A (data) gathering storm?

Editor's note: Howard Fienberg is chief lobbyist and vice president, advocacy for the Insights Association. 

It has been a big year for marketing research and data analytics in the government affairs arena, with wins, losses and new challenges in pharma, the census, telephone research, independent contractor status of insights participants, and privacy and data security.

Pharma

The Insights Association’s (IA) pharmaceutical insights advocacy concern for more than a decade has been the restriction or prohibition of incentives for medical professionals participating in pharmaceutical and medical device marketing research.

Maine finally delved into rule-writing this summer for the state’s 2017 ban¹ on gifts from pharmaceutical companies to physicians. That 2017 law turned Maine into a no-go state for pharma MR with doctors, like it was prior to our successful repeal of an old Sunshine-style law in 2011,² because pharmaceutical companies treat it as a de facto ban on respondent incentives for health care practitioners participating in marketing research sponsored by pharmaceutical companies. The Insights Association made our case for exempting marketing research incentives but while the Board of Pharmacy fleshed out a few aspects of the law, our concerns were left unaddressed.³

The city of Philadelphia got in the game recently as well.⁴ Absent a specific carveout or clarification, the city ordinance would likely have banned incentives for health care practitioners participating in marketing research studies sponsored by pharmaceutical companies, even though such studies are generally conducted by independent research companies and the sponsoring manufacturers are not typically aware of which practitioners participated. Howard Schlesinger (Schlesinger Associates), Roni DasGupta (M3 Global Research) and Ileen Branderbit (Focus Pointe Global) joined the Insights Association for meetings in Philadelphia seeking to either amend the ordinance to carve out respondent incentives or reject it. These efforts helped convince the City Council to vote down the ordinance on February 7.⁵

We also helped to keep legislation in New York⁶ at bay this year, modeled on the federal Physician Payments Sunshine Act, but without any marketing research carveout. We’ve faced it down multiple times before and this specific bill will carry over to the 2020 legislative session.

The census

It is a big year for the decennial census. While most people care about the 2020 census’ impact on the drawing of congressional districts⁷ or guiding federal funding,⁸ the census is our industry’s statistical benchmark and backstop. Anything less than a full, fair and accurate decennial headcount would jeopardize the accuracy of every representative survey in the U.S. for the next decade. 

A key impediment to an accurate census was the Trump administration’s proposal to add a question on citizenship, which concerned the marketing research and data analytics industry because it had not been sufficiently tested and its inclusion would likely decrease response rates among predominantly-Latino immigrant households (both legal and illegal) and native tribes. The Insights Association joined an amicus brief⁹ against the citizenship question in a case that went before the U.S. Supreme Court. The high court heeded IA’s and others’ concerns and struck down the citizenship question this summer,¹⁰ forcing the White House to withdraw its proposal.¹¹

Our other big battle has been for funding to conduct the count. IA helped secure a billion-dollar increase in fiscal year 2019 funding for decennial preparations, finally approved in February,¹² but we’ve been advocating for a much greater increase needed for fiscal year 2020, when the headcount must happen. IA even testified at a congressional committee hearing in May.¹³ We succeeded in getting the House of Representatives to provide $7.5 billion for the 2020 census in legislation they approved on June 25 and getting all sides to make it easier to get to a reasonable final funding number by setting aside several billion dollars in the most recent budget agreement for the census.¹⁴ IA and our Census Project coalition partners hope to get the funding finalized before the end of 2019 at sufficient levels.

Telephone

Research via telephone is under threat on two fronts at the national U.S. level: the Telephone Consumer Protection Act (TCPA), which prohibits the use of an autodialer to call a mobile device;¹⁵ and the blocking or mislabeling of calls by mobile apps and telecom providers. Despite IA’s dogged efforts, the Federal Communications Commission (FCC) hasn’t issued new rules reforming the TCPA since our 2018 circuit court win¹⁶ that rejected the agency’s 2015 regulations that deemed most anything except a rotary dial phone to be an autodialer. The House and Senate are nearing compromise on dueling bills (S. 151¹⁷ and H.R. 3375¹⁸) that would make TCPA enforcement even more punitive. The FCC has also resisted requiring the whitelisting of legitimate business callers, which would prevent their arbitrary blocking or being labeled as spam or telemarketing, but IA continues to work with a broad group of telecoms and dialers in the Communication Protection Coalition to come up with private sector compromises.¹⁹

At the state level, it has been more of a mixed bag. IA helped to defeat Oregon S.B. 472 this year,²⁰ which would have prohibited the purchase or sale of a list of telephone numbers to be used for unsolicited calls, including calls for research. Unfortunately, we failed to improve California S.B. 208 before it was signed into law;²¹ it tasks the state attorney general and Public Utilities Commission with pursuit of TCPA enforcement actions. IA also aims to either amend or defeat the New York Robocall Prevention Act,²² which would essentially implement a state version of the 2015 TCPA rules for calls to any New York phone, including residential lines.

