Henk on 13 Mar 2001 15:51:08 -0000 |
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[Nettime-bold] High-tech titans put the squeeze on privacy regs |
-------------------------------------------------------------- This story was printed from ZDNN, located at http://www.zdnet.com/zdnn. -------------------------------------------------------------- High-tech titans put the squeeze on privacy regs By Ted Bridis, WSJ Interactive Edition March 13, 2001 5:15 AM PT URL: WASHINGTON -- A group of companies and industry organizations have quietly undertaken a campaign to nip Internet-privacy legislation in the bud. Aiming to halt the advance of dozens of privacy bills in Congress and in state legislatures across the country, the group Monday went public with four industry-funded studies asserting that privacy legislation would cost consumers billions of dollars annually. Led by the Online Privacy Alliance in Washington, the loosely organized campaign is attacking legislative proposals on three fronts: identifying expensive regulatory burdens, raising questions about how any U.S. Internet law would apply to non-Internet industries, and assuring lawmakers that privacy is best guarded by new technology, not new laws. Members of the Online Privacy Alliance include Microsoft, AOL Time Warner, IBM, AT&T, BellSouth and Sun Microsystems . These companies also have been working with the Direct Marketing Association and others. The DMA, based here, is the largest trade association for direct-mail and marketing companies. "I fundamentally object to carving out the Internet. Let's not single out and attack the medium," said Richard Purcell, director of privacy at Microsoft, who last week showed some lawmakers the company's privacy tools in its new Internet-browser software. Participants concede the campaign is largely pre-emptive, since none of the privacy bills pending in Congress have made significant headway. But they candidly express fears that any major privacy breach on the Internet could jump-start legislation. And the group members are increasingly concerned about the patchwork of state privacy laws passed amid broad public support for online-privacy protections. "There is a real fear that some politician riding his horse is going to say, 'I'm going to tell my constituents that I'm protecting their privacy,' " said Michael Turner of the Information Services Executive Council, which wrote one of the studies, which was published for the Direct Marketing Association. "These horror stories, these anecdotes, are really driving the issue." Support for protection, too Supporters of privacy-protection measures, however, contend lawmakers face enormous public pressure to move ahead, noting that some high-tech companies -- including Intel, Hewlett Packard and AOL--now favor modest protections and believe new laws may be inevitable. "This is not an issue on the radar screen. It is the radar screen," said Marc Rotenberg of the Electronic Privacy Information Center in Washington. "It's hard to imagine that Congress is not going to act on the privacy issue ... [but] I don't think anyone expected a bill to be flying to the floor at this point." The studies published Monday conclude that proposals to limit companies from sharing or selling customer information without permission would cost 90 of the largest financial institutions $17 billion a year of added expenses, and would result in a $1 billion "information tax" on consumers through costs tacked onto products from catalogs and Internet retailers. The studies also said tougher privacy rules would boost the risk of fraud and identity theft and restrict available consumer credit. Their argument: If an Internet retailer can't verify address information with a credit company, fraud becomes harder to police. Fred H. Cate, head of Indiana University's Information Law and Commerce Institute and a critic of new privacy laws, said the overall financial impact of privacy protections on all of the U.S. economy would be "in the trillions." At a news conference Monday, Cate took the lead role in introducing the reports' authors and fielding questions about their conclusions. The economists who wrote the reports said they didn't try to calculate any possible revenue increases from Internet transactions tied to greater consumer confidence. Public-opinion polls show many consumers are afraid to buy products online because of privacy and fraud concerns. The money spent to produce the four studies underscores the importance the industry attaches to the issue. Turner said his study, which examined catalog sales, cost $50,000. Another was funded with a $10,000 grant from the World Bank. The two other studies, funded by Ernst & Young LLP and the Tower Group consulting firm, each cost more than $50,000, but the firms declined to say exactly how much they spent. _______________________________________________ Nettime-bold mailing list Nettime-bold@nettime.org http://www.nettime.org/cgi-bin/mailman/listinfo/nettime-bold