Title: Data Care Act of 2018
Policy area: Commerce

Summary:
Data Care Act of 2018
This bill imposes various duties on online service providers with respect to to their handling of user data, including duties to (1) reasonably secure sensitive data from unauthorized access, (2) refrain from using such data in a way that will result in reasonably foreseeable harm to the end user, and (3) not disclose individual identifying data to another party unless that party is also bound by the duties established in this bill. The bill authorizes the Federal Trade Commission and specified state officials to take enforcement actions with respect to breaches of such duties.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3744 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 3744

 To establish duties for online service providers with respect to end 
             user data that such providers collect and use.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 12, 2018

  Mr. Schatz (for himself, Ms. Hassan, Mr. Bennet, Ms. Duckworth, Ms. 
Klobuchar, Mrs. Murray, Mr. Booker, Ms. Cortez Masto, Mr. Heinrich, Mr. 
Markey, Mr. Brown, Ms. Baldwin, Mr. Jones, Mr. Manchin, and Mr. Durbin) 
introduced the following bill; which was read twice and referred to the 
           Committee on Commerce, Science, and Transportation

_______________________________________________________________________

                                 A BILL


 
 To establish duties for online service providers with respect to end 
             user data that such providers collect and use.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Data Care Act of 2018''.

SEC. 2. DEFINITIONS.

    In this Act--
            (1) the term ``Commission'' means the Federal Trade 
        Commission;
            (2) the term ``end user'' means an individual who engages 
        with an online service provider or logs into or uses services 
        provided by the online service provider over the internet or 
        any other digital network;
            (3) the term ``individual identifying data'' means any data 
        that is--
                    (A) collected over the internet or any other 
                digital network; and
                    (B) linked, or reasonably linkable, to--
                            (i) a specific end user; or
                            (ii) a computing device that is associated 
                        with or routinely used by an end user;
            (4) the term ``online service provider'' means an entity 
        that--
                    (A) is engaged in interstate commerce over the 
                internet or any other digital network; and
                    (B) in the course of business, collects individual 
                identifying data about end users, including in a manner 
                that is incidental to the business conducted; and
            (5) the term ``sensitive data'' means any data that 
        includes--
                    (A) a social security number;
                    (B) personal information (as defined in section 
                1302 of the Children's Online Privacy Protection Act of 
                1998 (15 U.S.C. 6501)) collected from a child (as 
                defined in such section 1302);
                    (C) a driver's license number, passport number, 
                military identification number, or any other similar 
                number issued on a government document used to verify 
                identity;
                    (D) a financial account number, credit or debit 
                card number, or any required security code, access 
                code, or password that is necessary to permit access to 
                a financial account of an individual;
                    (E) unique biometric data such as a finger print, 
                voice print, a retina or iris image, or any other 
                unique physical representation;
                    (F) information sufficient to access an account of 
                an individual, such as user name and password or email 
                address and password;
                    (G) the first and last name of an individual, or 
                first initial and last name, or other unique identifier 
                in combination with--
                            (i) the month, day, and year of birth of 
                        the individual;
                            (ii) the maiden name of the mother of the 
                        individual; or
                            (iii) the past or present precise 
                        geolocation of the individual;
                    (H) information that relates to--
                            (i) the past, present, or future physical 
                        or mental health or condition of an individual; 
                        or
                            (ii) the provision of health care to an 
                        individual; and
                    (I) the nonpublic communications or other nonpublic 
                user-created content of an individual.

SEC. 3. PROVIDER DUTIES.