Independent contractor status of research participants

Government agencies sometimes claim that respondents receiving incentives for participation in marketing research studies should be treated as employees of the organizations conducting the research. This can bring responsibility for unemployment insurance payments, other taxes and fees, minimum wage, overtime pay, extra recordkeeping and sometimes lawsuits and penalties for misclassification. While it might appear silly, defending against these challenges and the uncertainty they create can be quite costly.

And legislation is advancing that would make it harder to classify a respondent as an independent contractor.

At the federal level, the main concern is the PRO Act,²³ legislation supported by most of the House Democratic Caucus and Democrat presidential candidates that would broadly expand the power of labor unions but, more importantly for our industry’s purposes, make it harder to classify someone as an independent contractor. The bill would add an ABC test to National Labor Relations Act (NLRA), making it more likely that respondents may be classified as employees and thus subject to organizing into a union. The ABC test is usually stated in three paragraphs, all three of which must be satisfied in order for an individual to be treated as an independent contractor. A respondent will generally fail the part of the test about being a respondent as their trade/profession, since no insights organization would want a professional respondent or cheater-repeater skewing the results of their studies. Unfortunately, the House Education and Labor Committee²⁴ paid no heed, passing the bill on September 25 and it will likely pass the full House before the end of 2019.

Despite media coverage focused on the gig economy, new California law A.B. 5, signed by the governor in September, has a much broader scope and potentially imperils independent contractor status for respondents receiving marketing research incentives in the state.²⁵ It codified the 2018 Dynamex court decision,²⁶ requiring an ABC test for determining a Californian’s employment status. In the months to come, IA will likely have to pursue a clarification from the state labor authorities that respondents are independent contractors but in the meantime, the law does allow some avenues for defense in court for insights companies ensnared by A.B. 5.

By comparison, IA notched wins in Arkansas, Oklahoma and Tennessee,²⁷ helping to pass laws in each state to replace their problematic ABC tests for employment status with common law tests.

IA is also supporting federal legislation, the Modern Worker Empowerment Act,²⁸ which would harmonize federal labor laws around the “common law” test, reducing the current patchwork of different tests. While the bill won’t pass in this Congress, we’re building towards the future.

Data privacy and security

The convoluted California Consumer Privacy Act (CCPA), which comes into effect on January 1, 2020, dominated the data privacy and data security discussion this year, prompting copycats across the country and jumpstarting debate on a federal privacy law.

Thankfully, California approved a handful of changes to the law in September. IA’s advocacy campaign with the California Chamber of Commerce and a broad coalition of businesses and organizations headed off some bills that would have made the law much worse and help to pass some legislation improving the law a little and making compliance more achievable: A.B. 25, A.B. 874, A.B. 1355, and A.B. 1564.²⁹ Unfortunately, the billionaire backer of the original ballot initiative that spawned CCPA is back with another one for the fall 2020 ballot, proposing to further broaden CCPA and make it more punitive and harder for the legislature to change.³⁰

CCPA will require extensive disclosure about data collection, use and sharing, and consumer rights to data access, deletion and opt-out (from data sharing/sale). It will also further expand penalties for data security breaches, punishable by private lawsuits. Attorney General Xavier Becerra will have wide latitude to enforce the law, which becomes enforceable either July 1, 2020 or six months after the attorney general publishes the final regulations,³¹ whichever is earlier (although violations in the interregnum might be retroactively prosecutable once the AG starts enforcing the law).

The Insights Association has a CCPA portal to centralize compliance and related information at https://www.insightsassociation.org/ccpa-portal.

