National Restaurant Association and Restaurant Law Center Urge FTC to Consider Proposed Data Security Rule’s Impact on Industry

Washington, D.C. – The National Restaurant Association and the Restaurant Law Center today submitted feedback to the Federal Trade Commission (FTC) regarding the agency’s Advanced Notice of Proposed Rulemaking on Commercial Surveillance and Data Security. In the comments, the industry advocacy groups express concern with the proposed rules and their potential to negatively impact the industry and consumers.

The comments make three significant requests of the FTC limiting the scope of any proposed regulations by either exempting or providing safe harbor for the restaurant industry:

• Restaurants do not engage in the types of practices that these regulations are intended to target (i.e., data collection to create a separate revenue stream). Restaurants are significantly smaller and far more under-resourced than the businesses that engage in such practices and would be disproportionately burdened by overlay prescriptive regulations.
• Certain data collection practices, particularly restaurant loyalty and/or rewards programs, are designed to benefit the consumer. Allow the restaurant industry to continue to be free to voluntarily establish such mutually beneficial business-customer relationships.
• Defer rulemaking on this subject until Congress has taken action to provide clarity and guidance to ensure a comprehensive federal framework of a uniform data privacy standard.

“The restaurant industry supports efforts to ensure the protection of consumer data and, in general, doesn’t engage in the practices the FTC is targeting with this proposed rule,” said Angelo Amador, Executive Director of the Restaurant Law Center. “Data collection with the customer’s consent through a restaurant’s loyalty program is a critical element of the restaurant business model. In an industry with increasingly tight profit margins and robust competition, restaurants utilize customer data to understand customer preferences so they can remain competitive and improve customer experience.”

“The FTC should refrain from rulemaking at this time and let Congress take action to provide statutorily sound clarity and guidance, particularly as it considers and votes on the American Data Privacy and Protection Act,” said Brennan Duckett, Director of Technology & Innovation Policy at the National Restaurant Association. “When Congress implements such a comprehensive framework, the FTC could then consider proposing regulations that center on the areas that Congress has expressly delegated to the FTC.”

The complete filing by the National Restaurant Association and the Restaurant Law Center can be found here.