Senate preps online privacy legislation as advertisers promise self regulation
A Senate Commerce, Science and Transportation Committee hearing on online privacy Tuesday will focus on technologies used to collect and use consumer information and could help lay the groundwork for legislation governing those practices.
The hearing, set for 2:30 p.m., comes amid growing calls for the Senate to act in the wake of several high-profile privacy mishaps, analysts say. Google will address its Wi-Fi networks breach, saying the incidents are now in the hands of its legal team. Hoping to stave off tough new rules, Web sites are rushing to provide assurances to regulators and lawmakers they will behave fairly and in a transparent manner.
According to a memo prepared by Republican committee staff, the hearing is expected to focus on technologies that enable Web sites, such as Facebook and Google, and device and software makers, such as Apple, to sell ads based on information collected from their customers' profiles.
The chances of Congress passing an online privacy bill this year are slim, analysts say. Still, advertisers and Web site publishers are working together to show they can regulate their own practices by being more upfront about how they collect and consumers' information.
“The industry’s movement toward greater transparency is necessary because we believe a political consensus has formed in Washington that consumers need greater awareness of behavioral targeting and the ability to easily opt-out of such tracking,” said Paul Gallant, an analyst at Concept Capital.
Senators John Kerry (D-Mass.) and Mark Pryor (D-Ark.) have been contemplating legislation, according to the staff memo. On the other side of Capitol Hill, momentum for online privacy legislation continues to build. Last week, Rep. Bobby Rush (D-Ill.) introduced an online privacy bill complementing legislation previously introduced by Rep. Rick Boucher (D-Va.). Under Boucher’s bill online advertisers wouldn't be allowed to track sensitive information – such as their health and financial records – without the express permission of users. Rush’s bill would also allow the Federal Trade Commission to create its own online privacy rules and require Web sites to explain clearly how they handle users' personal information.
A memo prepared by Republican staff outlined some of the major issues up for consideration by the Senate committee – including behavioral advertising, location-based services, and deep-packet inspection of data on broadband networks. The memo also highlighted the technologies used to gather and use consumer data.
As such, the panel has invited technologists from Apple, Google, and Facebook to talk about their practices. Complaints that those companies had mishandled user information in the past (Google’s Wi-Fi snooping, Facebook’s partnerships with Microsoft and Yelp that shared members’ information when volunteered) were also outlined in the memo.
AT&T, which will also be represented at the hearing, wasn’t a focus of the memo. But earlier this year, a security breach exposed the e-mail addresses for thousands of users of Apple's iPad, for which AT&T is the sole U.S. carrier. AT&T, the only Internet service provider represented, could have access to a trove of information by its subscribers through technology that allows ISPs to inspect data packets that flow through their networks.
Jeffrey Chester, executive director of the Center for Digital Democracy, has circulated a list of ideas for lawmakers to consider regarding consumer privacy on the Internet. He said Web sites should allow users to see what information is being collected about them and be able to change erroneous information. He also suggested a Do Not Track Registry, modeled after the Do Not Call Registry, for consumers who don't want to have information collected on them about their Internet activity and profiles.
"Consumers have the right to access their credit reports and medical records, but they are neither aware of -- nor do they have access to -- the detailed profiles that marketers have compiled from both online and offline sources," Chester said.
July 27, 2010; 8:00 AM ET
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