CCPA inspired other states this year:

• Nevada approved a new data privacy law. The state now requires companies to offer consumers the right to opt out of the sale of their personal data.³² It expanded upon a 2017 law that required data access and correction rights and notice about data collection and collection by third parties.³³
• New York is considering a data privacy bill with a much bigger scope and reach than CCPA and with which it might be nearly impossible for a marketing research and data analytics company to comply. It would include hugely damaging private lawsuits.³⁴
• Texas³⁵ and Connecticut³⁶ abandoned expansive data privacy bills (temporarily) in favor of task forces to further develop the legislation.
• Washington state debated comprehensive data privacy legislation³⁷ more closely following the EU General Data Protection Regulation (GDPR) but couldn’t complete it before the session ended.
• Massachusetts is considering a bill modeled on CCPA but adding class-action lawsuits for any violation (regardless of actual harm),³⁸ as well as a bill restricting the collection and use of data from children and tweens.³⁹
• And Hawaii, Illinois, Louisiana, Maryland, Minnesota, New Jersey, New Mexico, North Dakota, Pennsylvania and Rhode Island all considered a variety of CCPA-inspired data privacy bills this year.

Vermont also caused a 2019 ripple effect. Marketing research and data analytics companies that collect and sell/license data on a Vermont resident with whom they have no direct business relationship are subject to the state’s data broker registration, data security program and information submission requirements, plus fees, thanks to a law that came into effect on January 1, 2019.⁴⁰ Congress,⁴¹ as well as legislators in Washington⁴² and Illinois,⁴³ considered the same this year and will likely try again in 2020. More importantly, CCPA amendments signed into law this fall in California also included A.B. 1202, modeled on Vermont’ data broker registration and information submission requirements, which comes into effect on January 1, 2020, at the same time as CCPA. 

Multiple states passed amendments to their data security breach notification regulations in 2019 but New York’s SHIELD Act⁴⁴ was the most impactful. It broadly expanded notification requirements but also adds new requirements for companies to maintain a comprehensive data security program, partially modeled on those of Massachusetts, which come into effect in 2020.⁴⁵

This ever-growing patchwork of conflicting state data privacy and security laws forces us to seek a preemptive but comprehensive solution at the federal level. However, just any federal law won’t do the trick for the marketing research and data analytics industry. A recent ITIF study found that a federal privacy law modeled on GDPR or CCPA “could cost the U.S. economy approximately $122 billion, or $483 per U.S. adult, per year, which is more than 50 percent of what Americans spend on their electric bills each year.”⁴⁶

That is why the Insights Association is a founding member of the Privacy for America coalition,⁴⁷ which is working with Congress to support enactment of groundbreaking comprehensive federal consumer data privacy and security legislation.

Congress toyed with many different data privacy proposals this year but none are what we’re seeking.

The well-known model from GDPR, CCPA and other laws and regulations here and abroad is based on the long-standing model of consumer “notice and consent.” Technical compliance with these laws and regulations is often difficult and often literally impossible. The notice in this model often doesn’t genuinely inform consumers and the cursory consent (even with opt-in) doesn’t necessarily prevent or punish harm or protect consumers. The new model put forward by Privacy for America is instead designed to “prevent and punish consumer harm.” It allows for many data sources and dynamic use of data, with various controls to protect consumers and business innovation. The Privacy for America model emphasizes reasonable and beneficial uses of personally identifiable information and punishment for its exploitation.

The new Privacy for America model includes launching a Bureau of Data Protection within the Federal Trade Commission to regulate U.S. data privacy and authorizing strict penalties for people that engage in prohibited privacy practices, to substantially increase privacy oversight and enforcement. It also will have significant restrictions on data use for advertising and require strong data security protections to guard against data breaches.

IA is working with Privacy for America and a broad range of stakeholders to build consensus for enactment of this helpful framework into law, as soon as possible. 

References

1 Pharmaceutical Marketing Research in Maine Gets Cut Off. July 20, 2017. https://www.insightsassociation.org/article/pharmaceutical-marketing-research-maine-gets-cut 

2 Pharma MR wins in Maine and DC but loses in Vermont. August 28, 2011. https://www.insightsassociation.org/article/pharma-mr-wins-maine-and-dc-loses-vermont 

3 Maine Pharma MR Incentive Ban Still In Place Despite New Regulations. August 12, 2019. https://www.insightsassociation.org/article/maine-pharma-mr-incentive-ban-still-place-despite-new-regulations 

4 Pharma MR Incentive Ban Proposed in Philadelphia. November 26, 2018. https://www.insightsassociation.org/article/pharma-mr-incentive-ban-proposed-philadelphia 

5 Philadelphia Rejects Bill That Would Have Banned Pharmaceutical Marketing Research with Healthcare Professionals. February 8, 2019. https://www.insightsassociation.org/article/philadelphia-rejects-bill-would-have-banned-pharmaceutical-marketing-research-healthcare 

6 New York Legislation Could Impair Pharma MR with Doctors – A.B. 5378 February 25, 2019 https://www.insightsassociation.org/article/new-york-legislation-could-impair-pharma-mr-doctors-–-ab-5378 

