Attorney Questions DM Industry Praise of Data Bill

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A House privacy bill received several positive comments from direct marketers at a hearing yesterday, but one industry attorney thought praise of the legislation was unwarranted.

The bill's main components include equal treatment of online and offline data collection in regard to notice of what personally identifiable information is collected and used, as well as opt-out choice. The bill also preempts state laws, denies private rights of action and would be enforced by the Federal Trade Commission.

Rep. Cliff Stearns, R-FL, introduced H.R. 4678, known as The Consumer Privacy Protection Act of 2002, in May.

"Requiring mandatory notice for information collected offline would be a fundamental change in the way direct marketers have done business since direct marketing began," said advertising and privacy attorney D. Reed Freeman, Collier Shannon Scott PLLC. "It seems to me that when there's a law that could have a fundamental impact on an entire industry or several industries, it's not the time to stand up and applaud the bill, it's the time to worry about the bad things about the bill."

However, only one direct marketer acknowledged that point at yesterday's hearing before the commerce, trade and consumer protection subcommittee of the House Committee on Energy and Commerce.

Jennifer Barrett, chief privacy officer at Acxiom Corp., testified for her firm as well as fellow data providers Experian Marketing Services and Trilegiant Corp. She said that though it's difficult to argue different policies for offline and online data collection, differences in how notice and choice can be provided exist between the channels. She recommended allowing offline data collectors to provide notice and choice upon request through the mail, at a Web site, via telephone or at brick-and-mortar locations.

"In other words, businesses must have the flexibility to adopt practices that best meet the medium in which they are engaged, even though notice and choice about marketing information should be the policy in all mediums," Barrett said.

Otherwise, she praised the bill's preemption of state laws, enforcement methods and the lack of a mandatory access provision.

Paul Misener, vice president of global public policy, praised the bill's equality for online and offline data collection.

"Although we are not explicitly seeking privacy legislation," he said, " is, on behalf of our company and customers, proud to support H.R. 4678, which wisely and fairly addresses consumer information uniformly among all methods of collection; establishes a national system that avoids a hodgepodge of state and local rules; and employs the consistency and balance of a public enforcement mechanism."

Only one panelist represented the privacy advocate's view at the hearing.

"I think we need real privacy protection, but regrettably I don't think this is the bill that would do that," said Marc Rotenberg, executive director of the Electronic Privacy Information Center. He cited the lack of access provision and the denial of private rights of action as deficiencies of the bill.

Despite the praise and criticism voiced at the hearing, Freeman said, "It's extremely unlikely that there will be a privacy bill of general application that comes out of Congress this year."

Other participants in the hearing included Philip D. Servidea, vice president of government affairs at NCR; John Schall, executive director of National Business Coalition on E-Commerce and Privacy; John P. Palafoutas, senior vice president of domestic policy at AeA; and Rebecca Whitener, director of privacy services at EDS Security & Privacy Services.

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