Congress Holds Off on Net Privacy

With a stack of pending privacy bills before it and the industry warming up to the idea of new privacy laws, Congress in just over a week will likely wind down its current session without passing legislation on the controversial Internet privacy issue.

But at a hearing Tuesday, lawmakers heard from industry giants now in favor of some form of privacy laws.

Officials from Hewlett-Packard, America Online, and Walt Disney say they are backing the Consumer Privacy Enforcement Act introduced by Senators John McCain, a Republican from Arizona, and John Kerry, a Democrat from Massachusetts. The proposal is before the Senate Commerce, Science, and Transportation Committee.

Industry has taken the long road to realizing that privacy-related legislation is likely inevitable and is probably necessary to keep consumer confidence in e-commerce high enough to sustain the market. (See "Why FTC Asks for Online Privacy Laws.")

"We believe it is time for government and industry to move forward together to expand consumer confidence and protect consumer privacy," says George Vradenberg, America Online's senior vice president of global and strategic policy, in written remarks.

No Mandatory Opt-In

Industry powerhouses such as America Online have warmed only to those draft bills that stop short of mandatory opt-in clauses for consumers.

Vradenberg says AOL is looking for "market-led initiatives" that provide some baseline standards for Internet companies to follow.

Those standards--limited to notice of data being collected and choice for consumers to opt-out of data collection--should be backed up by strong enforcement measures, says Vradenberg.

At the congressional hearing Tuesday, AOL mentioned current securities laws as a possible avenue for enforcing any new privacy laws. Meanwhile, Hewlett-Packard's manager of technology policy, Scott Cooper, declared dead the "zero-sum game" in the industry around privacy legislation.

"A critical mass of companies are now ready to work with you and find ways to make this work," Cooper said at the hearing.

McCain said that chances are slim that Congress will move on legislation before adjourning, but that Internet privacy will almost certainly heat up again early next year. (See "Privacy Debate Lands in the Senate.")

When Congress does come back to the issue--and no longer has the presidential election looming over the debate--it will have one less privacy bill to consider. Lawmakers on Monday voted down the Privacy Commission Act, which would have established a commission to consider comprehensively all of the privacy issues now swirling around the Internet.