On Tuesday the House of Representatives voted to repeal an Obama-era law that demanded ISPs have permission to share personal information - including location data.
Supporters of the move said it would increase competition, but critics said it would have a “chilling effect” on online privacy.
President Donald Trump is expected to sign the order soon.
The repeal was strongly backed by major providers such as Verizon, AT&T and Comcast, who argued that ISPs were being subject to stricter privacy laws than companies like Google or Facebook.
The law, passed last October days before President Trump was elected, and due to take effect by the end of this year, would have forced ISPs to get clear permission from users to share personal data such as "precise geo-location, financial information, health information, children’s information, social security numbers, web browsing history, app usage history and the content of communications”.
Furthermore, ISPs would have been ordered to allow their customers the ability to opt out of the sharing of less sensitive information, like an email address.
'Winners and losers'
Ajit Pai, the new head the Federal Communications Commission (FCC), said the repeal would help level the online playing field.
“Last year, the Federal Communications Commission pushed through, on a party-line vote, privacy regulations designed to benefit one group of favoured companies over another group of disfavoured companies,” he said in a statement.
"Appropriately, Congress has passed a resolution to reject this approach of picking winners and losers before it takes effect.
"Moving forward, I want the American people to know that the FCC will work with the [Federal Trade Commission] to ensure that consumers’ online privacy is protected though a consistent and comprehensive framework.”
But advocates of internet rights have been left furious.
“Today Congress proved once again that they care more about the wishes of the corporations that fund their campaigns than they do about the safety and security of their constituents,” said Evan Greer, campaign director from rights group Fight for the Future.
"People from across the political spectrum are outraged,” she added, "and every lawmaker who votes to take away our privacy will regret it come election day.”
The group has launched a billboard campaign to publicise which members of Congress back the repeal.
Other groups have expressed anger at the apparent silence of the major technology companies in the run up to the House vote.
"There are a lot of companies that are very concerned about drawing attention to themselves and being regulated on privacy issues, and are sitting this out in a way that they haven't sat out previous privacy issues,” said Craig Aaron from Free Press, a group which advocates for a more “open” internet.