a)(1)(B)).

22 (d) NO REQUIREMENT TO COLLECT OR MAINTAIN

23 DATA.—Nothing in this Act shall be interpreted to require

24 an operator to collect or maintain any data that would

25 not otherwise be collected or maintained.
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1 SEC. 3. ACTIONS BY STATES.

2 (a) IN GENERAL.—

3 (1) CIVIL ACTIONS.—In any case in which the

4 attorney general of a State has reason to believe

5 that an interest of the residents of that State has

6 been or is threatened or adversely affected by the

7 engagement of any person in a practice that violates

8 any regulation of the Commission prescribed under

9 section 2, the State may bring a civil action on be10 half of the residents of the State in a district court

11 of the United States of appropriate jurisdiction to—

12 (A) enjoin that practice;

13 (B) enforce compliance with the regulation;

14 (C) obtain damage, restitution, or other

15 compensation on behalf of residents of the

16 State; or

17 (D) obtain such other relief as the court

18 may consider to be appropriate.

19 (2) NOTICE.—

20 (A) IN GENERAL.—Before filing an action

21 under paragraph (1), the attorney general of

22 the State involved shall provide to the

23 Commission—

24 (i) written notice of that action; and

25 (ii) a copy of the complaint for that

26 action.
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1 (B) EXEMPTION.—

2 (i) IN GENERAL.—Subparagraph (A)

3 shall not apply with respect to the filing of

4 an action by an attorney general of a State

5 under this subsection, if the attorney gen6 eral determines that it is not feasible to

7 provide the notice described in that sub8 paragraph before the filing of the action.

9 (ii) NOTIFICATION.—In an action de10 scribed in clause (i), the attorney general

11 of a State shall provide notice and a copy

12 of the complaint to the Commission at the

13 same time as the attorney general files the

14 action.

15 (b) INTERVENTION.—

16 (1) IN GENERAL.—On receiving notice under

17 subsection (a)(2), the Commission shall have the

18 right to intervene in the action that is the subject

19 of the notice.

20 (2) EFFECT OF INTERVENTION.—If the Com21 mission intervenes in an action under subsection (a),

22 it shall have the right—

23 (A) to be heard with respect to any matter

24 that arises in that action; and

25 (B) to file a petition for appeal.
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1 (3) AMICUS CURIAE.—Upon application to the

2 court, a person whose self-regulatory guidelines have

3 been approved by the Commission and are relied

4 upon as a defense by any defendant to a proceeding

5 under this section may file amicus curiae in that

6 proceeding.

7 (c) CONSTRUCTION.—For purposes of bringing any

8 civil action under subsection (a), nothing in this Act shall

9 be construed to prevent an attorney general of a State

10 from exercising the powers conferred on the attorney gen11 eral by the laws of that State to—

12 (1) conduct investigations;

13 (2) administer oaths or affirmations; or

14 (3) compel the attendance of witnesses or the

15 production of documentary and other evidence.

16 (d) VENUE; SERVICE OF PROCESS.—

17 (1) VENUE.—Any action brought under sub18 section (a) may be brought in the district court of

19 the United States that meets applicable require20 ments relating to venue under section 1391 of title

21 28, United States Code.

22 (2) SERVICE OF PROCESS.—In an action

23 brought under subsection (a), process may be served

24 in any district in which the defendant—

25 (A) is an inhabitant; or
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1 (B) may be found.

2 SEC. 4. ADMINISTRATION AND APPLICABILITY OF ACT.

3 (a) IN GENERAL.—Except as otherwise provided, this

4 Act shall be enforced by the Commission under the Fed5 eral Trade Commission Act (15 U.S.C. 41 et seq.).

6 (b) PROVISIONS.—Compliance with the requirements

7 imposed under this Act shall be enforced under—

8 (1) section 8 of the Federal Deposit Insurance

9 Act (12 U.S.C. 1818), in the case of—

10 (A) national banks, and Federal branches

11 and Federal agencies of foreign banks, by the

12 Office of the Comptroller of the Currency;

13 (B) member banks of the Federal Reserve

14 System (other than national banks), branches

15 and agencies of foreign banks (other than Fed16 eral branches, Federal agencies, and insured

17 State branches of foreign banks), commercial

18 lending companies owned or controlled by for19 eign banks, and organizations operating under

20 section 25 or 25(a) of the Federal Reserve Act

21 (12 U.S.C. 601 et seq. and 611 et seq.), by the

22 Board; and

23 (C) banks insured by the Federal Deposit

24 Insurance Corporation (other than members of

25 the Federal Reserve System) and insured State
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1 branches of foreign banks, by the Board of Di2 rectors of the Federal Deposit Insurance Cor3 poration;

4 (2) section 8 of the Federal Deposit Insurance

5 Act (12 U.S.C. 1818), by the Director of the Office

6 of Thrift Supervision, in the case of a savings asso7 ciation the deposits of which are insured by the Fed8 eral Deposit Insurance Corporation;

9 (3) the Federal Credit Union Act (12 U.S.C.

