- The Washington Times - Thursday, October 12, 2000

House members yesterday said it's time to help Internet users by passing legislation to protect their privacy because industry self-regulation by itself hasn't worked.

Some predicted new laws will be approved as soon as next year.

"In my view, the time for legislation has now arrived," Rep. Rick Boucher, Virginia Democrat, said at a hearing of the House Commerce telecommunications, trade and consumer protection subcommittee.

Congress has been cautious about enacting privacy laws, fearful that legislation could slow the Internet's rapid growth.

"Overregulation of the engine of growth of our economy would be foolhardy, and imposing rigid regulations that don't take into account new privacy-protection technology would be shortsighted," Rep. Thomas J. Bliley Jr., Virginia Republican and chairman of the House Commerce Committee, said yesterday.

But support is growing for laws to protect consumer privacy on line, said Gary E. Clayton, chief executive of Privacy Council, a Dallas consulting firm that helps businesses deal with privacy and security issues.

"I think there is a groundswell of support. I think by next year there will be a growing consensus in Congress for the need for Internet-privacy laws," he said.

Lawmakers have relied on industry self-regulation to protect consumers, and privacy seals have been the most common form of those self-regulatory efforts.

Under privacy-seal programs, Web companies post a logo on their site if they agree to adhere to the privacy policies of organizations like TRUSTE, a San Jose, Calif.-based company that has more than 2,000 businesses enrolled in its program, or BBBOnline, the Internet arm of the Council of Better Business Bureaus, which has 650 companies enrolled in its privacy-seal program.

Andrew Shen, policy analyst at the District of Columbia-based civil-liberties group Electronic Privacy Information Center, told lawmakers yesterday industry self-regulation is not enough to address consumer concerns.

Congress has passed just one major law to protect consumer information on line.

The Children's Online Privacy Protection Act, which took effect April 21, is intended to protect the privacy of children 12 years old and younger by requiring on-line companies to get approval from parents before collecting their personal data.

A second law also could help bolster on-line privacy. Last year's law to overhaul banking regulations included a measure that lets consumers, by written request, stop financial companies from sharing their data with companies outside the corporation, such as telemarketers.

But consumer patience is wearing thin and more Web users want privacy laws in place, Mr. Shen said.

"It is no secret that consumer concerns about privacy on the Internet have not dissipated at this time. If anything, recent developments such as on-line profiling indicate that the current approach of self-regulation may be putting consumer privacy at increasing risk," he said.

One case that raised awareness about the fragile nature of personal privacy occurred earlier this year when bankrupt Web firm Toysmart.com announced it would sell all its assets, including its customer list.

That violated its own privacy policy.

The company, majority owned by Walt Disney Co., reached an agreement with the Federal Trade Commission (FTC) that set conditions on any potential sale, including a requirement that the list only be sold to a buyer in a related market who agrees to abide by the terms of the Toysmart.com privacy promise.

The FTC in May asked Congress for more authority to patrol the Internet and recommended legislation requiring commercial Web sites to notify visitors what information is collected about them and how it will be used. The proposal also would give consumers the option to choose whether information can be shared and give them access to review information collected by a Web site.

Mr. Boucher embraced the FTC proposal yesterday.

"The FTC has called on Congress to act, and it's time for us to do that," he said.

Rep. Robert W. Goodlatte, Virginia Republican, suggested a combination of industry self-regulation and targeted laws would improve consumer privacy.

He also said new federal privacy legislation would help avoid "an unworkable situation" that could be created if each state has its own privacy laws.

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