Privacy self-regulation efforts are working, senators told

The online industry doesn't need new privacy legislation because it is doing a good job of protecting users' privacy, an executive of an advertising trade group told U.S. lawmakers Thursday.

Even as Senator John "Jay" Rockefeller, chairman of the Senate Commerce, Science and Transportation Committee, promised to push for new privacy legislation, other senators and witnesses at a hearing questioned the need for new regulations.

Online advertising groups have made huge steps forward in privacy protection in recent years, Bob Liodice, president and CEO of the Association of National Advertisers, told the committee. In the past four years, the Digital Advertising Alliance, a nonprofit group with members including Liodice's association, has built a program that lets Web users opt out of online tracking by advertisers, he noted.

"Our self-regulatory system works," Liodice said. "We have results that few, if any can claim. We have built and implemented a system that is operating and effective."

Rockefeller, a West Virginia Democrat, questioned whether self-regulation was working. Consumers want more control over the way their information is used online, he said in a blog post before the hearing.

"I have learned that self-regulation is inherently one-sided, and that the interests of consumers are often sacrificed for the demands of the bottom line," he wrote. "Until consumers are adequately protected, I will continue to push for legislation, and hold hearings, to address this imbalance."

Rockefeller introduced an online do-not-track bill in May 2011. The bill has not moved forward since then.

Online companies' interest in protecting user privacy appears to pick up when there's pressure from the U.S. government and relax when lawmakers are focused on other issues, said Peter Swire, a law professor at Ohio State University. Swire, a former privacy adviser in U.S. President Bill Clinton's administration, questioned if self-regulation will work in the long term.

"The industry works a lot harder at this when government is paying attention," Swire said. In the early 2000s, when the U.S. government was focused on terrorism and other issues, "most of the self-regulatory organizations on privacy disappeared," he said.

Most Web users don't understand the current self-regulatory efforts, added Alex Fowler, global privacy and policy leader at Mozilla.

"The public is increasingly uneasy about the extent to which their online lives are invisibly profiled, analyzed, packaged, sold, and reused to personalize advertising, content and services," he said. "This unease leads many users to want to understand and control the collection and use of data about them."

Newer efforts at privacy self-regulation seem to be focused on involving more diverse groups, and could lead to good results, Fowler said. Regulation may be necessary in the future, however, he added.

Other senators and witnesses questioned the need for new privacy rules. The U.S. Federal Trade Commission already has the authority to take action against companies that violate their privacy policies, said Berin Szoka, president of TechFreedom, a free-market think tank.

The recent debate over online privacy "has systematically underestimated the benefits to consumers from the use of personal data to tailor advertising, develop new products, and conduct research, while overstating the dangers of data, which remain largely conjectural," Szoka said.

The Internet moves so fast that any privacy law passed by Congress may be "outdated by the time the ink dries," added Senator Kelly Ayote, a New Hampshire Republican. "This field is evolving so rapidly that we must proceed cautiously and carefully before diving into any regulation," she said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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