Corporate Privacy: Disunited Front
Even as corporate foes of federal privacy regulation champion the release of new data detailing the lofty cost of such rules to businesses and consumers, behind the scenes the industry remains as fractured as ever on the issue.
The divisions are apparent even within the Online Privacy Alliance, a coalition of 80 leading corporations aimed at promoting privacy sensitivity within industry and encouraging self-regulation. The organization has not taken a position about whether Congress should write privacy regulations but many of its members have.
America Online, Hewlett-Packard and Intel advocate baseline privacy rules; others, like database giant Experian Information Solutions, oppose federal legislation. Microsoft is calling for Congress to at least put on the brakes and examine the issue closely before acting. All of these companies, except HP, belong to the OPA.
The Direct Marketing Association, The Financial Services Roundtable, TowerGroup and The World Bank Group, in conjunction with the OPA, released four studies last week. One stated that the cost of limiting the sharing of consumer information could cost 90 institutions $17 billion per year and lead to a $1 billion information tax on consumers.
But Scott Cooper, manager of technology policy at HP, said that while costs to industry are an important part of the debate, he was skeptical of the authority of the recent studies. Among other things, they failed to address the cost of consumer fear on e-commerce. Cementing consumer trust, he said, is central to HPs push for privacy legislation.
Meanwhile, a privacy workshop held by the Federal Trade Commission last week demonstrated just how dependent the credit and retail industrial sectors are upon the free flow of consumer information.
The FTC workshop was "a watershed moment for the industry," said Tony Hadley, director of government affairs at Experian. "It for the first time let the direct marketing industry lay out what information we collect, why we collect it and how we use it to benefit consumers."