Data Protection in the United States

The United States follows a sectoral approach to data privacy protection. There is no all-encompassing federal legislation that ensures the privacy and protection of personal data. Instead, legislation at the federal level primarily protects data within sector-specific contexts. In contrast to Europe’s comprehensive Data Protection Directive,1 the United States relies on a combination of legislation at the federal and state levels, administrative regulations, as well as industry specific self-regulation guidelines. Privacy protection guarantees are sector-specific and are located in a myriad of legislative instruments and case law. These statutes apply only to specific sectors such as “healthcare, education, communications, and financial services or, in the case of online data collection, to children.”2 Although, at first glance, comparative legal scholars are likely to dismiss America’s privacy protection framework as less robust than the European approach, in some respects, the American framework provides greater protection than in Europe.3 The first data privacy legislation in the United States,4 the Fair Credit Reporting Act (FCRA), was enacted in 1970.5 The FCRA aimed to impose limits on data sharing in the consumer credit reporting industry and, in particular, to make it easier for individuals to correct reporting errors.6 The FCRA established a tripartite model for subsequent data protection legislation that (i) provided notice to consumers of a specific type of data record, (ii) established an administrative redress procedure administered by a government agency, and (iii) defined the conditions under which law enforcement could access the data by meeting various standards of proof.7 In 1973, the U.S. Department of Health, Education, and Welfare (HEW) published a report entitled Computers and the Rights of Citizens which recommended that the government enact a Code of Fair Information Practices (FIPs).8 Those practices would bind all organizations to comply with a code that would seek to protect personally identifiable information.9 Practices that did not meet the standards of the code would be subject to government sanction.10 In 1974, in the aftermath of the Watergate scandal, Congress ratified the Privacy Act.11 Despite the fact that the HEW report called for legislation that would apply to “all automated personal data systems,”12 the final legislation applied only to federal agency databases.13 The Act declared that “the right to privacy is a personal and fundamental right protected by the Constitution of the United States.”14 The Privacy Act protects personal information that the U.S. General Services Administration maintains in systems of records (SORs).15 Despite the fact that Congress declared its commitment to the right to data privacy in 1974, the United States continues to lack a comprehensive data protection framework. The American latticework of narrowly tailored laws and regulations at the federal and state levels enable government authorities and, in some cases, private individuals to bring lawsuits against organizations that are violating the law. However, in contrast to the European Union’s data protection approach, which in many ways represents the gold standard of privacy protections, the dominant approach in the United States is grounded in consumer protection regulations.16 Accordingly, in the United States, it is the Federal Trade Commission (FTC), an independent U.S. law enforcement agency charged with protecting consumers, which has become the primary privacy enforcement agency. However, because the FTC’s primary legal authority comes from section 5 of the Federal Trade Commission Act,17 the FTC’s jurisdiction is limited to challenging privacy violations by organizations whose information practices have been deemed “deceptive” or “unfair.”18 In that sense, the Privacy Act is not specifically a data privacy law, but rather a system of broad consumer protection laws that have “been used to prohibit unfair or deceptive practices involving the disclosure of, and security procedures for protecting, personal information.”19 In addition to its authority to take action against deceptive or unfair trade practices, Congress has granted the FTC authority to enforce several sector-specific laws which include: the Truth in Lending Act,20 the Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act,21 the Privacy Protection the Credit the Fair Credit Reporting the Fair Practices and the and and In the and Act the FTC which a and consumer for of and the laws In addition to the legislation that comes within the FTC’s are of federal sector-specific legislation is and in that follows the of of Services Act and Act Controlling the Assault of Non-Solicited Pornography and Marketing Act and The Fair Credit Reporting Act Privacy Act The and Act the FTC has become the privacy enforcement agency in the United the agency has its jurisdiction to consumer protection enforcement against that in the United its authority of section 5 of the Federal Trade Commission the FTC has a in privacy and unfair trade practices and enforcement the of the as of the agency and cases, against Fair Credit Reporting Act lawsuits involving data security cases, privacy and under the Privacy Protection Act Congress has to sector-specific privacy it has to the FTC’s enforcement The agency to Congress and the of the of the FTC’s enforcement and have the of a law of and have because the FTC’s enforcement in the of in become a law of privacy that for in privacy the FTC the federal as well as bring under the is by the of Rights within the U.S. Department of and In addition to the enforcement of federal state consumer protection the state privacy the FTC’s primary legal authority comes from section 5 of the Federal Trade Commission which unfair or deceptive practices in the the agency has authority to enforce a of sector-specific the Truth in Lending the the Privacy Protection the Credit the Fair Credit Reporting the Fair Practices and the and and The Commission is to bring enforcement to violations of the law and to to take to These include: of comprehensive privacy and security by independent redress to consumers, of of consumer and of robust and to In the FTC has the to seek against organizations or individuals the FTC as well as against that the Privacy Protection the Fair Credit Reporting and the The of for privacy violations that the FTC has and which to to the FTC’s and to and privacy a of that The in is a robust self-regulation framework that 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