Wall Street Journal
by JENNIFER VALENTINO-DEVRIES
March 17, 2011
Sen. John Kerry, a senior Democrat, and technology giant Microsoft Corp. on Wednesday backed the Obama administration's call for broad privacy legislation at a Senate hearing that also exposed hurdles to passing such a law.
"Modern technology allows private entities to observe the activity of Americans on a scale that is unimaginable, and there is no general law" governing the collection and use of that data, Sen. Kerry told the Senate Commerce Committee.
The Massachusetts lawmaker said he was working with others and soon planned to introduce a "privacy bill of rights."
The Commerce Department called at Wednesday's hearing for a privacy law that includes enforceable protections for consumers' personal information and a stronger role for the Federal Trade Commission.
Unlike the European Union, the U.S. doesn't have a federal law establishing a general right to privacy. U.S. laws protect only certain types of information, such as some data about health care or personal finances.
Concerns about the online tracking industry have increased the public's interest in privacy rights. In the past year, The Wall Street Journal's "What They Know" series has revealed that popular websites install thousands of tracking technologies on people's computers without their knowledge, feeding an industry that gathers and sells information on their finances, political leanings and religious interests, among other things.
The FTC and the Commerce Department both have issued recent reports calling for enhanced privacy protections. FTC Chairman Jon Leibowitz told the committee Wednesday that the Journal series "really was a motivation for us to step up our enforcement efforts and write" the report.
He also said one of the articles in the series alerted the FTC to the fact that new tools to stop tracking were technically feasible.
An executive of Microsoft, which makes the most popular Web browser and also operates one of the largest Internet advertising networks, echoed the call for a broad privacy law. The current piecemeal approach to privacy law "is confusing to consumers and costly for businesses," said Erich Andersen, the company's deputy general counsel.
Microsoft is incorporating two additional privacy protections into the new version of its Internet Explorer browser.
The push to enact a federal privacy law remains in its early stages. Sen. Kerry said he has been working on proposed legislation with Sen. John McCain, an Arizona Republican, suggesting support for such a measure crosses party lines.
A spokeswoman for Sen. McCain said he and Sen. Kerry are discussing specific language for the bill.
"Sen. McCain believes that any legislation, if necessary, should respect the consumers' ability to control the use of their personal information, while recognizing the need of companies" to innovate and target advertising to consumers, she said.
Skepticism about the need for a new law also cuts across party lines. Sen. Claire McCaskill, a Missouri Democrat, questioned whether limitations on data collection would hinder the ability of websites to provide free content.
"I just want to make sure that we don't kill the goose that laid the golden egg here under the very laudable rubric of privacy," she said.
Advertisers, too, are wary of new rules. The industry has been promoting an icon that appears on certain ads to alert consumers that they are being targeted, and to let them opt out of the system.
Meanwhile, industry executives have objected to the FTC's call for browser makers to create a "do not track" system that would let Internet users signal they don't want their online movements recorded.
Having both a do-not-track tool and the industry-backed icon could confuse consumers, said John Montgomery, an executive with GroupM Interaction, part of advertising giant WPP PLC.
"It's vitally important to avoid mixed messages," he said.
The FTC's Mr. Leibowitz, however, said a majority of commissioners believe the icon system isn't adequate, because it would allow marketers to continue to collect some data on Web surfers.
"We need to make sure 'do not track' is not an empty slogan," he said.
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