    (a) In General.--An online service provider shall fulfill the 
duties of care, loyalty, and confidentiality under paragraphs (1), (2), 
and (3), respectively, of subsection (b).
    (b) Duties.--
            (1) Duty of care.--An online service provider shall--
                    (A) reasonably secure individual identifying data 
                from unauthorized access; and
                    (B) subject to subsection (c), promptly inform an 
                end user of any breach of the duty described in 
                subparagraph (A) of this paragraph with respect to 
                sensitive data of that end user.
            (2) Duty of loyalty.--An online service provider may not 
        use individual identifying data, or data derived from 
        individual identifying data, in any way that--
                    (A) will benefit the online service provider to the 
                detriment of an end user; and
                    (B)(i) will result in reasonably foreseeable and 
                material physical or financial harm to an end user; or
                    (ii) would be unexpected and highly offensive to a 
                reasonable end user.
            (3) Duty of confidentiality.--An online service provider--
                    (A) may not disclose or sell individual identifying 
                data to, or share individual identifying data with, any 
                other person except as consistent with the duties of 
                care and loyalty under paragraphs (1) and (2), 
                respectively;
                    (B) may not disclose or sell individual identifying 
                data to, or share individual identifying data with, any 
                other person unless that person enters into a contract 
                with the online service provider that imposes on the 
                person the same duties of care, loyalty, and 
                confidentiality toward the applicable end user as are 
                imposed on the online service provider under this 
                subsection; and
                    (C) shall take reasonable steps to ensure that the 
                practices of any person to whom the online service 
                provider discloses or sells, or with whom the online 
                service provider shares, individual identifying data 
                fulfill the duties of care, loyalty, and 
                confidentiality assumed by the person under the 
                contract described in subparagraph (B), including by 
                auditing, on a regular basis, the data security and 
                data information practices of any such person.
    (c) Expansion of Duty To Inform Regarding Breaches.--The Commission 
may promulgate regulations under section 553 of title 5, United States 
Code, to apply the breach notification requirement under subsection 
(b)(1)(B) with respect to specific categories of individual identifying 
data other than sensitive data, as the Commission determines necessary.
    (d) Exceptions.--
            (1) Regulations.--The Commission may promulgate regulations 
        under section 553 of title 5, United States Code, to exempt 
        categories of online service providers from the requirement 
        under subsection (a).
            (2) Considerations.--In promulgating regulations under 
        paragraph (1), the Commission shall consider, among other 
        factors--
                    (A) the privacy risks posed by the use of 
                individual identifying data by an online service 
                provider based on--
                            (i) the size of the provider;
                            (ii) the complexity of the offerings of the 
                        provider;
                            (iii) the nature and scope of the 
                        activities of the provider; and
                            (iv) the sensitivity of the consumer 
                        information handled by the provider; and
                    (B) the costs and benefits of applying the 
                requirement under subsection (a) to online service 
                providers with particular combinations of 
                characteristics considered under subparagraph (A) of 
                this paragraph.

SEC. 4. ENFORCEMENT.

