By: Chloe Scott
The Senate Finance Committee on Wednesday voted against a bill that would alert consumers if stores are using technology to monitor their shopping behavior.
Delegate William Smith of District 20 of Montgomery County introduced House Bill 305 with multiple co-sponsors as a simplistic measure to ensure people have a visible notice that their information is being obtained. This notice allows customers to opt out of consumer profiling by turning off their Wi-Fi option on their phones. Customer profiling is a marketing opportunity that local stores use to monitor behavior through mobile devices.
Delegate Will Smith and his co-sponsors introduced this bill in 2015 when advocates of consumer privacy rights addressed privacy issues and profiling at local stores in Takoma Park and Silver Spring.
In 2015, the bill was passed by the House of Delegates, but not in
the Senate Finance Committee. Prior introduction of a consumer protection bill includes House Bill 1094 of 2015, which passed the House as amended but received an unfavorable report from the Senate Finance Committee. And a similar bill, House Bill 924 in 2014, passed in the House and received by hearing in the Senate Finance Committee. No further action was taken in the hearing or in cross filing.
For 2016, the bill has undergone amendments to establish a middle ground with the House and the Senate. The original $5,000 criminal penalty for consumer profiling has been replaced with a $500 civil offense. The placement of the sign to let customers know that they are being monitored has been tailored to placement at the main entrance.
House Bill 305 enforces the required notice to be displayed at each entrance to the merchant’s business premises, on the consumer’s wireless device, or through any other means to provide the notice to consumers. A notice on a merchant’s website is not considered to be a reasonably calculated notice.
Jason Alinsky, Smith’s chief of staff, said he is hopeful that the bill will be passed in the finance committee this year. “We are providing technological advancement awareness to citizens,” Alinsky said.
The bill’s imposition of existing penalty provisions does not have a fiscal impact on state finances or operations, according to a policy note from the Department of Legislative Services. If the Consumer Protection Division of the Office of the Attorney General receives fewer than 50 complaints per year stemming from the bill, the additional workload can be handled with existing resources. No fiscal impact will be put on local government finances or operations.
Delegate Smith teamed up with a professor of cyber privacy to ensure his constituents have access to justice. “We are not stopping the practice, we are saying that people have a right to be notified,” Smith said.
House Bill 305 prohibits a merchant from using specified technology to monitor the behavior or shopping habits of a consumer unless the merchant provides a specified notice in a specified manner. Violation of this is an unfair or deceptive trade practice under the Maryland Consumer Protection Act and is subject to specified enforcement and penalty provisions.
The Maryland Consumer Protection Act is intended to provide minimum standards for the protection of consumers in the State. A merchant may not engage in any “unfair or deceptive trade practice” when renting, selling, or offering to rent or sell to a consumer under Maryland Code.