House means to act on Web issues

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The chairman of an influential House of Representatives committee late last month delivered a not-at-all-subtle warning to marketers about Internet privacy legislation.

U.S. Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee, said legislation is coming this year, although an aide declined to hint at what direction it may take. "Punting might be good in football, but this committee is finished with punting," said Rep. Tauzin, speaking at the first hearing organized by the committee's panel on Commerce, Trade and Consumer Protection. The comment referred to the House's failure to act on privacy last year.

"The last thing we should do is turn this [question] over to regulators." Congress, he believes, shouldn't simply leave the matter up to the Federal Trade Commission or state attorneys general.

Rep. Tauzin's comments came as the FTC moves forward on privacy regulation, scheduling an all-day workshop March 13 examining marketers' profiling of consumers on and offline.

Mr. Tauzin, who earlier had indicated that privacy was one of the issues he hoped to deal with this year, said his recent talks with companies in Silicon Valley convinced him marketers are now ready to accept Congressional action. "There was a different attitude there," he said. "They said `You better do something because if you don't we will have 50 states acting."'

At the hearing, subcommittee Chairman Cliff Stearns, R-Fla., put privacy and e-commerce issues above other consumer protection issues as his priority for the year, listing such items as tire and care safety behind privacy in importance.

Despite their agreement that legislation was necessary, neither Rep. Tauzin nor Rep. Stearns offered any plan for what they would support and Rep. Stearns said he wants his panel to clearly hear about some of the problems and issues before acting.

Witnesses at the hearing offered conflicting views of the need for legislation. Paul H. Rubin, a professor of economics speaking for the Progress & Freedom Foundation, said that despite scare stories, the case for new regulation is "weak" and there has been little evidence of harm. Marc Rotenberg, executive director of the Electronic Privacy Information Center, however, said Congress has never waited for harm to occur before setting standards for new electronic media, adding that the public concern about privacy is being fueled by a lack of Congressional action.

While the House panel looked at general privacy issues, an ad hoc Congressional Privacy Task Force headed by Sen. Richard Shelby, R-Ala., saw demonstrations of some issues raised by certain kinds of "web bugs" that allow marketers to invisibly create profiles, track individuals and sometimes even to access hard drive information without knowledge of consumers.

Gary Clayton, CEO of the Privacy Council, said five different kinds of Web bugs can do things as innocuous as anonymously count distinct viewers to, more nefariously, provide address books or information on local files, all without a person being aware of the tracking. He and Richard Smith, chief privacy officer for the Privacy Foundation, said marketers have failed to disclose the use of the bugs.

Christine Varney, a former Federal Trade Commission commissioner who is now an adviser to the Online Privacy Alliance, urged the commission to focus on wrong uses of the technologies, not the technologies themselves.

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