Computer data

Michigan's 1988 Preservation of Personal Privacy Act provides deterrents to companies that trade in your personal information. A revision of the act, which has passed the Legislature, will loosen the prohibitions, diminish the penalties and leave Michiganders with no remedy, the writers argue.

(AP files)

Ari Scharg is a partner and chair of the Privacy & Data Security Group for the Edelson PC law firm in Chicago. He graduated from the University of Michigan with a bachelor's degree in 2004. David Mindell is an associate at Edelson PC and helps lead the firm's Case Development & Investigations Group. He graduated from the James Madison College at Michigan State University in 2009.

Ari Scharg and David Mindell

By Ari Scharg and David Mindell

Silicon Valley hates privacy laws. And it's no surprise why. Companies like Facebook, Google and Instagram succeed by collecting and monetizing consumer data, and their exploitation of it makes them billions. It is little surprise then that more traditional companies -- like magazine publishers -- have attempted to jump into the data game. Borrowing from Silicon Valley, more of these companies are trying to find sneaky ways to collect our most sensitive data and profit from it.

But Silicon Valley and its followers have one major problem: Americans actually value their privacy. Because of this, when privacy issues come up in state and federal legislatures, constituents demand that privacy rights remain protected, if not broadened.

Today, privacy is debated on a daily basis. How do we protect financial information? Medical records? What about our biometric information? What about the books we read, the music we listen to and the movies we watch? When polled, the public resoundingly answers with one voice: protect us. But your privacy is a threat to the bottom line. That puts corporate America in a pickle: How can they subvert privacy rights against the will of the people? The answer: Do it in the dark and with as much misdirection as possible.

That's what is happening in the Michigan Legislature right now. Big Data is on the cusp of stripping one the nation's best privacy laws down to a shadow of its former self.

For the past 27 years, Michiganders have enjoyed some of the nationas strongest privacy protections under Michigan's Preservation of Personal Privacy Act. This law was enacted in 1989 to protect Michiganders' choices in reading materials (like magazines), video materials (like movies) and sound recordings (like music), by prohibiting businesses from disclosing records identifying the consumption of those materials to third parties except in certain circumstances, such as with the customer's permission. To ensure that companies abide by the law, the act requires violators to pay consumers $5,000 when they violate it.

Businesses got away with violating this law for years before Michiganders discovered they were secretly exploiting their personal information. Although they did not get consent to collect and sell their data, many publishers routinely sell their customers' magazine subscription records to third parties, including data miners and brokers, for a premium. That's because subscription records provide a window into each individualas loves, likes and dislikes. For example, Big Data infers that subscribers to gun enthusiast magazines likely own guns and that subscribers to LGBT-related magazines are gay. The data miners then sell these inferences to anybody willing to pay for them, and in doing so, generate over $60 billion per year.

Only after Michiganders began suing these companies for violating the act did businesses start complying with the law. These companies don't want to have to tell consumers before they collect and sell their data, though -- it would scare consumers away. As such, out-of-state companies got together to "fix" the problem: Forget about complying with the act -- which simply means getting consent from consumers before selling their data -- instead, make it toothless.

So these companies started lobbying to eviscerate one of the nation's best privacy laws. What they want is: (1) a free pass to sell your personal information to data miners without having to tell you or get your permission, and (2) to strip away the statutory damages remedy, thus virtually guaranteeing that you won't ever enforce the law and, in turn, guaranteeing that the act (and your privacy rights) will be ignored.

And what they got is Senate Bill 490, sponsored by Sen. Tonya Schuitmaker, R-Lawton. It's now on the governor's desk.

Here's an example to illustrate how this impacts you. There are two federal laws that regulate certain marketing practices -- the Telephone Consumer Protection Act (TCPA) and the CAN-SPAM Act. Under the TCPA, if a business blasts your cell phone with unsolicited text messages, you can sue the caller and potentially recover $500 in damages (and consumers do -- they have been successfully forcing companies to stop this type of telemarketing for years). But if a company fills your email inbox with junk, you can't do anything about it because, like what's being proposed in Michigan, CAN-SPAM doesn't allow private damages from a breach. The impact: You rarely get unsolicited texts, while your email accounts are bombarded with spam.

Here, the impact will be much worse. If Gov. Rick Snyder signs the bill into law, Silicon Valley wins; your most personal and intimate data will be sold and traded on the open market, and there won't be anything you can do to stop it.

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