Senators voiced concern on Wednesday about finding the right balance between the continued growth of advertising-based free content on the Internet and ensuring consumers feel confident that their privacy is protected when they surf the Web.
While in the process of crafting his own privacy bill, Sen. John Kerry, D-Mass., pressed Federal Trade Commission Chairman Jon Leibowitz, Lawrence Strickling, administrator of the Commerce Department's National Telecommunications and Information Administration and others on finding that right balance.
"We can't let the status quo stand," Kerry, chairman of the Commerce Communications Subcommittee, said during a hearing on consumer privacy. "We can't let the collectors of information dictate the level of privacy protection people will get when they engage" on the Internet.
The latest draft of Kerry's privacy legislation includes many of the provisions endorsed by Strickling in testimony reflecting the Obama administration's position.
This includes a "consumer privacy bill of rights" to incorporate the Fair Information Practice Principles embraced by many countries, such as providing consumers with notice about the information being collected about them, choice, access to the information and security to ensure the data is protected.
Privacy groups said they thought the administration proposal was too weak. The Center for Digital Democracy, Consumer Action, the Consumer Federation of America, Consumer Watchdog, U.S. PIRG and the World Privacy Forum worried that industry players would take over developing such standards.
"The involvement of a multi-stakeholder process should inform, not replace, rulemaking," they said in a joint statement.
Strickling said the administration is not proposing a specific bill. However, he noted that the Commerce Department is developing a statement of policy on privacy, which he hopes to finish by spring.
Kerry and other members pressed both the government witnesses and industry and privacy advocates about the best legislative approach. Kerry questioned Leibowitz on the FTC's call, included in its own staff privacy report released in December, for the creation of a do-not-track system to allow consumers to opt out of being followed on the Web for advertising purposes. Kerry asked whether requiring such a system would punish companies with strong privacy policies.
Leibowitz noted that a do-not-track proposal would provide more protection from firms that do not respect consumer privacy and also would give consumers a choice on whether they want their Internet activities monitored even when companies do provide strong privacy protections. Several browser makers,including Microsoft and Mozilla, have committed to incorporating do-not-track mechanisms in their latest browsers.
Many companies now track consumers when they go from website to website in order to target ads to them based on their preferences. And Kerry suggested that people may not mind this.
"We have found historically people consistently say this is something [they are] really super, super concerned about, then tend to engage in practices on the Internet that sort of belie that a little bit," Kerry said.
American Civil Liberties Union Legislative Counsel Chris Calabrese said despite the best intentions of some companies, consumers do not have a federal law they can fall back on when needed. "Company promises are important but not enough," he said.
Sen. Claire McCaskill, D-Mo., voiced concern that overly restrictive regulations could hinder the growth of the Internet and advertising-supported free content as well as innovative approaches to protecting privacy developed by industry players.
"I just think we've got to be very careful about unintended consequences," she said. "We don't want to handcuff the good guys."
Strickling responded that he believes the legislative proposals he outlined answers such concerns, saying they would provide baseline privacy protections while also providing industry with flexibility to craft more specific proposals.
Microsoft and Intuit are among companies that favor legislation. Officials from both firms signaled support for Kerry's draft at the hearing. Intuit Chief Privacy Officer Barbara Lawler said her company likes the "direction that the proposal is going."
Kerry said he is still refining his bill and has been trying to find a Republican co-sponsor. He has been in discussions with Sen. John McCain, R-Ariz., a former chairman of the Commerce Committee, but he has not signed on yet.
"I hope we can introduce it in short order," Kerry said. "We need to do it, and do it soon."