BERKELEY, Calif. (CN) - Mary Ross, president of Californians for Consumer Privacy, said Thursday big firms that make money selling consumers' personal data know more about us than we may think.
"'If you only knew how much we knew about you, you wouldn't be able to sleep at night,'" a Google engineer told Ross' colleague and lead sponsor of a California measure seeking to give consumers more control over personal data, Ross said in a panel discussion at UC Berkeley School of Law. "And so here we are."
If it passes in November, the California Consumer Privacy Act of 2018 would give consumers the right to request what types of personal information companies collect about them and to whom they sell it. They would also be able to stop companies from selling their information without being denied service or charged higher prices, and to sue over data breaches without having to prove the breach harmed them.
The initiative was proposed last September with backing from Alastair Mactaggart, a San Francisco real estate developer. Recent revelations that Facebook allowed British political consulting firm Cambridge Analytica to scrape the data of 87 million users during the 2016 presidential elections in the United States could give the initiative a major boost.
But Lothar Determann, a law professor at UC Berkeley and UC Hastings, warned that the measure will harm businesses throughout the United States if they can no longer sell data or offset the lost revenue by denying services or charging more for them.
"As a U.S. company, this is going to be a big hit to the business model," Determann said, adding that the free-services model exemplified by services like Google Maps will be impacted.
Moreover, Determann, who is also an attorney with Baker & McKenzie in Palo Alto, Calif., said the initiative will suppress technological progress. Europe, which has tighter privacy standards, is five to ten years behind the United States technologically because of them, according to Determann.
"I don't think we would have [Google] Maps, social media, virtual worlds, self-driving cars, if you have to give a privacy notice, an opt out. I think it would just throw everything behind," he said.
Ross disputed that the measure will hurt firms. But she said Apple, Facebook, Google and Microsoft declined to help her team write the measure to make it acceptable to technology companies, which could take a big hit under it.
Facebook, Google, Comcast and Verizon have donated $200,000 each to the Committee to Protect California Jobs to oppose Ross' measure. The committee is sponsored by the California Chamber of Commerce.
However, Facebook announced last week that it will stop donating money to oppose the measure. The announcement came shortly after Facebook chief executive Mark Zuckerberg finished two days of grilling by Congress over the Cambridge Analytica scandal.
"Privacy is something that is protected in our Constitution," Ross told the audience. "I don't think making companies be transparent about what they are collecting is going to change their ability to innovate. It just doesn't make sense to me."
Ross, who used to work for the CIA, used fitness tracking company Fitbit as an example of how opaque data privacy practices can harm users. Fitbit sends data from a patient's Fitbit device to their doctor's office to monitor the patient's health. It also sells that information to data brokers, who in turn sell it to health insurance companies. Those health insurance companies may then deny insurance to patients based on their Fitbit data.
Determann dismissed Ross' example as a "conspiracy theory." He argued that California law already protects user privacy, pointing out that the California Online Privacy Protection Act of 2004 requires companies to disclose with whom user information is shared, and the Song-Beverly Credit Card Act of 1971 prohibits businesses from collecting and sharing credit card information with third parties.
"There is no need to have the additional transparency you're creating here," he told Ross. "If there is a problem with insurance companies, regulate the insurance companies."
But even if the measure passes, it could be preempted by federal law, Determann said. He predicted the initiative will galvanize companies and lawmakers into passing a nationwide law to override it, a prediction quickly shot down by Ross.
"We also have strict car emissions standards that other [states] have to comply with," she said, referring to California's tougher air pollution rules followed by a dozen other states. "If [companies] have to disclose information, it will probably change a company's behavior."
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