by Rob SpiegelE-Commerce Times 03/21/11 10:46 AM PT
"If a privacy bill passes and has some teeth, it's a good thing," said tech analyst Rob Enderle. "It really depends on what shape it's in when it gets through. A lot of politicians have kids and grandkids who need to be protected, as well as elderly parents who are exposed to attacks. I think the timing is right on this, but Congress tends to move slowly."
The Obama administration's top adviser on communications and information policy, Assistant Secretary of Commerce Lawrence E. Strickling, backed the Federal Trade Commission's proposal for a "Consumer Privacy Bill of Rights," calling for the passage of online privacy legislation last week.
In testimony before the U.S. Senate Committee on Commerce, Science and Transportation, Strickling recommended limiting the power of advertisers while retaining important online freedoms.
"The department has concluded that the U.S. consumer data privacy framework will benefit from legislation to establish a clearer set of rules for the road for businesses and consumers, while preserving the innovation and free flow of information that are hallmarks of the Internet," he said.
Strickling talked about different ways that guidelines regarding online advertiser practices could be applied.
"The Administration urges Congress to enact a 'consumer privacy bill of rights' to provide baseline consumer data privacy protections," he said. "Legislation should consider statutory baseline protections for consumer data privacy that are enforceable at law and are based on a comprehensive set of FIPPs (Fair Information Practice Principles).
"Comprehensive FIPPs, a collection of agreed-upon principles for the handling of consumer information, would provide clear privacy protections for personal data in commercial contexts that are not covered by existing Federal privacy laws or otherwise require additional protection," said Strickling.
Strickling recommended the Federal Trade Commission (FTC) handle the duty of implementing the new guidelines.
Legislation would follow recommendations published in last December's report by the Department of Commerce. The report recommended that consumers be informed more about why their data is being collected and how it will be used. It also called for more limitations of how companies can use consumer data.
What advertisers see as valuable marketing data, consumers could see as an infringement on their privacy.
"The good news is that Internet advertising can deliver results that are relevant to each consumer's wants and needs," Carl Howe, director of anywhere consumer research at the Yankee Group, told the E-Commerce Times. "But the bad news is that for Internet advertising to do that, it must know who you are and what your wants and needs are. It's that knowledge by advertisers and network operators that makes consumers uncomfortable that their privacy is violated."
New legislation would aim to protect customer rights, but it could be a jolt to the advertising industry. "I think this consumer bill of rights is an excellent first step, but the real challenges will be in how it is implemented," said Howe. "Advertisers will argue that blocking them from collecting consumer data will make Internet advertising less valuable to consumers -- and to businesses -- because without the information, ads will become faceless and generic."hanges in online privacy policies could empower consumers.
"Consumers will want control over which advertisers are allowed to target their needs," said Howe. "They may want the ability to allow the local school to target their children with ads for school supplies, but may not want to release that information to magazine publishers or candy manufacturers. The question is just how much control consumers will have."
New laws would likely try to protect consumers without completely hampering advertisers. "I think the challenge is striking a balance between consumer and advertiser interests," said Howe. "To date, the bias has been to the advertiser being allowed to collect whatever information might be useful. This bill tries to establish rights for the targets of those ads too."
Consumer protection could make the Internet a family-friendlier place to spend time.
"A lot of things that come out of Washington are more of a feel-good statement rather than something serious," Rob Enderle, principal analyst at the Enderle Group, told the E-Commerce Times. "The idea that there would be certain unalienable rights to your privacy is a good thing. Right now everybody and their brother is mining your personal information and making money off it but you."
The administration is trying to avoid the decade-long sluggishness from proposal to law. "Laws typically lag reality by a decade or more. The administration -- to its credit -- is trying to close that gap," said Enderle. "If a privacy bill passes and has some teeth, it's a good thing. It really depends on what shape it's in when it gets through. A lot of politicians have kids and grandkids who need to be protected, as well as elderly parents who are exposed to attacks. I think the timing is right on this, but Congress tends to move slowly."