Information Age privacy challenge

The advent of digital technology and the Internet has revolutionized the way we communicate, do business, and educate and entertain ourselves. It also has raised certain privacy challenges. The more we live online, the more information about us becomes publicly available. This has positive, as well as some potentially negative, implications.

Although not an acolyte of Ayn Rand, I find the following observation by her pertinent: “Civilization is the progress toward a society of privacy. The savage’s whole existence is public, ruled by the laws of his tribe. Civilization is the process of setting man free from men.”

{mosads}I have a long track record on privacy issues. When I was chairman of the Commerce, Trade, and Consumer Protection Subcommittee, I held the most extensive congressional hearings to date on privacy.

Following these hearings, I introduced the Consumer Privacy Protection Act. This bill would have required data collectors to provide consumers with information on the entity collecting the information and the purposes for which the information was being collected.

Furthermore, in 2005, I held two hearings on identity theft and security breaches involving personal information. These hearings led me to introduce the Data Accountability and Trust Act, which would have required any entity that experiences a breach of security, such as a business, to notify all those in the United States whose information was acquired by an unauthorized person as a result of the breach.

Much of the current debate centers on tailored Internet advertising. Broadband providers and Web-based companies such as Yahoo! and Google now have the ability to customize the ads we see on the Internet based on our Web activity, such as the sites we visit, the content we view, the search queries we enter, the ads we click on and the products we buy online.

Total annual Internet advertising revenue reached $23 billion by the end of 2008, according to a joint report by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers. While just in its infancy, the IAB estimates that targeted Internet advertising will generate more than $1 billion in revenue by the end of 2009.

The phone and cable companies have said they will not get into the tailored Internet advertising business until policymakers have provided more guidance on what the regulatory landscape for such advertising will look like. Yahoo!, Google, and Google subsidiary DoubleClick — which collectively control about 90 percent of the search advertising market, according to the Department of Justice — have already begun to tailor Internet advertising.

{mosads}On the one hand, tailored Internet advertising will help ensure that the ads consumers see are more relevant to them. It will also provide valuable information upon which to market products and services, that will help small and large businesses alike in this difficult economy.

Perhaps most importantly, Internet advertising-supported business models can help keep Internet content and services cheap or even free for consumers. The alternative would be to raise rates or drop the services and content altogether. Neither result is good for consumers.

On the other hand, the thought that companies are building consumer profiles based on Internet activity makes some people understandably uneasy. What information is being collected? What will it be used for? How will consumers be made aware, and will they be given an opportunity to prevent the data from being collected?

The first thing to do is determine whether the collection of data on consumers’ Internet use is harming consumers. If we regulate this practice without first determining the extent to which it poses a real threat to privacy, we run the risk of creating overly burdensome requirements when a simpler approach might be more appropriate.

The last thing we want to do is prematurely restrict the latest technological advancement related to online marketing. Overreaching privacy regulation — particularly in the absence of significant consumer harm — could also have a significant, negative economic impact at a time that many businesses in our economy are struggling.

As we consider privacy legislation, we must empower consumers to make their own privacy-related decisions. That means companies should be as transparent as possible about what information they collect and how they use it.

Only the consumer knows how he or she feels about the information being collected, the parties doing the collecting, and the purpose for which the information will be used. Neither the companies nor Congress should make that decision for them.

We need to place the control over consumer information with the actual consumer. We will not truly address the privacy implications of tailored Internet advertising unless we shift the discussion toward consumer-centric approaches and away from superficial characteristics of the companies, like the particular technology they use or their corporate structure.

And whatever we do, we must apply the same privacy standards to companies collecting the same type of information for the same type of purposes, whether it is a phone company, a cable company, or companies like Yahoo! and Google.

Consumers care how their privacy has been invaded, but more importantly, consumers want to know what information is collected and how it is being used.

Stearns is ranking member of the House Subcommittee on Communications, Technology and the Internet.