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Privacy Is A Top State Priority
As Internet privacy issues take center stage on Capitol Hill, state lawmakers also are grappling with how to protect consumers' private information while fostering the growing Internet economy.
Massachusettes Lt. Gov. Jane Swift, R, went to Silicon Valley last week to meet with high-tech industry representatives, including officials from Netscape and TRUSTe, to discuss how privacy issues are changing the landscape of e-commerce and what role states should play in monitoring self-regulation by the private sector.
"We're going to be continuing to meet with industry folks and industry leaders to make a renewed push to advocate for action at the federal level," Swift told National Journal's Technology Daily in an interview. "I think a lot of folks believe there's need for some sort of federal standard in the privacy debate - how they become enforced, what the standards for information sharing should be."
Swift and Gov. Paul Cellucci, R-MA, have made Internet issues a priority during their administration. Following her swearing in as lieutenant governor in 1998, Swift chaired the governor's transition team, where she drafted legislation covering both online and offline privacy protections. The bill includes provisions for how personal information can be used, how much a Web site must tell users about its privacy policies and calls for allowing consumers to "opt-in" to give personal information. But the state legislature's Commerce and Labor Committee spokesman Kurt Pressier said the bill is still under review and is not expected to move anywhere before the end of the session, which is four weeks from now.
In January, Swift became the only elected official to the Federal Trade Commission's Advisory Committee on Online Access and Security after being one of the first state officials to file legislation that would stop businesses from sharing details on customers.
Swift has also been in talks with domestic policy advisors for Republican presidential candidate George W. Bush. Discussions have included where the privacy debate is headed and what possible tactics the Texas governor could use if he chooses to launch a privacy platform for his campaign, said Swift spokesman Jason Kauppi.
Michigan Attorney General Jennifer Granholm has also been a vocal advocate for Internet privacy. In February, Granholm filed a lawsuit against DoubleClick advertising and the two Web sites it owns and controls. The suit alleges that DoubleClick violated the Michigan Consumer Protection Act and other laws by failing to disclose to users that the site systematically places "cookies" on users' hard drives.
Granholm supports a plan floated by privacy advocates that would require Web site operators to place a uniform privacy icon on their home pages to let consumers know where to find a site's privacy policy that explains what personal information is collected and how it will be used.
New York Attorney General Eliot Spitzer proposed a legislative package as soon as he took office last January and created the Internet Bureau to specialize in Internet issues from a consumer protection standpoint. Its mission is to coordinate investigations and prosecutions of civil law enforcement actions involving computers, online services, and the Internet, as well as child pornography and other crimes committed online. The bureau also reviews and prepares legislation in cases where current laws appear inadequate to address the development of the Internet. The state assembly tackled legislation this session dealing with consumer permission to sell or exchange personal information via the Net, junk e-mail, credit reporting and identity theft.
NAAG Talks Big Privacy Talk
State attorneys general gathered last week to find some common ground on the issue of Internet privacy as panelists debated the role of state and federal regulators in the Internet economy.
At its annual summer meeting in Seattle, the National Association of Attorneys General acted on its March vow to make computer crime and consumer privacy a top priority. The attorneys' efforts have been fueled by recent victories over corporate interests, such as the recent federal antitrust ruling by Judge Thomas Penfield Jackson to break software giant Microsoft into two separate companies.
The attorneys agreed that the states cannot leave it to the federal government to swiftly address privacy issues without stepping on state officials' toes.
"This is an area that is core to our jurisdiction," said New York Attorney General Eliot Spitzer. "Certainly, in the gridlock we've seen in Washington, if we are preempted it would leave [an enforcement] vacuum."
The issue of Washington's role is "a double edge sword," said Michigan Assistant Attorney General Stanley Pruss, head of the office's Consumer Protection Division. "There needs to be uniformity and standards, you can't just have a patchquilt."
The four elements of current privacy standards - notice, choice, access and security - have been left up to the states to regulate to date. But what state officials don't want is 50 different sets of regulations.
"Requiring and enforcing those things are areas that sound consumer protection are traditionally the states' roles," Pruss said. "What the states don't want is complete preemption should there be federal privacy actions - they want some role in it."
Whether it be privacy issues, Internet taxation, or e-commerce standards, Capitol Hill politicians are still debating who should have more control - the federal government, the states, or the online industry itself.
One such attempt to establish some standard was recently introduced in the Senate. Sen. Ernest Hollings', D-SC, S. 2606, was tagged the "opt-in" bill and was the subject of hot debate by the attorneys in Seattle. Instead of giving Web consumers the choice to "opt-out" of having their personal information used for purposes such as direct mail marketing, the Hollings bill would allow consumers instead to automatically not have their information used in these ways, and would leave it to consumers to "opt-in" to agree to have their information used.
Opt-in proposals have been opposed by most commercial sectors, but recently, an increasing number of Internet-based marketing firms that ask for permission before sending commercial e-mail are encouraging other industry representatives to work with lawmakers and support opt-in measures. They say the policy is more protective of individuals' privacy and is also good business sense. But representatives from groups like the financial services industry protested.
As for whether a consensus was reached among the state attorneys about taking the next step toward reforming privacy standards, Pruss said he could not comment on details.
"This conference was about privacy and the state attorneys general are very interested in this issue," he said. "I think it's safe to say the attorneys general strongly believe that Internet companies have to adopt some form of information practices. It is of critical importance that there has to be some more uniformity to privacy policies."
- by Liza Porteus
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