Bill would regulate internet data brokers

MONTPELIER — The Vermont House late last week passed a bill that would regulate data brokers and provide consumers with protections against companies that collect, analyze and sell their personal information.
Under the legislation, H.764 would require data brokers to register annually with the Vermont Secretary of State’s office and publicly disclose information about data collection practices and opt-out policies.
The bill would also require the companies to ensure they have “adequate security standards” to safeguard against data breaches. In addition, companies must report data breaches when they happen.
Data brokers have come under increased scrutiny after the credit report giant Equifax revealed in September that a security breach exposed the private information of millions of Americans.
Approximately a third of the population of Vermont was affected by the Equifax breach, according to Vermont Attorney Gen. TJ Donovan.
Rep. Bill Botzow D-Bennington, HB 764’s sponsor, said Vermonters are “deeply concerned” about how their information is handled by data brokers.
“In the marketplace you have choice,” Botzow said at a press conference on Thursday morning. “Here you have no choice: people collect, they aggregate your information and they sell your information.”
Data brokers aggregate information about people including internet browsing history, online purchase history and location data.
If H.764 became law, Vermont would be the first state to require data broker to register in a statewide “clearinghouse,” according to Botzow.
The bill narrowly defines data brokers as businesses that aggregate and sell information about consumers without having a “direct relationship” with them.
Under this definition, social media sites and iPhone apps do not qualify as data brokers, according to Botzow.
Rep. Cynthia Browning, D-Bennington, argued that it will be difficult to enforce the system of registration and that many data brokers with access to Vermont consumers’ information will avoid participating.
“The state will not be able to fulfill the promises of protection that have been laid out before you today,” Browning said on the House floor Thursday afternoon.
The bill now heads to the Senate.

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