Scrambling for privacy
Driven by polls, re-election needs and the fear of pre-emptive state action, Congress is moving aggressively to draft and pass online privacy legislation.
Congress responds to concerns, but conflict could delay action
By Patrick Ross WASHINGTON--Congress is growing more responsive to calls for online privacy legislation, but a major conflict looms that could hurt efforts this year to enact consumer safeguards against prying Web sites. Last fall saw Republicans and Democrats in the House and Senate vow that 2001 would be the year an online privacy law was passed. Politicians have begun working on multiple bills, and predictably, Internet companies are voicing caution while privacy advocates are urging speed.
"My gut reaction is that (opt in vs. opt out) could be something that stops the bill," said Vince Sampson, vice president of the Association for Competitive Technology (ACT), an education and advocacy group. "I can't see a bill that's half opt in and half opt out." By all accounts, the stakes in this debate are huge. Web surfers resent having to divulge personal information when visiting sites and wonder what is done with the information. Spam, or unsolicited e-mail, is a growing problem, and it often finds a particular consumer's in-box is because that person surfed a particular site or entered an e-mail address there. Yet at a time when many dot-coms are being liquidated on Bid4Assets.com, any revenue a Web site can generate from consumer information is going to be closely guarded. "We must ensure that any initiatives have the least regulatory effect on the growth of e-commerce and on commercial free speech rights protected by the Constitution," said Sen. Orrin Hatch, R-Utah, chairman of the Senate Judiciary Committee. At the same time, legislators must ensure that "consumers are confident that personally identifiable information, which they submit electronically, are afforded adequate levels of privacy protection." Hatch vowed that a well-balanced privacy bill will be formed in his committee. All major congressional heavyweights in telecommunications have vowed to either author or aggressively support privacy legislation this year, including Senate Commerce Committee Chairman John McCain, R-Ariz., and his top Democratic colleague, Ernest Hollings of South Carolina, as well as Communications subcommittee Chairman Conrad Burns, R-Mont. But the balance Hatch seeks isn't always found among individual legislators. McCain and Burns, for example, favor the opt-out approach, in which a Web surfer must click a clearly identifiable button telling the Web owner not to use personal information. Hollings, in contrast, backs opt in, in which a site can only use a surfer's information if that person expressly gives the site owner permission, a method that leads to greater privacy but less commercially useful data for Web sites. "I do see a schism" between the two camps, ACT's Sampson said. "I just don't see a major privacy bill passing...Congress will likely punt." Despite such consumer concerns, some legislators are worried that opt-in privacy regulations will chill online business. Rep. James Moran of Virginia, head of the House New Democrats, said that an opt-in approach would "arrest private-sector development." "There are a lot of advantages for having the kinds of synergy of information that you don't have if you take (the opt-in) approach," he said. Republican Sen. George Allen, who made a name for himself as governor of Virginia partly by helping develop the technology corridor near Dulles Airport that features AOL Time Warner, said Internet businesses' input must be considered in any legislation. "Do we want to have the private sector come up with a solution or have the government impose a regulatory regime?" he asked, suggesting he favored the former. Web sites hold their breath "We're not allergic to legislation," said Rhett Dawson, president of the Information Technology Industry Council (ITI), which has favored self-regulation. Rather, he said, the industry is concerned that Congress is shifting from protecting specific types of information such as medical and financial records to a more comprehensive approach. "Congress should be deliberative," he said. "Regulatory missteps could cause damage to the market." Dawson and others conceded that concerns about privacy may be suppressing e-commerce, as Hatch and others have argued. But the issue is more complicated, said Christopher Caine, IBM's vice president for government relations.
Dawson was also skeptical. "I don't think government can keep pace with technology," he said. Such doubts have set off a debate over the degree of privacy businesses should be forced to offer, sending cracks through the thin veneer of bipartisan support for online privacy rules. Taking a hard line are consumer advocates, who have created a new group to press for strong safeguards against data-collection practices that have not been consented to. The Privacy Coalition--which includes the American Civil Liberties Union, Consumers Union, Electronic Privacy Information Center and others--asked state and federal legislators Feb. 12 to sign a pledge committing to support privacy legislation "in the Information Age." The coalition advocates legislation that promotes privacy-related technologies and mandates notice and consent by Web sites. To Moran of the House New Democrats, that seems to require Web surfers to opt in, which would "freeze in time existing technology" on the Internet and stifle innovation. Opt-in legislation would "radically and dramatically change the Internet experience," said Robert Holleyman, chief executive of the Business Software Alliance. He said the Internet "by and large is a free experience" because of the marketing power of information, and restricting it with opt-in legislation would "run the risk of jeopardizing the current underpinnings of the Internet." Holleyman and ITI's Dawson say they feel regulation isn't necessary, but they will examine any legislation to see if it is comprehensive, gives the government more power, or places heavy burdens on the Web operator. "We want to empower individuals to buy products they want when they want at a reasonable price," Dawson said. States apply pressure
"We need to understand that states may act" with their own legislation,
"You can't have 50 different standards for Internet privacy," said Rep. Jerry Weller, R-Ill. Already this year, 19 bills have been introduced in Congress on privacy, although the members who will be most active in pushing such legislation have yet to produce bills. There's disagreement on what those bills should look like, but privacy still draws broad interest.
"It's not a Democratic or Republican issue," said Rep. Ed Markey, D-Mass.,
the highest-ranking member of the House Commerce Telecommunications
subcommittee. "It's not a liberal or conservative issue."
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