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List Execs Doubt Privacy Legislation Will Pass

Though far-reaching federal privacy legislation could have a huge effect on the traditional list business, several list professionals are confident that such legislation won't be enacted this year, or perhaps ever.

“Obviously, everything would be dependent on how the legislation was worded,” said Patrick O'Hara, CEO/CIO of The List Group Inc., Boulder, CO. “Assuming it was worded in the worst-case scenario, where you would actually have to grant permission before anyone could send you any piece of direct mail, I think that would be catastrophic.”

Such an opt-in approach would cripple traditional mailers because their lists always have been maintained as opt-out files.

“Opt-in would be pretty difficult for offline direct marketers,” said Henry DiSciullo, executive vice president of list and insert services at Venture Direct Worldwide, New York. “Opt-in is great and is a wonderful way to set the standard, but if we really had to live by that standard, it would cost us in terms of marketing efficiencies.”

However, among the dozens of privacy bills introduced in the House of Representatives and Senate, it is unlikely such an extreme mandate would pass, O'Hara said.

At least one commissioner at the Federal Trade Commission voiced an even more sweeping opinion. On Aug. 20 at a new-economy conference organized by the Progress & Freedom Foundation, commissioner Orson Swindle told Reuters that he did not expect any privacy legislation to pass this year.

“My personal opinion is that the FTC will not be making a proposal that Congress enact [privacy] legislation,” he said in the Reuters article. “Secondly, I don't think Congress will move to legislate because I don't think you could get a consensus to do it.”

Swindle is just one of five FTC commissioners, and he is known to be pro-business and anti-legislation.

One privacy advocate and staunch supporter of privacy legislation downplayed Swindle's statements.

“Orson Swindle has been for years playing down the possibility of legislation and doing his best to divert it,” said Jason Catlett, president/CEO of Junkbusters Corp., Green Brook, NJ. “I don't think we can assume he's speaking for the chairman or that he's the voice of destiny.”

Despite the bills already circulating, Catlett said that a forthcoming bill from Sen. Ernest Hollings, D-SC, and the Senate Commerce Committee is more likely to pass. That bill has not been finalized.

DiSciullo also doubted that privacy legislation is likely to pass.

“I don't think that there will be a worst-case scenario,” he said.

Though the Internet has heightened privacy issues, he said, privacy threats are not as big as politicians make them appear.

Still, privacy concerns are unlikely to vanish.

“I don't think privacy is going to go away,” said Diana Arroyo, vice president of operations at Carney Direct Marketing, Irvine, CA. “I think just the intense heat around privacy is going to simmer a little bit as a result of everybody getting a little more comfortable. I think there will be ongoing concerns, but they will wane slowly but surely.”

Though list professionals may not be worried about far-reaching privacy legislation passing, they are concerned about the possible effect on their data sources.

“Privacy has had a big effect on the growth potential of the industry,” Arroyo said. “A lot of data dried up as a result of the intense focus on it.”

She cited the industry's loss of driver's license data this year as well as defunct Web merchants not being allowed to sell their customer data.

List professionals seem focused on self-regulation and lobbying as ways to stave off potentially crippling legislation.

“The more we self-regulate, the better off we are,” O'Hara said. “Fortunately, the direct marketing industry has some fairly substantial lobbying efforts.”

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