Today, the default on Facebook and other social networking sites is that your information is public unless you opt to make it private. After considerable complaints about privacy protections, State Senate Majority Leader Ellen Corbett (D-San Leandro) came up with a simple but ingenious idea. Why not make the default for everything but your name and city private, and give people the option of deciding what other information they want to make public?

According to her proposal, SB242, users would have to set their privacy settings while registering for the site. Her bill also said that websites would be fined $10,000 each time they failed to comply with a user’s request to remove information within 96 hours, though she later expressed her willingness to reduce the fine to $1,000. Nevertheless, the bill failed to pass the Senate, with 14 Republicans and two Democrats voting against it.

The final vote tally was 16-16, with many members of the Senate either abstaining or simply failing to vote. Local Senator Joe Simitian (D-Palo Alto) was unavailable because of an excused absence, though he has previously indicated that he supports the bill.

Opponents of the bill included the Internet Alliance, an advocacy group representing the internet industry, and the California Chamber of Commerce. The group claimed that the bill failed to reflect the way that websites currently operate and that such restrictions would limit their ability to “innovate.”

Blogger Joe Mathews of NBC News points out that by “innovate,” the companies—whether it is Google, Facebook, Twitter, LinkedIn, dating sites, or others—mean, “figuring out ways to use your personal data to make money.” Revenues from these companies come from collecting and sharing personal information, which can then be sold to internet advertisers who use it to target their ad campaigns. This brought in as much as $9 billion last year, and that number is expected to grow to $16 billion in 2014.

Of course, the major internet companies did not express it that way. Facebook’s Elliot Schrage, VP of corporate communications and public policy, wrote to Corbett saying that his company’s measures to protect privacy are sufficient: “Facebook has led the industry with innovative privacy and security tools that reflect the best practices identified by industry and regulators alike.”

The Hill points out that, “There is currently no national law governing how companies must treat data collected from consumers online.” This is the basis of a significant challenge to the SB242’s overall constitutionality, claiming that it regulates companies (inconsistently) that operate outside of California and imposes “a burden on interstate commerce.”

Corbett, however, has not been deterred by the outcome of the vote. She said, “I guess they’re just trying to kill a bill that’s going to protect people’s privacy, and promised to raise the bill again as soon as she can, possibly as early as this week.

Read More at Tech Eye.
Read More at NBC Bay Area.
Read More at the Sacramento Bee.
Read More at The Mercury News.
Read More at the San Francisco Chronicle.