House Panel Moves Closer to Privacy Bill
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Members of a pair of House subcommittees inched closer to the long-awaited privacy legislation that would set rules of the road for advertisers in a joint hearing today, though the lawmakers made it plain that they continue to wrestle with the right balance between protecting consumers' rights without unnecessarily restricting economic activity.
Today's hearing followed several earlier proceedings House members have convened this year to probe the impact of data collection and marketing on consumers' privacy rights. But the scope of today's session was broadened to consider offline marketing practices, which could be affected by the bill as well.
"While we have debated online privacy issues for the past decade, little attention has been paid to how businesses collect, use and disseminate consumers' information offline," said Chris Hoofnagle, director of the information privacy programs at the law school of the University of California, Berkeley.
Today's hearing gave roughly equal voice to members of the private sector, who argue for legislative restraint, and those calling for meaningful privacy guidelines to safeguard consumers' information.
Of course, access to consumers' information that can be used to build businesses around marketing and advertising has considerable benefits, doesn't necessarily entail the nightmare scenario the most vigorous privacy advocates sometime describe.
"Look for the least restrictive alternative," said Jennifer Barrett, the global privacy and public policy executive with data broker Acxiom. Barrett urged the lawmakers to identify the clear consumer harm they seek to prevent in the legislation, and write the bill with a narrow focus to target only those practices.
"If privacy laws overreach, everyone suffers," she said.
Companies that abuse people's data "are blacklisted by consumers," said Michelle Bougie, the senior Internet marketing manager, with LearningResources.com, who was brought in as a representative of small business. She sat next to Zoe Strickland, the chief privacy officer at WalMart.
Bougie argued that firms like hers depend on a flexible regulatory structure to market themselves online, using e-mail addresses and other information to build marketing list and help with their prospecting efforts. She argued that the lawmakers limit their bill to target the sharing of extremely sensitive types of data, such as medical and financial information.
But to the privacy advocates, that argument falls flat. They argue that most consumers don't know what's happening behind the scenes, as data bases are pooled, lists sold, and profiles assembled.
"Americans falsely believe that they enjoy a right of confidentiality with most businesses," Hoofnagle said. "They incorrectly assume that privacy law prohibits the user of their personal information."
Hoofnagle and Pam Dixon, executive director of the World Privacy Forum, warned about the ways that data brokers can obtain consent from consumers to collect and share all manner of personal information that keep with the letter -- if not the spirit -- of existing laws. Those activities, which generally see consumers offering up information without fully understanding how it will be used, should shift the focus of the argument away from the binary opt-in vs. opt-out model that has characterized much of the discussion about online data collection.
"It is easy to trick people into opting in," Hoofnagle said.
Of course, behavioral targeting has helped Internet companies thrive and give away their services and content for free.
"There's no question that there are benefits. I don't think any one is arguing about the benefits," Dixon said. "The problem is there are also harms."