Commerce Committee Chairman's Privacy Bill Advances To Full Senate Vote, Opposed By Industry

Profession:Reed Smith Hall Dickler

On May 17, 2002, Senator Ernest Hollings (D-SC) managed to strike a deal that enabled him to get his controversial Online Personal Privacy Act [pdf format] approved by the committee he chairs, the Senate Commerce, Science and Transportation Committee. The deal reportedly struck involved Hollings' promise of support for the Can Spam bill [pdf format] sponsored by Senator Conrad Burns (D-MT), which was approved by the Committee just minutes after the near-party line vote on the Hollings bill

The Hollings bill displeases industry but isn't adored by all privacy advocates. It provides for special protection for information defined as sensitive, such as a consumer's social security number, their race, political party, etc. This sensitive information cannot be shared unless the consumer affirmatively "opts-in" and grants the company permission to share or sell the sensitive information. This upsets high tech companies and direct marketers. "The biggest problem is that giving people the option to opt-out is no longer good enough, said Jay Schwedelson, Corporate Vice President of Worldata/WebConnect. "It puts opt-in on the laundry list of things legislators can use." The bill also allows companies to share or sell less sensitive information, such as the consumer's name and address, unless the consumer expressly "opts-out." This bothers privacy advocates that feel it tacitly endorses such information swapping. Privacy advocate Kevin McGuiness of NetCoalition opposes the bill, saying "The regulatory record keeping burden mandated here is phenomenal."

But it is industry that hates the bill most, primarily because it permits consumers to sue companies that mishandle their personal data. Jim Pitts with the Financial Services Coordinating Council said, "The right-to-sue provisions in (the Hollings bill) would open the floodgates to a tide of frivolous lawsuits that would curb e-commerce and result in consumers paying more for...

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