Has White House Pushed Privacy Debate Too Far?

While the U.S. business community has been punched black and blue lately over the collection and use of marketing data, people from both sides of the privacy issue contend that the White House's increasingly hostile tone toward business may be pushing the debate too far, too fast.

Even Marc Rotenberg, executive director of the Electronic Privacy Information Center, Washington, criticized the White House this week for turning privacy legislation vs. self-regulation into an all-or-nothing debate.

“A lot of the problems have been created by the way the White House has made this a 'self-regulation: [thumbs] up or down' [issue],” Rotenberg said.

In just the past two months:

* Vice President Al Gore called for an “Electronic Bill of Rights” saying that Americans should have the right to choose whether their personal information is disclosed.

* Federal Trade Commission chairman Robert Pitofsky called the results of a March sweep of 1,400 Web sites' privacy practices “disappointing” and said that just 14 percent of Web sites made “even a passable attempt” at publishing their information collection and use practices online.

* Ira Magaziner, President Clinton's senior adviser on the Internet, told attendees at the Royal Institute of International Affairs Conference in London that the United States would be willing to try Europe's more intrusive approach to regulating Internet commerce if the free-market approach fails.

* During opening remarks at a privacy summit late last month, Commerce Secretary William Daley warned companies doing business on the Internet to do a better job of protecting consumers' privacy or the government will step in. “I don't want to hear any griping or moaning if that happens,” he said.

One source who asked not to be identified likened the Commerce Department's summit to an inquisition in which industry representatives had to endure repeated grilling from a panel of privacy advocates. “I thought it should have been the other way around,” the source said.

In order to have something positive to tout at the privacy summit, a group of 50 or so leading companies, including AT&T, America Online and Microsoft Corp., announced they had formed an Online Privacy Alliance. The alliance pledged to better respect consumer privacy and give consumers a choice about how personal data could be used. The group says it is working on an enforcement policy.

But, according to Solveig Singleton, director of information studies at libertarian think tank the Cato Institute, Washington, efforts like the Online Privacy Alliance may tip the scales even further toward privacy legislation.

“In a sense, industry has done too much, too soon,” she said. “Once businesses start caving in to the activist movement, it looks like they are admitting that using customer information for marketing is immoral or wrong. If the public debate moves forward on [that] assumption, businesses will become hopelessly entangled in privacy red tape before they know what hit them.”

Singleton's advice to businesses who collect marketing data: “Don't let the other guy take the moral high ground.” Rotenberg added that while he thinks “baseline legislation” is necessary, he purposely avoids the word “regulation.”

“The goal we should all be focusing on is privacy protection,” he said. “Some of that requires legislation, some of that requires other stuff.”

So what then is the government's role?

Pat Faley, the Direct Marketing Association's vice president of ethics and consumer affairs, pointed out that privacy is not top-of-mind for many marketers, adding that the White House should mount a massive privacy-education campaign before it attempts legislation.

“A business's greatest incentive is to do what its customers want,” Faley said. “When we approach Web sites and explain the importance of posting a privacy policy, they do it. If the government would focus their efforts on communication and education, I think they would make tremendous progress.”

Singleton warned, however, that a government educational effort opens a new set of issues.

“When the government starts educating, the question always is, 'What are they going to say and what effect will it have on public expectations?' If the government says 'No one has the right to use your name without your permission' and that creates an expectation in the public which then is not met, it could lead to regulation further down the road,” she said.

This month, the Commerce Department and the Office of Management and Budget are scheduled to report to the White House their assessment of the 1-year-old policy of promoting self-regulation for Internet privacy.

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