APRA’s Data Restriction Changes Fail to Protect American Innovation, US Competitiveness

This session of Congress, leaders of the House Energy and Commerce Committee unveiled the American Privacy Rights Act (APRA). Its most recent iteration introduced several changes to previous drafts of the bill. While some of these changes are a good faith effort to address concerns about previous versions, a closer look shows that there is still work to do.

One area of particular concern is the bill's attempt to right-size regulations on how American companies can use data for research and development. While it is critical for lawmakers to address concerns surrounding data use restrictions, APRA's updates ultimately take a backward approach to the issue and fail to properly solve the problem.

The latest version of APRA would expand the authority of the Federal Trade Commission (FTC) to empower the agency to license new uses of data. While the language might be well-intentioned to introduce flexibility to otherwise rigid data minimization restrictions, this top-down approach essentially outlaws many of the ways information is used by the small businesses, innovative startups, and American companies responsible for developing new technologies. Additionally, this approach fails to consider how data usage needs may change as technology - and the methods businesses use to innovate - evolve over time from the ground up.

Unfortunately, these changes pose a real risk to American innovation and the United States' capacity to compete globally. Data is at the center of AI development, and the ability for companies - both large and small, and across all sectors of the economy - to access, use, and deploy data in a responsible way is critical in ensuring U.S. businesses can continue to innovate. However, broad data minimization provisions paired with top-down licensing requirements would stifle U.S. advancement on the frontier of AI capabilities.

While Congress is right to take steps to protect Americans' data from misuse, leaders in Washington, D.C. must account for the wide-ranging consequences of sweeping federal privacy legislation. Unfortunately, this latest iteration of APRA raises more questions than it answers regarding responsible data usage, and ultimately, a more flexible, bottom-up approach designed to advance - not stifle - American innovation is needed to address these concerns.