10 1751 et seq.) by the National Credit Union Adminis11 tration Board with respect to any Federal credit

12 union;

13 (4) part A of subtitle VII of title 49, United

14 States Code, by the Secretary of Transportation

15 with respect to any air carrier or foreign air carrier

16 subject to that part;

17 (5) the Packers and Stockyards Act, 1921 (7

18 U.S.C. 181 et seq.) (except as provided in section

19 406 of that Act (7 U.S.C. 226, 227)), by the Sec20 retary of Agriculture with respect to any activities

21 subject to that Act; and

22 (6) the Farm Credit Act of 1971 (12 U.S.C.

23 2001 et seq.) by the Farm Credit Administration

24 with respect to any Federal land bank, Federal land
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1 bank association, Federal intermediate credit bank,

2 or production credit association.

3 (c) EXERCISE OF CERTAIN POWERS.—For the pur4 pose of the exercise by any agency referred to in sub5 section (b) of its powers under any other Act referred to

6 in that subsection, a violation of any requirement imposed

7 under this Act shall be deemed to be a violation of a re8 quirement imposed under that other Act. In addition to

9 its powers under any provision of law specifically referred

10 to in subsection (b), each of the agencies referred to in

11 that subsection may exercise, for the purpose of enforcing

12 compliance with any requirement imposed under this Act,

13 any other authority conferred on such agency by law.

14 (d) ACTIONS BY THE COMMISSION.—The Commis15 sion shall prevent any person from violating a rule of the

16 Commission under section 2 in the same manner, by the

17 same means, and with the same jurisdiction, powers, and

18 duties as though all applicable terms and provisions of the

19 Federal Trade Commission Act (15 U.S.C. 41 et seq.)

20 were incorporated into and made a part of this Act. Any

21 entity that violates such rule shall be subject to the pen22 alties and entitled to the privileges and immunities pro23 vided in the Federal Trade Commission Act in the same

24 manner, by the same means, and with the same jurisdic25 tion, power, and duties as though all applicable terms and
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1 provisions of the Federal Trade Commission Act were in2 corporated into and made a part of this Act.

3 (e) EFFECT ON OTHER LAWS.—Nothing contained in

4 this Act shall be construed to limit the authority of the

5 Commission under any other provisions of law.

6 SEC. 5. REVIEW.

7 Not later than 2 years after the effective date of the

8 regulations initially issued under section 2, the Commis9 sion shall—

10 (1) review the implementation of this Act, in11 cluding the effect of the implementation of this Act

12 on practices relating to the collection and disclosure

13 of information; and

14 (2) prepare and submit to Congress a report on

15 the results of the review under paragraph (1).

16 SEC. 6. STUDY.

17 The Comptroller General of the United States shall

18 conduct a study of the implementation of this Act during

19 the first 2 years after the date of its enactment and shall

20 report the results of such study to Congress.

21 SEC. 7. EFFECTIVE DATE.

22 Sections 2(a), 4, and 5 of this Act shall take effect

23 on the later of—

24 (1) the date that is 18 months after the date

25 of enactment of this Act; or
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1 (2) the date on which the Commission rules on

2 the first application filed for safe harbor treatment

3 under section 2 if the Commission does not rule on

4 the first such application within one year after the

5 date of enactment of this Act, but in no case later

6 than the date that is 30 months after the date of

7 enactment of this Act.

8 SEC. 8. DEFINITIONS.

9 In this Act:

10 (1) INDIVIDUAL.—The term ‘‘individual’’ means

11 a natural person of age 13 and above.

12 (2) COMMISSION.—The term ‘‘Commission’’

13 means the Federal Trade Commission.

14 (3) DISCLOSURE.—The term ‘‘disclosure’’

15 means, with respect to personal information the re16 lease of personal information collected in identifiable

17 form by an operator for any purpose, except where

18 such information is provided to a person other than

19 the operator who provides support for the internal

20 operations of the Web site and does not disclose or

21 use that information for any other purpose.