7 States Expected to Gain or Lose Congressional Seats After the 2020 Census (Updated). February 21, 2019. https://www.insightsassociation.org/article/states-expected-gain-or-lose-congressional-seats-after-2020-census-updated 

8 Census Experts Commend Updated Study Showing Almost $9 Trillion Next Decade from Feds to States Depends on 2020 Census. The Census Project. March 8, 2019. https://thecensusproject.org/2019/03/08/census-experts-commend-updated-study-showing-almost-9-trillion-next-decade-from-feds-to-states-depends-on-2020-census/ 

9 Supreme Court Amicus Brief Argues Citizenship Question Would Harm Businesses Reliant on Census Data. April 2, 2019. https://www.insightsassociation.org/article/supreme-court-amicus-brief-argues-citizenship-question-would-harm-businesses-reliant-census 

10 SCOTUS Blocks Citizenship Question from 2020 Census - For Now. June 27, 2019. https://www.insightsassociation.org/article/scotus-blocks-citizenship-question-2020-census-now 

11 Trump Administration Drops Citizenship Question from 2020 Census Following Supreme Court Defeat. July 2, 2019. https://www.insightsassociation.org/article/trump-administration-drops-citizenship-question-2020-census-following-supreme-court-defeat 

12 Census Bureau Gets $1 Billion Increase in Final FY2019 Funding Law. February 15, 2019. https://www.insightsassociation.org/article/census-bureau-gets-1-billion-increase-final-fy2019-funding-law 

13 Determining the Fate of American Business for the Next Decade: Insights Association Testifies in Congress About 2020 Census. May 24, 2019. https://www.insightsassociation.org/article/determining-fate-american-business-next-decade-insights-association-testifies-congress 

14 FY20 Funding for Census Nears Crunch Time. July 30, 2019. https://www.insightsassociation.org/article/fy20-funding-census-nears-crunch-time 

15 New U.S. Restrictions on Telephone Research Prompt Risk Management Debate: Do the new TCPA rules mean you should junk your autodialer? August 3, 2015. https://www.insightsassociation.org/article/new-us-restrictions-telephone-research-prompt-risk-management-debate-do-new-tcpa-rules-mean 

16 Analysis: Circuit Court Rejects FCC’s TCPA Regulations on Autodialer Definition and Calls to Reassigned Cell Phone Numbers. March 21, 2018. https://www.insightsassociation.org/article/analysis-circuit-court-rejects-fccs-tcpa-regulations-autodialer-definition-and-calls 

17 TRACED Act Passes Senate. May 24, 2019. https://www.insightsassociation.org/article/traced-act-passes-senate 

18 Bipartisan H.R.3375 Would Tighten the TCPA Enforcement Screws But Might Help Telephone Research in Other Ways. June 21, 2019. https://www.insightsassociation.org/article/bipartisan-hr3375-would-tighten-tcpa-enforcement-screws-might-help-telephone-research-other 

19 Mitigating Problems with Call Blocking and Labeling: Developing Best Practices in the Private Sector. October 26, 2018. https://www.insightsassociation.org/article/mitigating-problems-call-blocking-and-labeling-developing-best-practices-private-sector 

20 Oregon S.B. 472 Fails - Would Have Prohibited Selling or Purchasing Telephone Research Sample. July 10, 2019. https://www.insightsassociation.org/article/oregon-sb-472-fails-would-have-prohibited-selling-or-purchasing-telephone-research-sample 

21 California Consumer Call Protection Act of 2019 Now Law. October 4, 2019. https://www.insightsassociation.org/article/california-consumer-call-protection-act-2019-now-law 

22 New York Robocall Prevention Act of 2019 Passes State Senate. September 13, 2019. https://www.insightsassociation.org/article/new-york-robocall-prevention-act-2019-passes-state-senate 

23 Protecting the Right to Organize Act - H.R. 2474 and S. 664 - Could Allow Unionization of Research Participants. September 10, 2019. https://www.insightsassociation.org/article/protecting-right-organize-act-hr-2474-and-s-664 

24 Opposing the PRO Act - H.R. 2474 - Unless Amended to Protect Research. September 24, 2019. https://www.insightsassociation.org/article/opposing-pro-act-hr-2474-unless-amended-protect-research 

25 California A.B. 5 Now Law – Research Participants More Likely to Be Deemed Employees Now. October 4, 2019. https://www.insightsassociation.org/article/california-ab-5-now-law-–-research-participants-more-likely-be-deemed-employees-now 

