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Two pieces of potential federal legislation would regulate how marketers can use consumer data, as well as establish their responsibilities in the case of data breaches. The laws would seek to bring some harmony to the vast range of different rules and laws covering such topics that currently appear at the state level.

Business people working in video conferenceThe Student Data Privacy Act would focus specifically on companies that provide the hardware or software that enable schools and teachers to provide their pupils with tablets and other connected devices. The rules would limit the kinds and amount of data these providers can collect about their users, and then how they can use the data they do collect. For example, online homework systems can link students’ performance to customized lesson plans for the future, but the legislation would make sure that they cannot tell an external marketer that a particular student really struggles with her economics lesson or his math homework. Furthermore, parents are calling for restrictions on data about students’ disciplinary records. California already has rules in place that limit companies from gathering information about students for any marketing purposes.

The Personal Data Notification and Protection Act instead would pertain to all consumers, not just students. Under this proposed law, companies would be required to notify all customers of data breaches within 30 days of the event. In addition, it would confirm that selling people’s personal data overseas is a crime and grant the U.S. Federal Trade Commission authority to penalize companies that failed to meet the protection and notification standards

In calling for Congress to pass these pieces of legislation, President Obama sought to make his position on data security clear: “If we’re going to be connected, then we need to be protected. As Americans, we shouldn’t have to forfeit our basic privacy when we go online to do our business,” he proclaimed.

Discussion Question:

Are such national regulations necessary? Why or why not?

SOURCE:Michael D. Shear and Natasha Singer, “Obama to Call for Laws Covering Data Hacking and Student Privacy,” The New York Times, January 11, 2014, http://www.nytimes.com

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