President Trump signed congressional legislation Monday night that repeals the Federal Communications Commission's privacy protections for Internet users, rolling back a landmark policy from the Obama era and enabling Internet providers to compete with Google and Facebook in the online ad market.
The Obama-backed rules — which would have taken effect later this year — would have banned Internet providers from collecting, storing, sharing and selling certain types of customer information without user consent. Data such as a consumer's Web browsing history, app usage history, location details and more would have required a customer's explicit permission before companies such as Verizon and Comcast could mine the information for advertising purposes.
Evan Greer, campaign director for the Internet activism group Fight for the Future, condemned the move, saying it was “deeply ironic” for Trump to sign the legislation while complaining about the privacy of his own communications in connection with the FBI's probe into his campaign's possible links with Russia.
“The only people in the United States who want less Internet privacy are CEOs and lobbyists for giant telecom companies, who want to rake in money by spying on all of us and selling the private details of our lives to marketing companies,” said Greer.
Trump signed the legislation with little fanfare Monday evening, a contrast to other major executive actions he has taken from the Oval Office. The move prohibits the FCC from passing similar privacy regulations in the future. And it paves the way for Internet providers to compete in the $83 billion market for digital advertising.
By watching where their customers go online, providers may understand more about their users' Internet habits and present those findings to third parties. While companies such as Comcast have pledged not to sell the data of individual customers, those commitments are voluntary and as a result of Trump's signature, not backed by federal regulation.
Trump's FCC chairman, Ajit Pai, said the Federal Trade Commission, not the FCC, should regulate Internet providers' data-mining practices.
“American consumers’ privacy deserves to be protected regardless of who handles their personal information,” he said in a statement Monday evening.
The FTC currently has guidelines for how companies such as Google and Facebook may use customers' information. Those websites are among the world's biggest online advertisers, and Internet providers are eager to gain a slice of their market share. But critics of the FCC privacy rules argued that the regulations placed stricter requirements on broadband companies than on tech firms, creating an imbalance that could only be resolved by rolling back the FCC rules and designing something new.
The FTC is empowered to bring lawsuits against companies that violate its privacy guidelines, but it has no authority to create new rules for industry. It also currently cannot enforce its own guidelines against Internet providers due to a government rule that places those types of companies squarely within the jurisdiction of the FCC and out of the reach of the FTC.
As a result, Internet providers now exist in a “policy gap” in which the only privacy regulators for the industry operate at the state, not federal, level, analysts say. They add that policymakers are likely to focus next on how to resolve that contradiction as well as look for ways to undo net neutrality, another Obama-era initiative that bans Internet providers from discriminating against websites.