    (a) Enforcement by Commission.--
            (1) Unfair or deceptive acts or practices.--A violation of 
        section 3 by an online service provider shall be treated as a 
        violation of a rule defining an unfair or deceptive act or 
        practice prescribed under section 18(a)(1)(B) of the Federal 
        Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
            (2) Powers of commission.--
                    (A) In general.--Except as provided in subparagraph 
                (C), the Commission shall enforce this Act in the same 
                manner, by the same means, and with the same 
                jurisdiction, powers, and duties as though all 
                applicable terms and provisions of the Federal Trade 
                Commission Act (15 U.S.C. 41 et seq.) were incorporated 
                into and made a part of this Act.
                    (B) Privileges and immunities.--Except as provided 
                in subparagraph (C), any person who violates section 3 
                shall be subject to the penalties and entitled to the 
                privileges and immunities provided in the Federal Trade 
                Commission Act (15 U.S.C. 41 et seq.).
                    (C) Nonprofit organizations and common carriers.--
                Notwithstanding section 4 or 5(a)(2) of the Federal 
                Trade Commission Act (15 U.S.C. 44, 45(a)(2)) or any 
                jurisdictional limitation of the Commission, the 
                Commission shall also enforce this Act, in the same 
                manner provided in subparagraphs (A) and (B) of this 
                paragraph, with respect to--
                            (i) organizations not organized to carry on 
                        business for their own profit or that of their 
                        members; and
                            (ii) common carriers subject to the 
                        Communications Act of 1934 (47 U.S.C. 151 et 
                        seq.).
            (3) Rulemaking authority.--The Commission shall promulgate 
        regulations under this Act in accordance with section 553 of 
        title 5, United States Code.
    (b) Enforcement by States.--
            (1) Authorization.--Subject to paragraph (3), in any case 
        in which the attorney general of a State has reason to believe 
        that an interest of the residents of the State has been or is 
        threatened or adversely affected by the engagement of an online 
        service provider in a practice that violates section 3, the 
        attorney general of the State may, as parens patriae, bring a 
        civil action against the online service provider on behalf of 
        the residents of the State in an appropriate district court of 
        the United States to obtain appropriate relief, including civil 
        penalties in the amount determined under paragraph (2).
            (2) Civil penalties.--An online service provider that is 
        found, in an action brought under paragraph (1), to have 
        knowingly or repeatedly violated section 3 shall, in addition 
        to any other penalty otherwise applicable to a violation of 
        section 3, be liable for a civil penalty equal to the amount 
        calculated by multiplying--
                    (A) the greater of--
                            (i) the number of days during which the 
                        online service provider was not in compliance 
                        with that section; or
                            (ii) the number of end users who were 
                        harmed as a result of the violation; by
                    (B) an amount not to exceed the maximum civil 
                penalty for which a person, partnership, or corporation 
                may be liable under section 5(m)(1)(A) of the Federal 
                Trade Commission Act (15 U.S.C. 45(m)(1)(A)) (including 
                any adjustments for inflation).
            (3) Rights of federal trade commission.--
                    (A) Notice to federal trade commission.--
                            (i) In general.--Except as provided in 
                        clause (iii), the attorney general of a State 
                        shall notify the Commission in writing that the 
                        attorney general intends to bring a civil 
                        action under paragraph (1) before initiating 
                        the civil action.
                            (ii) Contents.--The notification required 
                        under clause (i) with respect to a civil action 
                        shall include a copy of the complaint to be 
                        filed to initiate the civil action.
                            (iii) Exception.--If it is not feasible for 
                        the attorney general of a State to provide the 
                        notification required under clause (i) before 
                        initiating a civil action under paragraph (1), 
                        the attorney general shall notify the 
                        Commission immediately upon instituting the 
                        civil action.
                    (B) Intervention by federal trade commission.--The 
                Commission may--
                            (i) intervene in any civil action brought 
                        by the attorney general of a State under 
                        paragraph (1); and
                            (ii) upon intervening--
                                    (I) be heard on all matters arising 
                                in the civil action; and
                                    (II) file petitions for appeal of a 
                                decision in the civil action.
            (4) Investigatory powers.--Nothing in this subsection may 
        be construed to prevent the attorney general of a State from 
        exercising the powers conferred on the attorney general by the 
        laws of the State to--
                    (A) conduct investigations;
                    (B) administer oaths or affirmations; or
                    (C) compel the attendance of witnesses or the 
                production of documentary or other evidence.
            (5) Preemptive action by federal trade commission.--If the 
        Commission institutes a civil action or an administrative 
        action with respect to a violation of section 3, the attorney 
        general of a State may not, during the pendency of the action, 
        bring a civil action under paragraph (1) against any defendant 
        named in the complaint of the Commission based on the same set 
        of facts giving rise to the alleged violation with respect to 
        which the Commission instituted the action.
            (6) Venue; service of process.--
                    (A) Venue.--Any action brought under paragraph (1) 
                may be brought in--
                            (i) the district court of the United States 
                        that meets applicable requirements relating to 
                        venue under section 1391 of title 28, United 
                        States Code; or
                            (ii) another court of competent 
                        jurisdiction.
                    (B) Service of process.--In an action brought under 
                paragraph (1), process may be served in any district in 
                which the defendant--
                            (i) is an inhabitant; or
                            (ii) may be found.
            (7) Actions by other state officials.--
                    (A) In general.--In addition to civil actions 
                brought by attorneys general under paragraph (1), any 
                other consumer protection officer of a State who is 
                authorized by the State to do so may bring a civil 
                action under paragraph (1), subject to the same 
                requirements and limitations that apply under this 
                subsection to civil actions brought by attorneys 
                general.
                    (B) Savings provision.--Nothing in this subsection 
                may be construed to prohibit an authorized official of 
                a State from initiating or continuing any proceeding in 
                a court of the State for a violation of any civil or 
                criminal law of the State.

SEC. 5. NONENFORCEABILITY OF CERTAIN PROVISIONS WAIVING RIGHTS AND 
              REMEDIES.

    The rights and remedies provided under this Act may not be waived 
or limited by contract or otherwise.

SEC. 6. RELATION TO OTHER PRIVACY AND SECURITY LAWS.

    Nothing in this Act may be construed to--
            (1) modify, limit, or supersede the operation of any 
        privacy or security provision in any other Federal or State 
        statute or regulation; or
            (2) limit the authority of the Commission under any other 
        provision of law.

SEC. 7. EFFECTIVE DATE.

    (a) In General.--This Act shall take effect on the date of 
enactment of this Act.
    (b) Applicability.--Section 3 shall apply with respect to an online 
service provider on and after the date that is 180 days after the date 
of enactment of this Act.
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