House Panel Moves Closer to Privacy Bill

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.

Members of the two subcommittees are considering draft language of the
bill, which could be introduced in the next several weeks.

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.”

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