Senate Committee Holds Hearings on Internet Privacy

A US Senate committee is currently debating the ability of individual companies to self-regulate Internet privacy. The question is whether more legislation will better control what companies collect and disseminate of an online user's private information. The online business community tends to think that self-regulation works under existing laws that cover non-online forms of private information. But successful and failed businesses have misused private information, causing Internet users to distrust online business.

Because US citizens have been very vocal in expressing concern about abuse of their private and sometimes stealthy-collected information, the US Senate Committee on Commerce, Science, and Transportation began its hearings to examine existing laws that protect privacy in the United States and overseas. The committee hopes to set an appropriate context for additional Internet privacy legislation.

The first hearing, on July 11, included two panels from the computer industry who discussed their business practices and views about Internet privacy. In addition, the panels expressed their views on what legislation might be appropriate to protect Internet users' privacy and what impact any subsequent legislation might have on markets in general. The first panel consisted of Marc Rotenberg, executive director, Electronic Privacy Information Center (ERIC); Fred Cate, Indiana University School of Law; and Paul Schwartz, Ph.D., professor of law, Brooklyn Law School. The second panel was comprised Paul Misener, vice president of global public policy for; Hans Peter Brondmo, author; Les Seagraves, vice president and chief privacy officer of Earthlink; Ira Rubinstein, associate general counsel for Microsoft Corporation; and Erik R. Olbetter, Internet/e-commerce analyst for Schwab Capital Market.

The Information Technology Industry Council (ITIC)—a group that represents the leading providers of information technology products and services (e.g., and Microsoft)—issued a statement urging the Senate committee to go slow in regulating online privacy. ITIC President Rhett Dawson said, "The Information Technology Industry Council supports a comprehensive approach to ensuring individual privacy in the digital age, with appropriate roles for government, the private sector, new technologies, and individuals. We urge Congress to use caution as it debates whether and how to extend federal law to facilitate this approach. Consumers should feel safe and secure when they go online. In today's digital economy, respect for individual privacy is an indispensable foundation for successful customer relationships. Consumers expect the benefits of customization, lower prices, and superior service without sacrificing their personal privacy, and companies must make respect for privacy an integral part of their business processes."

During the hearing, Marc Rotenberg, executive director of EPIC, brought up the June 28 Gallup poll that queried 391 adults about their concerns towards Internet privacy. According to the results, 66 percent of email users think that the government should pass more laws to ensure online privacy. The poll details reveal that the level of support varies among subgroups. Seventy-five percent of Internet users who spend 15 hours or more online each week are more likely to favor the passage of new laws. In addition, Gallup said that according to cross-reference of the same people in other Gallup polls, Democrats are more likely than Republicans to favor more privacy laws, and that more than 7 of every 10 email users below the age of 50 favor more government activity, compared with just 56 percent of those age 50 and older.

ITIC President Dawson said, "Consumers have every right to be concerned about sensitive information dealing with their financial, health, or children's data and, fortunately, Congress has already addressed these most sensitive areas of privacy," but those surveyed by Gallup clearly do not agree. Marc Rotenberg said of the Gallup poll results, "The message here is clear: Experienced Internet users understand the limitations of technical solutions and industry self-regulation. They want legal control over their personal information."

Paul Misener, vice president of global public policy for, said that people should consider the Internet to be no different than other situations in everyday life. Echoing Dawson's opinion, Misener said, "It makes little sense to treat information collected online differently from the same information collected through other media, such as offline credit card transactions, mail-in warranty registration cards, point-of-sale purchase tracking, and magazine subscriptions."

Nonetheless, Senate committee chairman Fritz Hollins (Democrat, South Carolina) had a very contrasting opinion. In his opening comments, Hollins said, "Last year, after 5 years of diligent study, the Federal Trade Commission (FTC) recommended that Congress pass Internet privacy legislation that reflects the time-honored fair-information practices of notice, consent, access, and security. This recommendation was particularly credible in light of the FTC's record of extensive analysis on this issue and its two prior recommendations to allow self-regulation a chance to work. Where did self-regulation get us? Nowhere. As BusinessWeek stated last year, self-regulation is a sham."

Other industry witnesses will have the opportunity to express their concerns as the hearings continue. However, no information was available regarding when the next hearing in this series will be held.

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