California Senate To Re-Consider Privacy Bill Despite Growing Opposition

California State Senator Ellen Corbett

There’s been growing talk about passing an online privacy law in Congress, but a group of California legislators isn’t going to wait-they’re pushing the issue in Sacramento, backing an online privacy bill backed by State Sen. Ellen Corbett (D-San Leandro). That bill failed in the state senate last week, but Sen. Corbett is looking for a re-vote that could come as soon as today. She’s pushing forward despite strong opposition from business groups and tech companies.

Palo Alto-based Facebook has taken a key role in the opposition to this bill, and was among several “concerned stakeholders” who circulated a “Floor Alert” this morning in the California Senate asking for a no vote on Corbett’s SB 242. The last vote had 16 senators voting in favor of the bill, all Democrats. (21 votes are needed to pass the bill out of the chamber.)

The list of companies opposing the bill includes a who’s-who of big internet companies, and in addition to Facebook the coalition includes Google (NSDQ: GOOG), Twitter, Yahoo (NSDQ: YHOO), LinkedIn (NYSE: LNKD), Zynga, Match.com. Several startups are also on board, including BranchOut, Rdio, Gigya, Oodle, Zecco, and Identified.

The bill would require social networks to make users’ settings private by default, and have information shared only on an opt-in basis. It would also require new users to verify their privacy settings during the registration process. Companies that violate the rules could be liable for fines of up to $10,000 per violation.

Corbett has said the bill is needed to protect users’ privacy, and prevent identity theft. “You shouldn’t have to sign in and give up your personal information before you get to the part where you say, ‘Please don’t share my personal information,’ ” Corbett told the San Francisco Chronicle when she introduced the bill a few weeks ago.

Those opposed to the bill in the last vote included 14 Republicans and two Democrats. Two of the bill’s Republican opponents, State Sens. Sam Blakeslee (R-San Luis Obispo) and Tom Harman (R-Huntington Beach), have published an op-ed in today’s SF Chron explaining why they don’t support the bill. Blakeslee and Harman say the bill could endanger the great success that internet companies have seen so far in California. They also argue the bill as written violates the U.S. Constitution because it imposes California’s authority beyond the territorial boundaries of the state.

The California Legislature has regulated online privacy once before; indeed, it’s a California state law that requires most online businesses to have published privacy policies. And laws related to data security have been handled for years on a state-by-state basis, although at this point, some companies have recognized that isn’t such a good thing.

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