I
107TH CONGRESS
1ST SESSION
H. R. 2135
To protect consumer privacy.
IN THE HOUSE OF REPRESENTATIVES
JUNE 12, 2001
Mr. SAWYER introduced the following bill; which was referred to the
Committee on Energy and Commerce
A BILL
To protect consumer privacy.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Consumer Privacy Pro-
tection Act’’.
SEC. 2. FINDINGS AND PURPOSE.
(a) FINDINGS.—The Congress finds the following:
(1) People in the United States lack important
privacy protections.
(2) The opportunities for an individual to se-
cure employment, insurance, and credit, to obtain
medical care, and to participate in electronic com-
merce are endangered by the potential for misuse of
certain personal information.
(3) Because markets work through trust, pre-
dictability, and stability, privacy protections should
help businesses gain the trust of consumers and
compliment existing practices.
(4) 84 percent of Internet users are concerned
about businesses and people they do not know ob-
taining personal information about them.
(5) Nearly 80 percent of online consumers have
at some time abandoned e-commerce transactions
due to privacy concerns, resulting in an estimated
loss to companies of $12.4 billion in 2000.
(6) In order to protect the privacy of individ-
uals in the Information Age, it is necessary and ap-
propriate for public officials to take steps to safe-
guard this essential freedom.
(b) PURPOSE.—The purpose of this Act is to assure
that personal information about an individual consumer
in the United States is properly protected and that any
use of such information by others is consistent with the
prior consent of the consumer.
SEC. 3. PROTECTION OF PERSONAL INFORMATION.
(a) LIMITATIONS ON DISCLOSURE OF PERSONAL IN-
FORMATION.—An information recipient shall not disclose
to any other person personal information collected or ob-
tained from or about a consumer, unless—
(1) such disclosure is made after the consumer
has been provided with a clear and concise descrip-
tion of the extent and circumstances under which
such a disclosure may occur;
(2) such disclosure does not exceed the scope of
the consumer’s prior consent, which shall be—
(A) in the case of disclosure of personal in-
formation, granted tacitly or affirmatively by
the consumer after receiving the description re-
quired by paragraph (1); or
(B) in the case of disclosure of sensitive
personal information, granted affirmatively by
the consumer after receiving the description re-
quired by paragraph (1); and
(3) the consent granted under paragraph (2)
has not subsequently been withdrawn by the con-
sumer.
(b) LIMITATION ON COLLECTION OF OPTIONAL IN-
FORMATION.—An information recipient may not require
a consumer to provide, as a condition of entering into or
completing a transaction with the information recipient,
personal information that is not necessary to complete the
transaction.
(c) LIMITATION ON REFUSAL TO TRANSACT.—An in-
formation recipient may not terminate or refuse to enter
into a transaction with a consumer because the consumer
has not granted, or has withdrawn, the consent required
by subsection (a), except when the sole purpose of the
transaction is the acquisition of such information for dis-
closure.
(d) REASONABLE ACCESS TO PERSONAL INFORMA-
TION.—An information recipient shall provide to a con-
sumer about whom personal information has been ob-
tained reasonable access to the consumer’s personal infor-
mation.
SEC. 4. EXCEPTIONS.
Section 3 does not apply to the disclosure of personal
information—
(1) as necessary to effect, administer, or en-
force a transaction requested or authorized by the
consumer;
(2) to protect the confidentiality or security of
personal information;
(3) to prevent or investigate fraud, an unau-
thorized transaction, a claim, or other liability;
(4) to collect a debt or dishonored item;
(5) for the purpose of a securitization or sec-
ondary market sale (including servicing rights);
(6) for the purposes of legal process;
(7) for law enforcement purposes;
(8) for governmental regulatory purposes;
(9) as otherwise authorized or required under a
Federal law; or
(10) if the Federal Trade Commission has
made a finding that such a disclosure is consistent
with the purposes of this Act and in the public inter-
est.
SEC. 5. UNFAIR OR DECEPTIVE ACT OR PRACTICE.
(a) VIOLATION OF ACT.—Disclosure of personal in-
formation about a consumer in a manner that violates this
Act constitutes an unfair or deceptive act or practice in
or affecting commerce (within the meaning of section
5(a)(1) of the Federal Trade Commission Act (15 U.S.C.
45)).
