[DeMint] asserts that market pressures will spur online businesses to develop good privacy practices. "It would be my assumption that the businesses represented at the table have a lot of incentives to compete for best privacy policies."
According to Saul Hansell's article in yesterday's New York Times, DeMint added to this: "By the time the F.T.C. acts, the industry would be far ahead."
Luckily, (at least some of) the other participating Senators weren't buying it. As Davis writes, Sen. Byron Dorgan (D-N.D.), who presided over the hearing, called DeMint out on his free market logic, stating that "if market forces alone were sufficient to protect consumers, there would be no need for the Food and Drug Administration to conduct inspections, because companies that sold spoiled products would simply go out of business." According to Teinowitz, Dorgan did praise behavioral tracking as "helpful", but also expressed concern that the practice was "like someone following you around from store to store, taking notes on what you do." The Senator was quoted saying:
"There are legitimate questions raised about our traveling over the internet and who watches us and how that information gets used. We need to understand much more about that. I would hope that every consumer, when traveling on the internet, would understand what kind of information trail they leave and who might want to use it."
Some of the strongest statements came from Sen. Bill Nelson (D-Fla), who is a member of the Senate Intelligence Committee and helped draft the Foreign Intelligence Surveillance Act (FISA) bill that is also currently under Senate consideration. He compared the concerns raised by behavioral tracking to those the government has encountered in relation to wiretapping and other Big Brother-type activities. As Nelson described (quoted by Teinowitz):
"What I am struck with is that we [have] a similar issue here. I use the internet to go online to read the newspapers back home. If suddenly the kinds of articles I am reading ... are going to be identified with me so someone can target advertising, I'm going to question the underlying basis of this. In our discussion of snooping of terrorists, we carved out an exception that we don't want the government to go and examine what books we are reading at the local library. Well right here, we have the question of whether we are going to allow other people within the private sector examine the same thing and then use it for a commercial advantage."
It's always surprising how resistant people are to government surveillance and yet so many are also completely open to commercial surveillance. I'm glad Nelson brought it up (though his statements really make me want to go into the FISA hearings and see what position he's taken over in that context).
Of course, the hearing was also attended by industry types (well, their lawyers, anyway) and representatives from the FTC, who contributed their own comments and arguments...some of which I found quite surprising. The big "twist" was that several of the big Internet companies actually sided with privacy advocates on introducing a new privacy law, whereas the FTC promoted self-regulation. Weird! As Hansell writes,
Privacy lawyers working for both Google and Yahoo both endorsed the idea of some kind of legislation. So did — predictably — Leslie Harris, the chief executive of the Center for Democracy and Technology, an activist group.
"Google supports the passage of a comprehensive privacy law that would establish a uniform framework for privacy and procedures to punish bad actors," said Jane Horvath, a senior privacy counsel for Google. Mike Hintze, an associate general counsel of Microsoft, said much the same thing.
On the other hand, Lydia Parnes - director of the FTC's bureau of consumer protection - denied the need for new legislation, and again defended the FTC's 2007 proposal to strengthen industry self-regulation...a proposal that was, unsurprisingly, endorsed by the Interactive Advertising Bureau. Parnes stated (as quoted by Hansell):
The commission is cautiously optimistic that the privacy issues raised by online behavioral advertising can be effectively addressed through self-regulation."
At the same time, however, the FTC is still unwilling to give a timeline or say when a final version of their plan will be made available. Hmmm.
For more info, I recommend checking out the Center for Democracy and Technology website. Oddly, I haven't found all that much coverage of the hearing outside of industry publications, but expect that more will surface over the next couple of days.