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U.S. lawmakers drafting privacy bill argue about pre-empting California

David Shepardson

WASHINGTON, May 1 (Reuters) - U.S. lawmakers drafting online privacy legislation zeroed in on a major point of contention on Wednesday of whether their federal law should pre-empt stringent regulations recently passed by California that could hurt corporate profits.

Lawmakers in a Senate Commerce Committee hearing also discussed whether it was adequate to simply ask consumers to consent to data collection and how the new law would be enforced.

Democrats and Republicans generally agree new rules are needed on what data social media companies can collect on consumers and what they should be allowed to do with that data, not only for the biggest players like Facebook Inc and Alphabet's Google, but also smaller online firms.

The privacy bill is one of the few pieces of legislation that lobbyists believe has a decent chance of becoming law because it is a bipartisan concern and does not cost taxpayers money.

Republican John Thune, one of six senators in the group writing the bill, said, "I believe it's one of the issues that Congress should be able to work on on a bipartisan basis."

Legislators do not agree on several major issues, however, including whether a federal law should preempt the California measure due to go into effect in less than a year.

Senator Roger Wicker, who chairs the Commerce Committee, said federal legislation should be sufficient. Fellow Republican Marsha Blackburn agreed.

Democratic Senator Richard Blumenthal said he would oppose any bill that preempted state laws with a weaker federal bill, however.

California's law, which goes into effect on Jan. 1, requires companies with data on more than 50,000 people to allow consumers to view the data they have collected on them, request deletion of data, and opt out of having the data sold to third parties. Violations of the law carry a $7,500 fine.

Maria Cantwell, Democratic Senator from Washington, said she wanted any federal bill to allow consumers to sue companies if their privacy is violated.

No deadline has been set for a final draft of the bill, Wicker told reporters after the hearing. But he added: "I think something can be done this year." (Reporting by Diane Bartz and David Shepardson Editing by Sonya Hepinstall)