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US House Panel To Consider Privacy Legislation

Published Wednesday, 21st July 2010 05:15 am - © 2010 Dow Jones


By Shayndi Raice

Of Dow Jones NEWSWIRES

WASHINGTON -(Dow Jones)- A U.S. House panel will consider online privacy legislation on Thursday, aimed at limiting the collection and use of consumer data.

A panel of the House Committee on Energy and Commerce will examine draft legislation proposed by Rep. Bobby Rush (D., Ill.) and Reps. Rick Boucher (D., Va.) and Cliff Stearns (R., Fl.) that would require companies to give notice to, and gain consent from, consumers before collecting or disclosing private information.

Consumer groups and privacy advocates have pushed for a comprehensive privacy law that would limit online companies' ability to target shoppers for unsolicited marketing and deny goods and services based on a customer profile.

The legislation comes in the wake of several public consumer privacy scandals, like changes to Facebook users' privacy settings and the collection of payload data from open WiFi networks through Google's Street View cars.

Both versions of the legislation would require companies to notify customers of its privacy policies and obtain affirmative consent before using personal information. Companies must also allow consumers the option to opt out of the collection or use of personal data. In the Rush bill, the Federal Trade Commission would serve as the federal watchdog for online privacy issues. The agency would also have the power to impose civil penalties.

"Today, wherever consumers go they face a massive and largely invisible data collection apparatus," said Jeff Chester, president of the Center for Digital Democracy, a consumer advocacy group. "[The bills are] an acknowledgment--and consumer advocates have been waiting a long time--that this massive growth of online data collection poses serious risks to consumer welfare, including privacy."

But Mike Zaneis of the Interactive Advertising Bureau, an industry group, said he has a "great deal of concern with the bill and how it would affect the online advertising ecosystem."

He said the Rush legislation, which was released Monday, is more palatable to industry groups because it allows for greater self-regulation by online companies. Companies that participate in a Federal Trade Commission self-regulatory program, for example, would not have to obtain affirmative consent before accessing private information, but would instead only have to provide consumers with a way to opt out.

The legislation has been in the works for the last 15 months. The House Subcommittee on Commerce, Trade, and Consumer Protection and the Subcommittee on Communications, Technology, and the Internet have held five hearings to date on consumer privacy issues.

-By Shayndi Raice, Dow Jones Newswires; 202-862-9291; shayndi.raice@dowjones.com.

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