Direct marketers gathered their efforts last week to oppose privacy protections placed in the $49.5 billion Senate Transportation Appropriations Bill.
The bill – which was approved by the full House and Senate last week but had not yet been signed by President Clinton as of press time – mandates that states require drivers to give specific permission before their drivers’ license or motor vehicle registration data is released from state motor vehicle departments for any purpose except law enforcement.
The provision will have a devastating effect on the use of drivers’ information, which is used throughout the direct marketing industry. Only a few people would be expected to take the steps to allow their information in, and, as a result, there would be too few names to make a list worthwhile.
“Anyone and everyone who compiles information and sells it for direct marketing purposes just took a hit because the quality of names and addresses will be degraded,” said Michael Quaranta, director of government affairs at Experian, Orange, CA, whose company purchases DMV data and uses it to create lists for marketing purposes.
Jerry Cerasale, senior vice president of government affairs at the Direct Marketing Association, said the amendment erodes First Amendment, Commercial Free Speech and Freedom of Information of public records.
“The so-called ‘Shelby Amendment’ does a tremendous disservice to consumers and marketers alike, amounts to an attack on commercial free speech and completely dismisses the effective individual privacy protections in use by nearly all marketers in the private sector,” Cerasale said. “There is little in this provision about true privacy protection. Rather it is much more an attack on a successful, hugely accepted mode of commerce.”
While information on drivers – name, address, age, gender and vehicle identification number information – is used for many purposes, including allowing marketers to match their databases against the DMVs’ up-to-date databases or to use automotive data to match lifestyle data, its biggest use is for marketing auto-related products. That segment approached $50 billion last year, Cerasale said, much of which comes from information obtained from state DMVs. Last year, more than 7.7 million Americans ordered automotive accessories, he said, which creates jobs for thousands of people employed by marketers and manufacturers of those products.
“Those sales and the jobs that depend on them are seriously threatened,” he said.
Stephen R. Polk, chairman/CEO of R.L. Polk & Co., Southfield, MI, which licenses motor vehicle registration and title data to automobile manufacturers and dealers, said his clients will be most hurt by these changes.
“If the bill is passed, it will have a significant impact on the ability for these companies to communicate with car owners,” he said.
Industry leaders said the amendment, which was sponsored by Sen. Richard Shelby (R-AL), sets a dangerous precedent for government restriction of public access to information for legitimate purposes.
“While we are very concerned about what this provision will do to nonprofit direct marketers, we are more concerned about the ramifications of this bill for the whole direct marketing industry and the precedent it sets,” said Amy Gotwals, assistant director of the Alliance of Nonprofit Mailers, Alexandria, VA. “If Congress thinks opt-in is the answer and makes everything opt-in, it could be a very powerful and scary tool for Congress to have. Every time something crosses their desk where there is a concern of privacy, they may default to opt-in.”
Quaranta expects this to be the first of many battles because “privacy and policy are a toxic mix.”
“The marketing industry’s collection and use of this information is not very well known and poorly understood,” he said. “It’s up to the direct marketing industry to very aggressively promote the positive, beneficial uses of information and direct marketing. Clearly, that is not happening. The direct marketing industry is not responding in a satisfactory manner.”
Cerasale said it was unfair that the Shelby measure had no public hearings and is asking federal lawmakers to have a hearing. Industry leaders also are watching the U.S. Supreme Court, which will hear arguments Nov. 10 in a case, Reno vs. Condon, that will decide whether Congress has the authority to prohibit states from disclosing information that people submit to state motor vehicle departments.
If the court rules in favor of the states, Cerasale said, “then I think the Shelby amendment is on some pretty shaky ground.”