(b) VIOLATION OF RULE.—Violation of a rule made
under this Act constitutes violation of a rule defining an
unfair or deceptive act or practice made under section
18(a)(1)(B) of the Federal Trade Commission Act (15
U.S.C. 57a(a)(1)(B)).
SEC. 6. SAFE HARBOR.
(a) PRACTICES AND PROCEDURES, GUIDELINES.—A
person does not commit a violation of this Act if such
person—
(1) establishes, implements, and follows reason-
able practices and procedures to effectively prevent
a violation of this Act;
(2) implements and follows a set of guidelines
setting forth reasonable practices and procedures to
effectively prevent a violation of this Act, if such
guidelines are—
(A) issued by a self-regulatory organization
to which such person is, or could be, subject;
and
(B) approved under subsection (b), after
submission by such organization to the Federal
Trade Commission; or
(3) implements and follows a set of model
guidelines issued by the Commission, after notice
and opportunity for comment, setting forth reason-
able practices and procedures to effectively prevent
a violation of this Act.
(b) APPROVAL OF GUIDELINES.—Not later than 90
days after receiving a request by a self-regulatory organi-
zation for approval of guidelines under subsection (a)(2)
and after notice and an opportunity for comment, the Fed-
eral Trade Commission shall approve or disapprove such
proposed guidelines (setting forth in writing the reasons
for any disapproval).
SEC. 7. PRIVATE RIGHT OF ACTION.
A consumer may bring in an appropriate district
court of the United States or, if otherwise permitted by
the laws or rules of court of a State, in an appropriate
court of that State—
(1) a civil action to enjoin a violation of this
Act;
(2) a civil action to recover—
(A) the greater of actual monetary loss or
$1,000 in damages for each such violation; and
(B) up to $10,000, to be determined in the
discretion of the court, if the court finds that
the defendant willfully or knowingly violated
such rules; or
(3) both such actions.
SEC. 8. ACTIONS BY STATES.
(a) AUTHORITY OF STATES.—Whenever the attorney
general of a State, or an official or agency designated by
a State, has reason to believe that any person has engaged
or is engaging in a pattern or practice of violations of this
Act, the State, on behalf of its residents, may bring—
(1) a civil action to enjoin such violations; and
(2) a civil action to recover—
(A) the greater of actual monetary loss of
such residents or $1,000 in damages for each
such violation; and
(B) up to $10,000, to be determined in the
discretion of the court, if the court finds that
the defendant willfully or knowingly violated
such rules; or
(3) both such actions.
(b) 
EXCLUSIVE
JURISDICTION
OF
FEDERAL
COURTS.—(1) The district courts of the United States
shall have exclusive jurisdiction over all civil actions
brought under this section.
(2) Upon a proper showing in a civil action brought
under this section, a permanent or temporary injunction
or restraining order shall be granted without bond.
(c) RIGHTS OF FEDERAL TRADE COMMISSION.—(1)
The State shall serve prior written notice of any civil ac-
tion brought under this section upon the Federal Trade
Commission and provide the Commission with a copy of
its complaint, except in any case where such prior notice
is not feasible, in which case the State shall serve such
notice immediately upon instituting such action.
(2) The Commission shall have the right—
(A) to intervene in the action;
(B) upon so intervening, to be heard on all
matters arising therein; and
(C) to file petitions for appeal.
(d) LIMITATION.—Whenever the Federal Trade Com-
mission has commenced a civil action for violation of this
Act, no State may, during the pendency of such action
commenced by the Commission, subsequently commence
a civil action against any defendant named in the Commis-
sion’s complaint for any violation as alleged in the Com-
mission’s complaint.
SEC. 9. PREEMPTION.
This Act and the rules made under this Act preempt
any inconsistent provision of State law.
SEC. 10. DEFINITIONS.
In this Act:
(1) The term ‘‘information recipient’’ means
any person who obtains personal information from
or about a consumer, through a transaction in or af-
fecting interstate or foreign commerce. Such term
does not include—
(A) an affiliate, parent entity, or sub-
sidiary of such person; or
(B) the consumer about whom such infor-
mation has been obtained.
(2) The term ‘‘consumer’’ means an individual
who is or was in a consumer relationship with an in-
formation recipient.
SEC. 12. EFFECTIVE DATE.
This Act (other than section 11) shall take effect on
the same date that the rules prescribed under section 11
take effect.
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