Startup News Digest 04/24/26
The Big Story: House Republicans unveil federal privacy bill
Congress has taken a first step towards solving the growing privacy legislative patchwork, which creates inconsistent protections for consumers and significant compliance burdens for startups. After forming a privacy working group early last year, House Republican lawmakers that sit on a key committee this week unveiled a federal privacy bill modeled after several states’ privacy laws that would establish uniform rights for consumers and consistent obligations for companies no matter where they are in the country. Congress has debated a federal privacy framework for years, but as 20 states already have their own comprehensive privacy laws on the books—and more are working to pass their own or have passed narrower privacy laws—lawmakers should use this new bill to restart conversations and pass a federal law.
The bill, the Securing and Establishing Consumer Uniform Rights and Enforcement over Data, otherwise known as the SECURE Data Act, largely reflects the baseline privacy rights already found in many state laws, including consumer rights to access, delete, and correct personal data. It creates parameters around how processors can use user data and requirements around de-identified and pseudonymized data. It also includes provisions around automated decision-making, requiring disclosure and opt-out when decisions are made without human involvement, and creates voluntary codes of conduct to help small businesses—businesses that have data on fewer than 200,000 people and less than $25 million in annual revenue—navigate coming into compliance. The protections and obligations in the bill would be enforced by the Federal Trade Commission (FTC) and state attorneys general working with the FTC, and the bill establishes a 45-day cure period to allow companies to address issues before facing penalties. The bill would also repeal a video privacy law from the 1980s that has recently given rise to a wave of lawsuits against websites that use commonplace ad tracking software.
For startups, one uniform, consistently enforced federal framework like the SECURE Data Act would replace an unworkable system where each new state law can add tens of thousands of dollars in compliance costs and pull much needed resources away from launching a product and building a company. Currently, the bill only has support from Republicans in the House, but policymakers on both sides of the aisle should use this opportunity to work towards bipartisan consensus, including on many of the elements of the SECURE Act that are already found in privacy laws in red and blue states.
Policy Roundup:
House GOP reveals new Section 702 extension text. House Republican leaders on Thursday released a proposed three-year extension of Section 702 of the Foreign Intelligence Surveillance Act, as Speaker Mike Johnson races to overcome holdouts before the authority expires on April 30. The new text adds audits of the FBI’s ability to query 702-collected data on Americans and creates penalties for knowingly violating search guidelines, but it does not include the warrant requirement that GOP hard-liners and privacy advocates have demanded. The House Rules Committee is expected to take up the measure Monday, with leadership planning to send it to the Senate as a message to speed floor action. Without reforms narrowing the Electronic Communication Service Provider definition, a straight extension would continue to subject startups to surveillance directives they lack the resources to deal with.
Senate committee tees up vote on chatbot ban for minors. The Senate Judiciary Committee is slated to vote in the coming weeks on a bill that would ban minors from using chatbots, effectively requiring any company with an AI-enabled interactive service to verify that all of its users are adults. While policymakers are right to focus on children's online safety, the bill's age verification mandate—coupled with expansive definitions that scope in companies beyond the bill’s stated target of chatbots that mimic emotional intimacy and manipulate or exploit users—raises significant concerns about costs for startups and the free expression rights and privacy of users.
U.S. and Mexico agree to May negotiating round ahead of USMCA review. U.S. Trade Representative Jamieson Greer met with Mexican President Claudia Sheinbaum and Secretary of Economy Marcelo Ebrard in Mexico City on Monday to discuss U.S.-Mexico trade relations ahead of the U.S.-Mexico-Canada Agreement (USMCA) Joint Review on July 1. Greer and Ebrard directed their teams to advance technical discussions on economic security, rules of origin, and critical minerals, and agreed to hold the first official bilateral negotiating round the week of May 25 in Mexico City. The review's outcome will carry significant weight for startups that depend on predictable tariff treatment and digital trade across the USMCA region.
House lawmakers advance broadband funding deployment. On Tuesday, the House passed legislation aimed at improving oversight and the speeding up deployment of broadband funding. The measures would enhance safeguards to ensure support reaches rural areas and streamline federal coordination and tracking for broadband expansion. Policymakers must continue prioritizing broadband access to sustain an inclusive innovation ecosystem with reliable connectivity for startups and their users.
House committee examines role of gig economy for small businesses. On Tuesday, the House Small Business Committee held a hearing on the intersection of small businesses, platform apps, and gig economy workers. The discussion focused on how Main Street businesses use platforms for logistics, customer acquisition, and increased capacity, while witnesses also emphasized that gig work can serve as a financial bridge for startup founders and that app-based platforms can help small companies source talent for project-based or seasonal needs. Policymakers should preserve these entrepreneurial pathways by creating clearer regulatory frameworks—such as the Department of Labor’s recently proposed independent contractor rule—to provide greater certainty for startups and workers.
Policymakers push transparency in IP litigation funding. The Senate Judiciary committee held a hearing on Wednesday to highlight the persistent threat China poses to U.S. intellectual property, including through litigation. Sen. Chuck Grassley (R-Iowa), the current Chairman of the Senate Judiciary Committee, emphasized the need to advance the Litigation Funding Transparency Act, a bill requiring disclosure of third-party litigation funders at the outset of lawsuits to expose hidden foreign interests behind cases. This transparency would help curb abusive litigation practices, including those driven by patent trolls targeting startup founders.
USTR touches on digital trade in 2026 agenda hearing. At a House Ways and Means hearing on the administration's 2026 trade agenda, U.S. Trade Representative Jamieson Greer confirmed Section 301 investigations targeting digital services taxes are in draft against EU member states, Australia, Korea, and Canada, with negotiated outcomes preferred. Greer committed to advancing the World Trade Organization (WTO) e-commerce moratorium as a plurilateral agreement among the 164 supporting countries if needed, warning Brazil and Turkey "will pay a price" for blocking consensus in March. Democratic members pressed Greer on the administration's pivot to Section 122 tariffs after the Supreme Court struck down its IEEPA tariffs, and on how small businesses that paid the invalidated duties will be refunded.
On the Horizon:
TUE 04/28: The House Financial Services Committee will convene a hearing to examine how proposed changes to capital formation could impact businesses across the economy, including startups at 10:00 AM ET.
WED 04/29: The Senate Small Business and Entrepreneurship Committee will convene a hearing to examine how small businesses have contributed to the U.S. economy and how policy can support their continued development at 2:45 PM ET.
THU 04/30: The Federal Communications Commission will convene an open commission meeting at 10:30 AM ET.
Startup Roundup:
#StartupsEverywhere: Boston, Massachusetts. After a career in corporate sustainability, Alison Rogers Cove founded USEFULL, based in Boston, Massachusetts, to tackle the plastic crisis at the source. USEFULL is a circular solution focused on college campuses that helps them eliminate single-use food packaging by replacing it with a returnable, plastic-free system. We sat down with Alison to discuss the challenges of fundraising as a founder, the impact of tariffs on sustainable businesses, higher education as a market, and the realities of navigating parenthood while running a startup.