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Tech trade group turns about-face on privacy

In a reversal of its earlier position, the American Electronics Association releases principles for the U.S. Congress to follow in establishing new privacy regulation.

In a reversal of its earlier position, the American Electronics Association on Thursday released principles for the U.S. Congress to follow in establishing new privacy regulation.

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AEA proposes new privacy guidelines
John Palafoutas, senior VP for domestic policy, American Electronics Association
For the first time, the trade group is supporting federal privacy rules. The aim is to head off efforts by state governments to set their own rules, a development that would confuse consumers and businesses alike, according to John Palafoutas, the AEA's senior vice president for domestic policy.

"This is a complete departure from our original position. State lobbyists had proposed 300 state privacy bills," said Palafoutas. "If people thought the Internet is confusing now, with 300 different regulations out there, it would have become a mess."

However, some privacy experts are criticizing the AEA, saying the organization is supporting privacy regulations that are virtually meaningless.

"Their aim is obviously to get a weak law preempting stronger state law," Jason Catlett, president of, said in an e-mail to reporters.

Regardless, the move is sure to affect the debate over Internet privacy. Founded in 1943, and with more than 3,500 member companies, the AEA is the country's oldest and largest technology trade association.

Privacy concerns have increased over the past year, causing companies including Microsoft, IBM and American Express to establish a new position in their executive boards: chief privacy officer.

Some of the principles proposed by the AEA for federal legislation call for Web sites to provide notice of their information practices to individuals at the time of information requests; for consumers to be able to opt out of the use of their personal information; and for the establishment of national standards and policies that would avoid a patchwork of state and local mandates.

Many in the technology industry believe self-regulation is the best way to fully protect consumer privacy online. But a growing number of privacy advocates and government officials--and now the AEA--back federal legislation that will give consumers control of their personal information online.

The AEA's chief executive, William T. Archey, said in a statement that "only the federal government is in a position to create uniform U.S. privacy standards and work for international harmonization. Otherwise, online businesses could face 50 conflicting sets of privacy rules."

In related news, a coalition of groups including the Electronic Privacy Information Center, the American Library Association and the Consumer Federation of America sent a letter urging the incoming presidential administration, members of Congress and state officials to take greater action in protecting privacy.