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Privacy fuels gov't efforts
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March 9, 2000: 1:05 p.m. ET
Growing Internet privacy concerns spur politicians to introduce new legislation
By Staff Writer Michele Masterson
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NEW YORK (CNNfn) - Take the burgeoning Internet population, add in mounting concerns about user privacy, throw in the recent DoubleClick imbroglio, and stir in an election year. The result is a politician's recipe for new legislative efforts aimed at serving the rights of the average U.S. Web surfer.
Net users are becoming aware that Web sites may be encroaching on their privacy by collecting personal information about them, including home and e-mail addresses, phone numbers, and Web surfing habits.
Realizing that the subject of Internet privacy strikes a chord with voters, federal and state politicians have introduced a flood of new bills aimed at safeguarding consumers' personal information from aggressive advertisers and direct marketers.
"Our right to privacy is at risk," said Sen. Tom Daschle (D-S.D.) in a recent statement. "As a result, some of our most sensitive, private matters end up on databases that are then sold to the highest bidder. That is wrong, it's dangerous, and it has to stop."
Many bills, one law
Spurred by Web privacy violation worries, Congress and state legislatures have kicked into high gear. There are 131 Internet and e-mail privacy bills pending in 31 states, and between 55 and 60 state legislators have introduced privacy bills within the past few months, according to Andrew Matthews, communications and research manager at the Internet Alliance, a technology industry trade group.
While there is no shortage of lawmakers pushing for stricter control of Internet privacy, the only law Congress has passed directly relating to online privacy is the Children's Online Privacy Protection Act of 1998. The act, authored by Sen. Richard Bryan (D-Nev.), prohibits Web sites targeted at children from collecting personal information from people under age 13 without verifiable consent from a parent.
"Even though they are in their own family's home, young children are meeting strangers on the Internet," Bryan said when his measure passed the Senate. "It is clear to us that young children are being asked personal questions, including questions about their family finances, that are inappropriate unless their parents agree with providing the information."
Congress examines privacy
 Last month, Congress formed new committees to examine privacy issues, including the bi-partisan Congressional Privacy Caucus. The group, led by Rep. Joe Barton (R-Tex.), Sen. Richard Shelby (R-Ala.), Sen. Bryan, and Rep. Ed Markey (D-Mass.), said it will study online privacy-related issues and introduce legislation if it is needed.
"Americans would never allow a stranger at their front door access to the level of personal, private information about them that is being let out the cyber door," Sen. Barton said.
Also in February, Sen. Daschle formed the Senate Democratic Privacy Task Force to study what measures should be taken to protect medical, financial, and other personal information. The panel is chaired by Sen. Patrick Leahy (D-Vt.).
"We have reached the point that if you have a medical record, credit card or computer, you have a privacy problem," said Leahy in a statement.
Among the myriad bills up for consideration one introduced by Sen. Robert Torricelli (D-N.J.) that focuses on Web sites' use of "cookies" to track visitors' surfing habits. The measure would require Web sites to disclose when they use cookies and to seek permission before disclosing personal information.
Toricelli is critical of current "opt-out" measures, in which consumers can contact companies and request that their personal information be kept private. He wants the onus to be placed on the companies, rather than the user.
Some Internet privacy experts aren't convinced that the Torricelli bill will keep the Internet's rapid rate of innovation, while other critics note that Net users have always had the option of disabling cookies on their browsers.
"So you make it difficult for people to use cookies; so what?" said Deborah Pierce, staff counsel for the Electronic Frontier Foundation, an advocacy group for online user rights. "Something else will come along to take its place and then you're back to square one."
Politicians have taken their direction not only public outcries, but also from the Federal Trade Commission, which is charged with overseeing consumer protection issues and has been directed by Congress to issue findings and rule on Internet privacy issues.
The FTC took its first Internet privacy related action in 1998 in a case involving the popular Web site GeoCities, which is now owned by Yahoo! In August of that year, GeoCities agreed to settle FTC charges that it that it misrepresented the purposes for which it was collecting personal identifying information from children and adults.
The FTC also reached a settlement in May 1999 with Liberty Financial Companies, Inc., operator of a Web site called YoungInvestor.com. The agency alleged that the site falsely represented that personal information collected from children in a survey would be maintained anonymously when, if fact, the personal information about the child and the family's finances was maintained in an identifiable manner.
 Despite these actions, the FTC has been reluctant to recommend new legislation to Congress involving Net privacy, instead bowing to the industry's call for self-regulation.
In a speech last year, FTC Commissioner Orson Swindle said that attempts by the government to regulate the Internet would be "a formula for bureaucracy building, government intrusion and a stifling of economic growth -- in other words, many potential unintended negative consequences."
"The FTC has not moved at Internet speed," said Evan Hendricks, editor of Privacy Times. "They were advised years ago to move towards advocating legislation and they took hits for not doing so last summer."
In its most recent privacy-related action to date, the FTC announced last month that it will conduct a survey of U.S. commercial Web sites to determine the extent to which these sites are collecting personal information from online consumers and "implementing fair information practices of notice, choice, access and security." The survey will include a random sample drawn from a list of the busiest sites on the Web, as well as a census of all of the 100 busiest sites.
The FTC has also formed an advisory committee about online access that includes many prominent Web companies, public interest groups, and trade groups. The committee began talks in February to discuss privacy concerns and will share its findings from meetings that will continue through May.
"Last year we took the position that legislation was not appropriate at this time," said David Medine, chair of the latest FTC advisory committee.
"We're prepared to say that if self-regulation has not achieved the results it should have by now, we're prepared to call for legislation. We're essentially at an important crossroad," Medine said.
Changes on the way?
Internet watchers believe that between the efforts of politicians and the FTC, the year 2000 may bring an end to industry self-regulation and the start of serious intervention by lawmakers.
"It's becoming increasingly likely that Internet privacy legislation will get serious consideration now," said Privacy Times ' Hendricks.
The EFF's Pierce believes that legislation is necessary, but not the only ingredient needed for addressing Internet privacy woes.
"I don't think legislation is the only solution, consumer education is a part of it," said Pierce. "I think technology has a role, giving people tools to 'anonymize' their surfing habits and giving them control over their data."
Web companies just may end up endorsing some form of federal privacy regulation to avoid being regulated by a confusing array of state laws.
"Without comprehensive federal legislation, it is possible that something of a vacuum will be created and states may enter, not always with consistent proposals, to protect the privacy of their citizens," FTC Chairman Robert Pitofsky said in a recent speech. "There may soon come a point when the business community will have to decide whether it prefers a single comprehensive federal rule, or a situation in which a variety of state rules create difficult to follow mandates." 
-- Click here to send e-mail to Michele Masterson
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