Senators Kerry, McCain Introduce Consumer Privacy Bill of Rights Bill

Senators John Kerry and John McCain jointly co-sponsored a privacy bill that would require companies to protect personal information they collect online and allow opt-outs.

Two prominent Senators introduced a bi-partisan Internet privacy bill to define some rules governing how Web companies can collect information about its users.

The 2011 Commercial Privacy Bill of Rights Act co-sponsored by Sen. John F Kerry of Massachusetts and Sen. John McCain of Arizona would force Web companies to clearly explain to their Internet users how they collect information and what they do with it. The "privacy bill of rights" introduced April 12 sought to give consumers greater control over their online data.

The bill, if passed, would make it harder for major Websites to target users using profiles based on personal data. Companies would be unable to collect or share personal identifying information, including names, email addresses and credit card numbers, without an individual's direct consent. Sensitive information such as religious affiliation, sexual identity and health would also be out of bounds without explicit consent.

"Consumers want to shop, browse and share information in an environment that is respectful of their personal information," McCain said at a news conference where the bill was announced.

The legislation is a framework that allows businesses to continue to advertise and market to consumers, McCain said. However, users must also have the ability to easily opt out of data collection so that their personal information is not shared with any third parties.

"Plenty of companies collect data and use it with high ethical standards," generating economic growth that "benefits all of us," Kerry said at the same news conference. But there are other companies who do "virtually anything they want," Kerry said.

Right now there is a "patchwork of standards" which makes online consumer privacy very confusing, Lisa Sotto, partner and head of the privacy & information management practice at New York-based Hunton & Williams, told eWEEK.

The joint McCain-Kerry bill does not mention the "do not track" mechanism that was recommended by the Federal Trade Commission in December. Kerry said he didn't think it was necessary to include it, but consumer advocacy groups including Consumer Watchdog, the Center for Digital Democracy, Consumer Action, Privacy Rights Clearinghouse and Privacy Times criticized that decision. In a joint statement, the groups withheld support of the measure because it did not require a "DNT" mechanism in Web browsers that would allow users to opt-out of all online tracking.

The groups also did not like the fact that consumers couldn't hold companies accountable for privacy violations. If the law is passed, private lawsuits, including class-action suits, against companies for those violations would be prohibited.

The bill has the backing of the Obama administration and it's both an "ambitious piece of legislation" and a "consensus version" that balances consumer needs and business interests, Sotto told eWEEK. "There's been a lot of behind-the-scenes discussion" to make the bill "palatable" to both sides so that it would pass, Sotto said, noting that the bill had undergone 11 revisions in draft form.

The proposed bill provides a co-regulatory framework that would allow the industry to partner with government to create flexible rules for businesses to reduce any negative impact on the Internet ecosystem, Daniel Castro, senior analyst with the Information Technology and Innovation Foundation, a Washington D.C.-based think-tank, told eWEEK.

"We are pleased to see this bill follows fair information practice principles and avoids technical mandates," Ed Black, president and CEO of Computer & Communications Association, told eWEEK. Tech companies understand that loss of privacy can have a chilling effect on online activity, Black said.

Intel, Cisco, eBay and Hewlett-Packard issued a joint statement commending the bill for being flexible to account for rapid changes in technology. "The bill also strikes the appropriate balance by providing businesses with the opportunity to enter into a robust self-regulatory program," the companies said.

Castro estimated the "Internet ecosystem" generated more than $300 billion in "annual economic activity" in the United States.

However, voice from the Web media sector sounded a negative note. The industry is "policing itself" and a government-enforced legislation was unnecessary and would be restrictive, Steve Minichini, president of interactive at media agency TargetCast, told eWEEK.

Similar legislation is currently making the rounds in the House of Representatives.