A measure approved by the California State Assembly has put Internet privacy on center stage, but won’t solve the real problem of identity theft, according to the American Insurance Association (AIA).
“A real-life hacking incident has brought the issue of Internet privacy home to members of the California Legislature,” Bill Gausewitz, AIA assistant vice president, western region, remarked. “Just last week it was announced that California’s Teale Data Center was broken into by computer hackers, compromising the personal financial records of all 260,000 state employees. Unfortunately, the bill just approved by the Assembly would not prevent this from happening again. Worse, it would generate frivolous and costly class action lawsuits against companies that conduct business over the Internet.”
AB 2297, authored by Assemblyman Joe Simitian (D-Palo Alto), would require any individual or company doing business on the Internet to post and comply with their own privacy policies. In addition, it would also require those individuals and business to notify all possibly affected persons whenever the privacy policy is breached.
AIA and several major business organizations have been actively opposing this measure because they state it would expose business Web sites to frivolous class action lawsuits and unnecessary notice requirements for minor infractions.
“Current law allows individuals to sue businesses that commit unfair business practices,” Gausewitz commented. “The notice requirements in this bill would essentially hand the trial bar a list of potential litigants to contact and recruit for a class action suit. This bill does not distinguish between harmless violations of a privacy policy and major breaches that could actually endanger consumers’ information.”
“The author has committed to continue working with the opposition, but we have so far been unable to bridge our disagreements about this bill,” Gausewitz concluded.
The California State Assembly approved AB 2297 on a 41-26 vote. The bill will now move to the California State Senate for consideration.
Topics Lawsuits California
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