Congress considers slew of privacy bills

From...

By Keith Perine

(IDG) -- Privacy isn't just an Internet issue anymore.

With technology putting a sinister sheen on decades-old marketing practices, last year's rash of alleged privacy abuses by Internet companies has brought new scrutiny upon traditional companies.

The potential for abuse -- advertisers, for instance, could soon pinpoint cell-phone users and beam them messages based on their shopping habits -- has prompted Congress to consider a series of bills that, taken together, would dramatically restrict retailers, financial firms, health insurers and schools from sharing customer information.

MESSAGE BOARD Security on the Net   IDG.net INFOCENTER The Standard's Main Page The Standard's Commerce News Sign up for daily news from The Standard The Standard's Company Research Related IDG.net Stories Voter.com to sell membership list State attorneys general modify privacy stance Senate approves limits on dot-com database sales Features How to make a million while working at a non-profit Is your idea as cool as you think? Bluetooth readies for its close-up Visit an IDG site Choose a site: IDG.net CIO Computerworld Darwin Dummies.com GamePro.com The Industry Standard ITWorld.com InfoWorld.com JavaWorld LinuxWorld Macworld Online Network World Fusion PC World Publish.com SunWorld IDG.net search

One bill would bar schools that receive federal funds from disclosing students' personal data to companies without parental consent. Other legislation would guard the privacy of Social Security numbers, genetic information and data collected by wireless firms.

Also, an amendment to a bankruptcy reform bill that cleared the Senate on March 15 would prohibit debtors from selling consumer data if they previously pledged to keep that information private. That provision is likely to get a boost from last week's move by defunct political portal Voter.com to sell its list of 170,000 e-mail addresses, complete with individuals' party affiliations and political interests.

Fearing the impact of new laws, the Direct Marketing Association recently unveiled studies purporting to show that such legislation could cost consumers billions of dollars.

The marketing industry apparently hoped to steal thunder from a workshop convened the next day by the Federal Trade Commission that examined how companies can blend data collected online and offline to create detailed dossiers on consumers.

Business lobbyists have powerful incentives to keep up the fight. Under one bill, banks and other financial institutions would have to notify customers before sharing their account information with a subsidiary like a brokerage service. Other legislation would bar education companies from disclosing students' Web surfing without parental permission. That could hurt companies like N2HO, which aggregates and sells student data. Another bill would prohibit wireless companies from using customer data for marketing without securing the customer's approval.

The privacy war presents a particular dilemma for companies like AOL Time Warner. (AOL Time Warner is the parent company of CNN.com.) Wall Street wants the conglomerate to capitalize on its extensive online and entertainment assets to cross-promote its products. But privacy advocates are pressing the company to keep its databases separate. An AOL spokesman says divisions will share only customer names and addresses, not e-mail addresses or phone numbers.

Such pledges may not be enough to head off legislation, if the heated rhetoric at last week's FTC privacy workshop is any indication.

Direct Marketing Association exec Jerry Cerasale argued that restrictions on the ability of catalog businesses to collect consumer data could cripple smaller firms. That, he declared, would harm rural and inner-city residents who may lack access to traditional retailers.

But privacy advocates gave little ground. Evan Hendricks, editor of the Privacy Times newsletter, called for an investigation of mail-in warranty cards. He said consumers mistakenly believe they must send in cards laden with personal information to maintain product warranties. Such data could be matched against their Web browsing habits to create profiles of their interests.

When technology makes even warranty cards for toasters a threat to privacy, the chances of keeping lawmakers focused on the Internet seem increasingly remote.

Concerns remain about FBI's 'Carnivore' wiretap
March 12, 2001
Consumer group: Online privacy protections fall short
January 26, 2001
States to weigh in on Net privacy rules
January 25, 2001
High-tech trade group unveils Net privacy principles
January 19, 2001

Voter.com to sell membership list
(The Industry Standard)
State attorneys general modify privacy stance
(The Industry Standard)
Senate approves limits on dot-com database sales
(IDG.net)
FTC workshop looks at key data privacy issues
(Computerworld)
Privacy companies aim to keep the Net anonymous
(ITWorld.com)
Conference scrutinizes privacy in the computer age
(PCWorld.com)
Congress starts scrutinizing online privacy
(PCWorld.com)
Congress readying privacy moves
(InfoWorld.com)

Voter.com

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.