Calls by the Obama administration and the Federal Trade Commission for privacy legislation got a skeptical reception on Thursday from Republican members of a key House committee.
“Before we do any possible harm to the Internet, we need to understand what harm is actually being done to consumers. Where is the public outcry for legislation? Today I’m simply not hearing it,” Rep. Mary Bono Mack, R-Calif., chairwoman of the Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade, said during a hearing on the issue.
Bono Mack has held a half-dozen hearings on privacy, and she said she plans to hold at least two more before making a final decision on whether legislation is necessary.
In its long-awaited privacy report released on Monday, the FTC called for “targeted” legislation that would place new limits on the actions of data brokers and give consumers access to information held about them. The agency also urged the data-broker industry to set up a website to shed more light on what they do, reiterated calls for data-breach legislation, and recommended that lawmakers “consider” enacting broad privacy protections for consumers.
In its privacy report released last month, the administration called on Congress to enact a “privacy bill of rights” implementing seven principles that would give consumers more information and control about what data websites, app developers, and others collect about them. At the same time, the administration wants industry, privacy advocates, and others to develop voluntary industry “codes of conduct” to implement these privacy principles while Congress decides whether to enact legislation.
Rep. Pete Olson, R-Texas, praised some of the self-regulatory initiatives launched by industry groups such as the Digital Advertising Alliance to address privacy concerns on their own. “I think the self-regulatory proposals by industry are showing real signs of progress,” he said.
Larry Strickling, chief of the Commerce Department’s National Telecommunications and Information Administration, which took the lead in crafting the administration’s privacy proposal, argued that legislation would also benefit U.S. companies by making it easier for them to operate in Europe and other countries that require companies to adhere to strict privacy rules. Privacy is “not just a U.S. problem, it’s a global problem,” he said.
And there is some concern even among Republicans that if consumers don’t trust that their personal information will be protected, they may be less likely to shop online and engage in other online activities. Rep. Adam Kinzinger, R-Ill., said he generally opposes “needless regulations that do little to protect consumers or protect jobs, but I do have some serious concerns that without privacy protections, consumers could lose confidence in the online free market, and that could be counterproductive.”
Online advertisers and marketers questioned the FTC’s call for data-broker legislation. Interactive Advertising Bureau Senior Vice President Mike Zaneis told the panel that the FTC’s definition of a “data broker” is far too broad. In its report, the FTC defines data brokers as companies that “collect information, including personal information about consumers, from a wide variety of sources for the purpose of reselling such information to their customers for various purposes, including verifying an individual’s identity, differentiating records, marketing products, and preventing financial fraud.” Zaneis said his members worry that this would capture a wide range of companies including online publishers, advertisers, advertising networks, and analytics firms.
“If they use their definition… and they put [the same] restrictions seen in very narrowly tailored data-broker legislation, you absolutely would have an all-encompassing regulatory network,” Zaneis said.