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Senators, Tech Giants Seek Answers on Privacy

Data privacy

WASHINGTON -- Bob Dykes, CEO of NebuAd, an online advertising and consumer tracking firm, fired back at critics of his company's practices during a Senate committee hearing here today, amid growing government concern over privacy issues in Internet advertising.

"NebuAd's systems are designed so that no one -- not even the government -- can determine the identity of our users," said Dykes, reiterating the company's claim that it does not collect any personally identifying information. "Allegations by others that we do not provide an opportunity to opt out and provide robust notice to users -- or that we collect the entire Web traffic of users -- are simply not accurate," Dykes said.

Dykes testified that his company's technical-filtering system automatically discards Web activities that do not fall into one of the marketing segments it has developed to sort and match ads. He also said NebuAd excludes sensitive areas such as health care and medicine from its market segments.

As legislators and regulators continue to grope for an answer to the question of what role government should play in the online advertising market, Internet companies realize they are fighting an image problem when it comes to stockpiling massive amounts of consumer data.

In today's hearing, senators and witnesses generally acknowledged a delicate balance in play, namely that advertising enables Web sites to offer content and services for free, and ads are more effective when targeted to consumer interest.

Jane Horvath, senior privacy counsel for Google (NASDAQ: GOOG), and Mike Hintze, associate general counsel with Microsoft (NASDAQ: MSFT), reiterated their companies' support for self-regulation. “Google supports the passage of a comprehensive privacy law that would establish a uniform framework for privacy and procedures to punish bad actors,” Horvath said.

The two companies advocated a federal privacy law that would apply to all industries' management of consumer data. However, the law as they envision it would not contain unique requirements for online advertisers.

Although social networking site Facebook didn't take a stand on privacy laws, it acknowledged the issue. "Though we will not always address user concerns perfectly -- no site can -- Facebook is committed to empowering users to make their own choices about what information they share, and with whom they share it," said Chris Kelly, Facebook's chief privacy officer.


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