House Leaders Moving Closer to Privacy Bill

WASHINGTON — Two House subcommittees continued their inquiry into the privacy implications of online advertising today, turning their sights on behavioral targeting, the practice of compiling information about users’ Web activities to serve relevant ads.

Today’s joint hearing comes as House leaders are drafting legislation that would set restrictions on the liberties marketers can take with consumers’ data, guidelines that could extend to advertising both online and off.

Representatives of Google, Yahoo and Facebook reiterated their opposition to any law that would set specific restrictions on behavioral targeting.

Instead, Nicole Wong, Google’s deputy general counsel, said in her prepared testimony that the search giant “supports the passage of a comprehensive federal privacy law” that would establish “a uniform online and offline framework for privacy.”

But Wong and the other representatives from industry praised the work of the Federal Trade Commission in developing principles for a self-regulatory framework for behavioral targeting.

For privacy advocates like Jeff Chester, executive director of the Center for Digital Democracy, that approach has failed to set meaningful protections for consumers.

“Industry self-regulation, it is clear, has failed to offer meaningful protections to consumer privacy,” Chester said in his prepared testimony.

The extent of the privacy bill Rep. Rick Boucher, D-Va., the chairman of the Subcommittee on Communications, Technology and the Internet, is expected to introduce before the end of the year remains unclear.

Boucher and Cliff Stearns, the Ranking Republican on the subcommittee, have asked various stakeholders to submit draft language before Congress recesses in August.

And language is a challenge. In creating legislation that would set rules for a quicksilver world like online advertising, the lawmakers realize they are in ambiguous territory.

“Words and phrases, such as ‘transparency,’ ‘choice,’ ‘notice,’ ‘consent,’ ‘consumer expectations,’ ‘opt in,’ and ‘opt out’ seemingly mean different things to different speakers depending on an array of variable,” said Bobby Rush, the Illinois Democrat who chairs the Subcommittee on Commerce, Trade and Consumer Protection.

Boucher acknowledged that online advertising drives the “commercial content, applications and services that are available to Internet users without charge.” He said he has “no intention” of pursuing legislation that would disrupt that arrangement.

“At the same time I think consumers are entitled to some baseline protections in the online space,” he added.

He outlined a framework for behavioral targeting on first-party sites that would require explicit notice about how consumers’ information is collected, used and stored, requiring users to opt out of the data collection. But when Web sites share information with third-parties, Boucher suggested that they should have to obtain explicit permission.

“Consumers should be able to opt in to users of their information by third parties,” he said.

That could set the stage for a regulatory regime that would curtail the activities of some online ad networks, which aggregate cookies and other information to build profiles of users to serve targeted advertisements.

A hybrid opt-in/opt-out model would likely fall in the middle ground between the hopes of industry and the advocacy groups.

In arguing against legislation that would clamp down specifically on behavioral targeting, Google, Yahoo and others can be oppose any sort of opt-in provisions.

That contrasts with advocates like Chester, who told InternetNews.com this morning that he plans to fight for a universal opt-in framework.