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Washington's growing interest in privacy

Jia Lynn Yang

As lawmakers become more interested in regulating online privacy, ad network owners such as AOL and Google could take some preventive steps by giving consumers more control over their personal information, according to a new report from Concept Capital, a research firm.

The report also confirms the conventional wisdom that privacy legislation is more likely to happen in 2011, not 2010. There's simply too much going on between energy, financial regulatory reform, and Elena Kagan's Supreme Court hearings. But let's recap what's going on with privacy legislation anyway.

At this point, there are two relevant pieces of legislation in the works. One is from Rep. Rick Boucher (D-Va.), chairman of the House Telecom Committee. His proposal would require companies to disclose what they're doing with information collected from consumers. It would also bolster the rights of users to opt-out.

Concept Capital's report says Boucher is expected to introduce his bill soon and adds that even though it faces an "uphill climb" this year, its passage in 2011 is "quite realistic," given that some Republicans are likely to support the measure.

Then there's the financial regulation bill, of all things. The House bill includes a provision that would give the Federal Trade Commission new powers to regulate online advertising, but the Senate does not. (See Cecilia's piece on this in April.) Concept Capital thinks the Senate's version is more likely to pass.

Even if companies added more opt-out features for consumers worried about privacy, it's hard to tell how many people would take advantage of those options, the report also notes. At a Google presentation on privacy a couple months ago, I remember executives saying that people had a surprising appetite for changing their ad settings -- not to shut off the ads -- but to customize which kinds of companies targeted them.

So even if companies do more -- or if legislation requires them to do more -- everyone's still figuring out the new cultural tolerance for targeted advertising. Gmail has done fine, in spite of ads that appears on people's screens based on the words in their e-mails. And some of the privacy concerns lately aren't limited to advertising worries. They also include incidents such as the recent iPad breach in which users' e-mail addresses were revealed. Or questions about whether Google has been collecting personal information through Street View. Or concerns that Facebook's privacy settings aren't user-friendly enough so that people know how much they're sharing with their bosses versus their families.

By Jia Lynn Yang  |  June 15, 2010; 7:28 PM ET
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