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White House Pushes For Internet Privacy Legislation

March 17, 2011

The Obama administration urged Congress on Wednesday to approve new legislation to protect the personal data of Internet users.  The move represents a tightened stance from last year’s call for voluntary codes of conduct for advertisers and data companies.

During a hearing on online privacy held by the Senate Committee on Commerce, Science and Transportation, Assistant Commerce Secretary Lawrence Strickling called for a “consumer privacy bill of rights” that would regulate the collection and use of personal data on the Internet.

Such legislation, he said, would “provide baseline consumer data privacy protections.”

Strickling said the Federal Trade Commission (FTC) should be given authority to enforce the new protections.

FTC chairman Jon Leibowitz has long called for a “Do Not Track” mechanism that would allow Internet users to opt out of having their online behavior and activities monitored.

“The large-scale collection, analysis, and storage of personal information is becoming more central to the Internet economy,” Strickling said.

“These activities help to make the online economy more efficient and companies more responsive to their customer needs,” said Strickling, the Obama administration’s top communications policy advisor.

“Yet these same practices also give rise to growing unease among consumers, who are unsure about how data about their activities and transactions are collected, used, and stored.”

In his opening statement, committee chairman Senator Jay Rockefeller (D-WV) said Congress must act now to pass data privacy legislation.

“There is an online privacy war going on, and without help, consumers will lose,” he said.

“We must act to give Americans the basic online privacy protections they deserve.

“Self-regulation, by and large, has been a failed experiment,” he said.

“The majority of consumers are uncomfortable being tracked online and it is time the law gave Americans a choice in the matter.”

However, Senator Claire McCaskill (D-MO) questioned whether privacy controls might have a chilling effect on online advertising and commerce.

“What is the cost going to be in terms of the economic vibrancy of the Internet?”

“How will we draw the line between what kind of behavioral marketing is fair and what kind of behavioral market invades privacy?” she asked.

“I just think we have to be very careful about the unintended consequences.”

“I just want to make sure that we don’t kill the goose that lays the golden egg here under the very laudable goal of privacy.”

But Leibowitz, who also addressed the committee, played down such concerns.

“The sky won’t fall down on Internet commerce,” he said.

“It’s going to continue.”

“And indeed, if consumers have more trust in the Internet there’s going to be more business on the Internet too.”

“We think most consumers don’t mind being tracked,” he said.

“We just think they should have the option of opting out of that tracking.”

Strickling said the White House had found “a strong level of support among industry” to create new privacy protections, and proposed “working with all stakeholders to develop appropriate codes.”

“We think we can get to a regime that will greatly improve privacy for consumers and still meet the needs of businesses that want to continue to see the growth of the Internet,” he said.

Senator John Kerry (D-MA), who has been circulating proposed privacy legislation drafted with Senator John McCain (R-AZ), said he intends to introduce a commercial privacy bill of rights “in short order.”

“We approached this with a real open mind, and I think people will acknowledge a fair amount of reasonableness and flexibility. But we can’t let the status quo stand,” Senator Kerry said.

Advertisers and data aggregators defend their practices, saying they are necessary to provide relevant advertising to Internet users.

Leibowitz told the committee the FTC was already pursuing companies that were deceptive about their privacy policies.

One such firm is online advertising company Chitika Inc., which allows Internet users to opt out of being tracked, but the opt-out expires after just 10 days.

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