House Bill Seeks to Protect Net Users’ Privacy

From Bloomberg Business News

Companies that collect personal information from Internet users, including children, would have to tell them and give them a chance to stop the practice under a bill introduced in the House on Thursday.

Companies such as McDonald’s Corp. and Walt Disney Co. gather information about children and adults through their corporate sites on the World Wide Web, the multimedia portion of the Internet. Other companies track consumers’ travels on the Net, registering which sites they visit, whom they e-mail and how long they spend surfing.

The practice is a “hijacking of personal information” and a violation of privacy, said bill author Rep. Edward J. Markey (D-Mass.).

The legislation, introduced Thursday, is unlikely to pass in this Congress, in Markey’s own estimation, because of a tight legislative calendar.


If it eventually passes, it would not necessarily mandate regulation of the Internet.

Instead, it would require the Federal Communications Commission and Federal Trade Commission to determine if industry standards and practices exist or can be encouraged to protect consumers’ privacy. Regulations would be imposed only if those agencies find that “technological tools don’t exist” or if a particular industry “refuses to embrace this code of electronic ethics,” Markey said.

That code includes “basic rights,” Markey said: Consumers should be told if information is being gathered about them and if it’s going to be sold or reused, and should be given the right to keep a company from collecting such information.

Some corporate Web sites geared to kids, such as Disney’s and Grey Advertising Inc.'s sites, already include disclaimers. Disney’s warns that information gathered will be subject to “unrestricted commercial use,” whereas Grey’s merely tells children to ask for permission from their parents or teachers before entering information.

But privacy, consumer and children’s advocates, as well as 1st Amendment advocates, said that’s not enough. Consumers should have to actively approve the collection and use of such information, not just be informed, they said.

“They should be erring on the side of protecting kids and consumers,” said Bradley Stillman, telecommunications policy director for the Consumer Federation of America. “Most consumers would be incredibly shocked to see the information available about them.”

Web sites geared to gathering information about kids ask them their names, home and e-mail addresses, ages, the kind of computer equipment they have at home, their favorite Web sites, how they found them, their favorite CD-ROMs and favorite McDonald’s food and candy, for example.

The companies are using technology to “sneak corporate hands into a personal cookie jar and use this database to compile sophisticated, highly personal consumer profiles,” said Markey, the ranking minority member on the House Commerce Committee.


A Grey spokeswoman said that if Grey’s site is in violation of any law passed, it will willingly change it to comply. McDonald’s and Disney representatives were studying the bill and had no immediate comment.

Also unavailable for immediate comment on the legislation were representatives of America Online Inc., CompuServe Corp. and Netscape Communications Corp., all Internet-browser software companies.

First Amendment advocates hailed the introduction of the legislation. The Center for Democracy and Technology and the People for the American Way Action Fund said the bill “strikes the right balance” between protecting privacy and maintaining the freedom of the Internet.

“Voluntary standards and fair information practices by operators of sites on the Internet can obviate the need for regulation,” said Jill Lesser, the action fund’s director of public policy.


Markey said the regulation-as-a-last-resort approach of the legislation has drawn a “very broad coalition” of support, though he has not begun seeking co-sponsors or formal backing. Indeed, with the legislative calendar quickly closing, Markey suggested, his hope is that the industry take his bill as a warning of sorts.

“What I would like them to realize is that a very broad coalition of support is being established and they could very easily be more constrained” than they are today unless they comply with the legislation’s goals, he said.

The lawmaker cited his success in getting the V-chip legislation passed earlier this year, which requires television manufacturers to include a computer chip in TV sets to give parents the ability to block objectionable programming. Also significant, he said, was his collection of 220 signatures, a majority of the House, in support of a rule mandating that broadcasters air three hours a week of educational shows for children.