Privacy Debate Lands in the Senate

Widely split on how to regulate privacy practices on the Internet, lawmakers on Thursday took up new legislation generated on behalf of the U.S. Federal Trade Commission.

The Senate Commerce Committee convened a hearing to comb through issues surrounding the Consumer Privacy Protection Act of 2000.

While certain Senators spoke up for businesses blindsided by the FTC's support for new privacy laws, others expressed concern that self-regulation is not enough.

On both sides, however, lawmakers said they are worried about rogue Web sites that routinely expose confidential information in shipping data back and forth, especially in e-commerce marketing plays.

Those practices could lead to an online privacy equivalent of an "Exxon Valdez," said one senator.

But how, whether, and when to begin mandating certain privacy practices split both the Senate Commerce Committee and FTC members testifying at the hearing.

Three FTC members spoke out in favor of passing new privacy statutes, including FTC Chairman Robert Pitofsky.

"I'm all for self-regulation, but only if those self-regulators can say 'If you fail to give better notice than what you have, you will be referred to a law enforcement agency,'" Pitofsky said.

Industry efforts such as the Better Business Bureau Online and Truste's privacy seal programs just don't have enough teeth, nor are they widely used, Pitofsky told the full panel of senators.

Pitofsky and others acknowledged that the number of Web sites posting privacy statements has skyrocketed in the last two years from 14 percent to 88 percent.

"But in that 88 percent, there are a number of statements that are misleading, some that just say 'We protect your privacy,' or possibly even some that post notices which say 'We don't protect your privacy,'" he said.

No New Laws

FTC Commissioner Orson Swindle is one of two members not completely on board with the FTC's recommendation that Congress legislate in the area of privacy.

"Legislation could start to eliminate or reduce choices for consumers," Swindle said. "I think we should reserve legislation for problems that the market cannot fix."

Committee chairman John McCain, a Republican from Arizona, at one point during the hearing used Yahoo's eight-page privacy statement to point out some of the potential shortcomings in statements held on popular Web sites.

"I don't mean to pick on Yahoo, but I believe it is the most popular Web site out there," McCain said.

He also pointed to DoubleClick's statement, saying a user had to read through reams of information before figuring out how to get out of having his or her data shared.

Said Pitofsky in answer to McCain's concerns about DoubleClick's privacy statement, "I would not have been able to figure out how to opt out without help."