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As Congress mulls AI, Biden asks first for data privacy law

Congress could eventually run into a similar issue with AI as data privacy -- states passing a patchwork of laws that become difficult for businesses to comply with.

The Biden administration is pushing for a federal data privacy law that could be foundational for federal and business frameworks guiding artificial intelligence use.

President Joe Biden's executive order on AI issued Oct. 30 said Congress needs to pass a bipartisan data privacy law to better protect privacy, including from AI risks. Though data privacy laws have been proposed in Congress, none have passed into law, leaving a patchwork of state data privacy laws for businesses to comply with -- a pattern that could be repeated with AI if Congress takes years to act.

Data privacy protections are a "core component" of AI governance -- a framework for AI use -- and serve as a building block that other countries have already established through data privacy laws, said Caitlin Fennessy, vice president and chief knowledge officer at the International Association of Privacy Professionals. Fennessy said the White House demonstrates in the executive order that it recognizes that data is integral for AI models and that strong data protection is a "prerequisite to AI governance."

Fennessy said there is a clear path to data privacy legislation in the U.S., given the progress of the American Data Privacy and Protection Act (ADPPA), a bipartisan data privacy bill that advanced further than any previously proposed data privacy legislation. It failed to pass into law in 2022, but the House Subcommittee on Innovation, Data and Commerce held a hearing in March to restart the process of advancing a federal data privacy law.

"There is already bipartisan consensus on privacy legislation and what 'good' looks like in that lane," Fennessy said. "The president likely sees more near-term opportunity for that and recognizes with the executive order that there is an urgency to act on AI governance. But at the same time, he recognizes that Congress is not ready to act on that issue."

Likelihood of a U.S. data privacy law advancing

Bills such as the ADPPA show that Congress is slowly working toward compromising on a federal data privacy law, said Daniel Castro, director of the Center for Data Innovation, which is part of the Information Technology and Innovation Foundation (ITIF). He said that for the ADPPA, congressional leaders struggled to compromise on state preemption and private right of action -- something they will have to come to the table on for a data privacy law to advance.

Fennessy said she believes the U.S. is "one news cycle away from privacy legislation."

"The bipartisan consensus is there, the framework and the text is there, so with minor tweaks around the edges, I think we could have a bill that could fly through Congress," she said.

Especially as Congress will face the challenge of tackling AI governance as a whole, Fennessy said privacy will become low-hanging fruit.

If we think of data privacy as a space where a patchwork was challenging, I think AI is going to be even more challenging.
Caitlin FennessyVice president and chief knowledge officer, International Association of Privacy Professionals

"As Congress tries to tackle these issues more broadly, it will become obvious that privacy is a key component and the easiest one to make progress on quickly," she said.

States could create patchwork of AI laws

In lieu of Congress passing a federal data privacy law, states began passing their own laws. The same thing could happen with AI -- something slowly beginning in a handful of states.

Fennessy said another patchwork of state laws, particularly for a technology such as AI, would be challenging for businesses.

"At some point, the question will just become, does Congress want to take back leadership at the federal level in this space? Is the patchwork becoming unworkable for companies in need of a more comprehensive solution? If we think of data privacy as a space where a patchwork was challenging, I think AI is going to be even more challenging," she said.

ITIF's Castro said it is a challenge that business leaders are already concerned about.

"When you look at all the startups in this space, they're little -- they don't have a legal team that can track every city and state's new AI bills," he said. "So it is an issue."

Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget Editorial, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.

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