(Adds meeting ending, background, comment from senator)
By Diane Bartz and David Shepardson
WASHINGTON, April 30 (Reuters) - U.S. lawmakers drafting a bill to create rules governing online privacy hope to have a discussion draft complete by late May with a Senate committee vote during the summer and are intensifying efforts, but disputes are likely to push that timetable back, according to sources knowledgeable about the matter.
The issue is of huge concern to advertisers and tech companies such as Facebook and Alphabet's Google, which provide free online services to consumers but derive revenues from advertising targeted at consumers based on preferences identified via data collection.
Democratic Senators Richard Blumenthal, Brian Schatz and Maria Cantwell, who are leading the effort to draft the measure along with Republican Senators Jerry Moran, Commerce Committee chairman Roger Wicker and the Senate's No. 2 Republican, John Thune, met late Tuesday and could meet again as early as next week.
The six senators involved in the privacy working group met for 45 minutes in Thune’s Capitol Hill office Tuesday evening to discuss the status of the effort and look at issues where senators do not agree and will need to negotiate to resolve. "It's all baby steps," he said. "Hopefully we can find a path forward."
Thune told reporters after the meeting senators want to review some legislative language that staffers have drafted.
"We're in the early stages," Thune said. For a big legislative undertaking he said he thought the group was in a "pretty good place" but acknowledged it is "not an easy lift" to win agreement.
Cantwell told reporters on the way into the meeting that she wants to see a bill that provides "meaningful protection for the privacy of individual consumers."
"This is the start of a conversation, but you have to have a strong law," she added.
"We're making good progress and I'm very hopeful," Blumenthal said afterward.
The U.S. Senate Committee on Commerce, Science and Transportation will hold a hearing on the matter on Wednesday.
Republicans hope to complete a draft of the bill by the end of May so it can be introduced, debated and voted out of committee before Congress leaves for its August recess, according to the sources knowledgeable about the matter.
But that may be delayed if they fail to reach agreement with Democrats who are determined to ensure that the bill does not weaken, and then pre-empt, a California online privacy bill that goes into effect next year.
One dispute that has arisen is whether consumers whose privacy is violated by a company should be allowed to sue that company, with Democrats pushing for this to be allowed, according to one of the sources familiar with the discussions.
The Electronic Frontier Foundation advocacy group has this as one of its highest priorities in data privacy legislation.
At least one key Republican disagrees.
"Senator Moran has heard serious concerns from the business community, particularly the small business community, that any private right of action would have serious ramifications in their sustainability. The senator is taking these considerations into account as he negotiates federal privacy legislation," said a representative for the senator in an email statement.
Democratic support for the privacy legislation is key since the measure will also have to pass the U.S. House of Representatives, which Democrats control, to become law. Republicans have a majority in the Senate.
California's law, which will affect any major company with an online presence, 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. Each violation carries a $7,500 fine.
A privacy bill is one of the few pieces of potential legislation that lobbyists believe has a decent chance of becoming law because it is a bipartisan concern and does not cost taxpayers money, according to a source following the matter. (Reporting by Diane Bartz, David Shepardson and Alex Alper in Washington; editing by Jonathan Oatis, G Crosse and James Dalgleish)