Senate Panel Probes Privacy and Online Advertising

By Bob Grove, Edgelings
  Who owns your “clickstream”—the digital trail of websites you visit on the Internet?  That is the question a Senate panel is exploring this week in what may well be a defining battle of the Network Era.    
The Senate Committee on Commerce, Science and Transportation met Wednesday to take up the issue of internet privacy in the midst of new behavioral advertising practices. Lawmakers have expressed concerns about information gathering by the emerging online ad industry and the consumer’s right to privacy and information protection.
  Testifying before the committee, Federal Trade Commission spokesperson Lydia Parnes said that the FTC has concluded that strict government regulations would be premature, potentially stifling industry growth and proposed rules of industry “self regulation” around suggested principles they claim balances industry need and privacy concerns.
  Also testifying were representatives from industry giants Microsoft and Google. The companies parroted the FTC position saying their concerns were also security and consumer control and high lighting the efforts each company had already made in these areas. However, both companies supported the idea of some form of specific federal regulations that would clarify and supersede the existing patchwork of sector-specific privacy laws.
  Committee Chairperson Daniel Inouye (D-HI) summed up his view of the privacy problems facing the industry in a statement:
   “Too many consumers spend time on the Internet without knowledge or notice that they are under commercial surveillance. They assume they are in the privacy of their own home and that this privacy will be respected. Unfortunately, this is not always the case. I am troubled by the current state of affairs. Consumers in other countries are treated with more respect and concern by the very same companies who so freely collect our most private information without warning. Consumers should not be asked to surrender their privacy each time they go online. ”
  Inouye’s concerns were thoughtfully addressed in written testimony by Clyde Wayne Crews, on behalf of the Competitive Enterprise Institute. Crews noted that any policy “must distinguish between public and private data” and expressed fear that “any privacy legislation may be premature and overly complex.”
Pointing out that privacy and security of data are functions both before and after the fact for web surfers and the companies who collect and store information. Crews went on to admonished the Committee by noting “our greatest privacy concerns should be government collection of our information, not the emergence of targeted marketing.”  Inouye called the hearing a good “first step” and expects more hearings in the fall.

Read the transcript and prepared statements here.