Tech consortium disappointed that Senate privacy bill didn’t pass

Courtesy of the Washington Technology Industry Association

Last summer, Sen. Reuven Carlyle, a Seattle Democrat, assembled a bipartisan group of five state senators to meet with a group of 15 local tech leaders to discuss policy priorities and brainstorm steps that should be taken to help our economy grow.

An important idea that emerged from that discussion was the need for Washington to enact well-reasoned legislation to protect the personal privacy of state residents. The law enacted in California in 2018 was the outcome of a rushed process and most observers viewed it as flawed. The California State Assembly is still grappling with the consequences of their actions, and the Washington group did not want to repeat that mistake.

It also was clear that, despite nationally publicized hearings calling tech executives onto the carpet, we could not rely on Congress to act on this important issue given the deeply divided political climate in our nation’s capital.

It is not often that the tech industry asks to be regulated. But in the case of personal privacy, customer confidence is essential to a vibrant tech economy. Dozens of spectacular data breaches in the past few years – from Equifax to Target, to name only two – have eroded confidence in basic data security. The Cambridge Analytica scandal underscored that self-regulation is not sufficient when it comes to privacy.

With a state economy that is highly dependent on the tech sector, Washington needs strong consumer protections to rebuild their trust and ensure continued success for local companies.

For eight months, the companies that attended that initial meeting, along with many others both large and small who joined later, provided input to the state senators. Other stakeholders were asked to provide input as well. The resulting Senate Bill 5376 had strong bipartisan support – it passed with a unanimous committee vote and an impressive 46-1 floor vote.

That bill would have provided consumers important controls they do not currently have, including control over what data companies collect, how they store and use the data, whether they can sell it, and when companies must delete your information. Better yet, it would have delivered these significant new protections in a regulatory framework that would encourage and enable rapid compliance.

The Washington Technology Industry Association (WTIA) is a consortium of more than 1,100 tech companies of all sizes. Most WTIA member companies do not prioritize engagement in legislative matters, but dozens did on this topic. Our members are keen on a proactive privacy policy because they understand that customers will only continue to use online services if they can trust their data will be safe and they have control over its use.

Unfortunately, after Senate passage, the bill stalled in the House. Differences between the chambers could not be resolved. The ACLU, which often plays a valuable role in protecting individual interests, took an aggressive stand that did not allow for even modest compromise, even if that spelled doom for Washington’s effort.

Washington’s technology sector is terribly disappointed in this outcome. There is no bill, despite nearly a year of effort to sort out reasonable mechanics of this complex topic and provide important new privacy protections for Washington residents.

Despite this setback, we see hope for the future. Another idea raised in our legislative dialogue last summer was the need for new policy to give legal status to distributed ledger (also known as blockchain) technology. A bipartisan effort informed by technology experts resulted in the recent signing of SB 5638, which recognizes the validity of this technology. We are now poised to lead the country in the use of smart contracts, leading to reduced administrative processing time, the launch of new businesses, and more jobs.

Privacy regulation should be developed through a similar process. It is essential to our industry and the future of our state. With the federal government unlikely to act anytime soon, other states are looking to us to set an example. The WTIA will actively urge legislators from all four caucuses and a wide range of stakeholders to work during the interim to resolve any remaining material issues and push for strong consumer privacy protections during the 2020 legislative session.

Michael Schutzler is CEO of the Washington Technology Industry Association (WTIA) and has spent more than 30 years immersed in Seattle’s tech scene as an entrepreneur and angel investor. WTIA is a co-op of more than 1,100 tech companies that serves as a unifying voice for Washington’s tech industry.