22 (4) FEDERAL AGENCY.—The term ‘‘Federal

23 agency’’ means an agency, as that term is defined

24 in section 551(1) of title 5, United States Code.
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1 (5) INTERNET.—The term ‘‘Internet’’ means

2 collectively the myriad of computer and tele3 communications facilities, including equipment and

4 operating software, which comprise the inter5 connected world-wide network of networks that em6 ploy the Transmission Control Protocol/Internet

7 Protocol, or any predecessor or successor protocols

8 to such protocol, to communicate information of all

9 kinds by wire or radio.

10 (6) OPERATOR.—The term ‘‘operator’’—

11 (A) means any person who operates a Web

12 site located on the Internet or an online service

13 and who collects or maintains personal informa14 tion from or about the users of or visitors to

15 such Web site or online service, or on whose be16 half such information is collected or main17 tained, where such Web site or online service is

18 operated for commercial purposes, including

19 any person offering products or services for sale

20 through that Web site or online service, involv21 ing commerce—

22 (i) among the several States or with 1

23 or more foreign nations;
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1 (ii) in any territory of the United

2 States or in the District of Columbia, or

3 between any such territory and—

4 (I) another such territory; or

5 (II) any State or foreign nation;

6 or

7 (iii) between the District of Columbia

8 and any State, territory, or foreign nation;

9 but

10 (B) does not include any nonprofit entity

11 that would otherwise be exempt from coverage

12 under section 5 of the Federal Trade Commis13 sion Act (15 U.S.C. 45).

14 (7) PERSONAL INFORMATION.—The term ‘‘per15 sonal information’’ means information collected on16 line from an individual that identifies that indi17 vidual, including—

18 (A) first and last name;

19 (B) home and other physical address;

20 (C) e-mail address;

21 (D) social security number;

22 (E) telephone number;

23 (F) any other identifier that the Commis24 sion determines identifies an individual; or
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1 (G) information that is maintained with, or

2 can be searched or retrieved by means of, data

3 described in subparagraphs (A) through (F).

4 (8) PRE-EXISTING BUSINESS RELATIONSHIP.—

5 The term ‘‘pre-existing relationship’’ means, when

6 used with respect to an individual and operator of

7 a Web site, that either of the following communica8 tions exist:

9 (A) Within a 5-year period there has been

10 a business transaction between the individual

11 and the operator (including a transaction in12 volving the provision, free of charge, of informa13 tion requested by the recipient of goods or serv14 ices).

15 (B) The individual was at the time of a

16 business transaction or thereafter, provided a

17 clear and conspicuous notice of an operators

18 data collection practices and has not exercised

19 their opportunity to terminate the pending

20 transaction.

21 (9) TRANSACTIONAL INFORMATION.—The term

22 ‘‘transactional information’’ means information gen23 erated in connection with the process of requesting,

24 accessing, or otherwise using the Internet.
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1 SEC. 9. PRIVATE RIGHT OF ACTION.

2 (a) ACTIONS AUTHORIZED.—Any person or entity

3 may, if otherwise permitted by the laws or rules of court

4 of a State, bring in an appropriate court of that State,

5 or may bring in an appropriate Federal court if such laws

6 or rules do not so permit, either or both of the following

7 actions:

8 (1) An action based on a violation of any rule

9 promulgated under section 2 to enjoin such viola10 tion.

11 (2) An action to recover for actual monetary

12 loss from such a violation in an amount equal to the

13 greatest of—

14 (A) the amount of such actual monetary

15 loss; or

16 (B) $1,000 for each such violation, not to

17 exceed a total of $50,000.

18 (b) ADDITIONAL REMEDIES.—If the court finds that

19 the defendant willfully, knowingly, or repeatedly violated

20 a rule promulgated under section 2, the court may, in its

21 discretion, increase the amount of the award to an amount

22 equal to not more than three times the amount available

23 under subsection (a)(2).

24 (c) ATTORNEY FEES.—In any such action, the court

25 may, in its discretion, require an undertaking for the pay26 ment of the costs of such action, and assess reasonable
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1 costs, including reasonable attorneys’ fees, against any

2 party.

3 (d) PROTECTION OF TRADE SECRETS.—At the re4 quest of any party to an action brought pursuant to this

5 section or any other participant in such an action, the

6 court may, in its discretion, issue protective orders and

7 conduct legal proceedings in such a way as to protect the

8 secrecy and security of the computer, computer network,

9 computer data, computer program, and computer software

10 involved in order to prevent possible recurrence of the

11 same or a similar act by another person and to protect

12 any trade secrets of any such party or participant.

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