26 California Court Decision in Dynamex Case Threatens Independent Contractor Status. December 14, 2018. https://www.insightsassociation.org/article/california-court-decision-dynamex-case-threatens-independent-contractor-status 

27 Three States Improve Independent Contractor Status Protection with New Laws. October 4, 2019. https://www.insightsassociation.org/article/three-states-improve-independent-contractor-status-protection-new-laws 

28 Modern Worker Empowerment Act - H.R. 4069 - Would Reduce Federal Legal Challenges for Respondent Incentives. August 29, 2019. https://www.insightsassociation.org/article/modern-worker-empowerment-act-hr-4069-would-reduce-federal-legal-challenges-respondent 

29 CCPA Wins: Amendments Head to Governor for Signature. September 20, 2019. https://www.insightsassociation.org/article/ccpa-wins-amendments-head-governor-signature 

30 New Ballot Initiative to Trump CCPA - The California Privacy Enforcement Act. September 25, 2019. https://www.insightsassociation.org/article/new-ballot-initiative-trump-ccpa-california-privacy-enforcement-act 

31 Regulations Implementing CCPA Promised Soon. October 4, 2019. https://www.insightsassociation.org/article/regulations-implementing-ccpa-promised-soon 

32 Nevada Consumer Data Privacy Law in Effect This Fall. July 8, 2019. https://www.insightsassociation.org/article/nevada-consumer-data-privacy-law-effect-fall 

33 New Nevada Online Privacy Law Aimed Out-of-State. September 27, 2017. https://www.insightsassociation.org/article/new-nevada-online-privacy-law-aimed-out-state 

34 New York Privacy Act - S. 5642. June 14, 2019. https://www.insightsassociation.org/article/new-york-privacy-act-s-6542 

35 Texas Tightens Data Security Law and Considers Broader Consumer Data Privacy Changes. July 9, 2019. https://www.insightsassociation.org/article/texas-tightens-data-security-law-and-considers-broader-consumer-data-privacy-changes 

36 Connecticut Law Launches Task Force to Prepare Consumer Data Privacy Legislation - S.B. 1108. July 8, 2019. https://www.insightsassociation.org/article/connecticut-law-launches-task-force-prepare-consumer-data-privacy-legislation-sb-1108 

37 Washington Privacy Act of 2019 – S.B. 5376 and H.B. 1854. April 15, 2019. https://www.insightsassociation.org/article/washington-privacy-act-2019-–-sb-5376-and-hb-1854 

38 Massachusetts S. 120 - Comprehensive Data Privacy Legislation. October 2, 2019. https://www.insightsassociation.org/article/massachusetts-s-120-comprehensive-data-privacy-legislation 

39 Massachusetts H.B. 350 - Minors Privacy Legislation. October 4, 2019. https://www.insightsassociation.org/article/massachusetts-hb-350-minors-privacy-legislation 

40 Vermont Adds Data Security and Regulatory Burden for Sample Providers. August 10, 2018. https://www.insightsassociation.org/article/vermont-adds-data-security-and-regulatory-burden-sample-providers 

41 Sen. Peters Data Broker List Act of 2019 – S. 2342. August 19, 2019. https://www.insightsassociation.org/article/sen-peters-data-broker-list-act-2019-–-s-2342 

42 Washington State Proposes Data Broker Regulations – H.B. 1503. February 27, 2019. https://www.insightsassociation.org/article/washington-state-proposes-data-broker-regulations-–-hb-1503 

43 Illinois Data Broker Registration Act – H.B. 2871. March 15, 2019. https://www.insightsassociation.org/article/illinois-data-broker-registration-act-–-hb-2871 

44 New York Has New Data Security and Breach Notification Rules Starting in Fall 2019. September. 11, 2019. https://www.insightsassociation.org/article/new-york-has-new-data-security-and-breach-notification-rules-starting-fall-2019 

45 Massachusetts Data Security Obligations and Breach Notification Requirements. January 13, 2015. https://www.insightsassociation.org/legal-article/massachusetts-data-security-obligations-and-breach-notification-requirements 

46 The Potential Cost of a Bad U.S. Privacy Law. September 6, 2019. https://www.insightsassociation.org/article/potential-cost-bad-us-privacy-law 

47 Privacy for America Coalition Pursues Strong Data Privacy Protections for All Americans. April 9, 2019. https://www.insightsassociation.org/article/privacy-america-coalition-pursues-strong-data-privacy-protections-all-americans