Congressional Subcommittees Hold Consumer Data Privacy Hearing Featuring Testimony by FCC, FTC and NTIA

By Jim Smith On July 14, 2011, two Subcommittees of the House Energy and Commerce Committee – the Commerce, Manufacturing and Trade Subcommittee chaired by Rep. Mary Bono Mack (R-CA) and the Communications and Technology Subcommittee chaired by Rep. Greg Walden (R-OR) – held a joint hearing that the subcommittees said will “kick off a series on privacy issues to examine how information is collected, protected, and utilized in an increasingly interconnected online ecosystem.”The hearing featured testimony by FCC Chairman Julius Genachowski, Federal Trade Commission (FTC) Commissioner Edith Ramirez, and Assistant Secretary of Commerce Larry Strickling, the Administrator of the National Telecommunications and information Administration (NTIA). The hearing indicated significant interest in prospective online privacy legislation, with unusually strong participation by subcommittee Members including the Chairman of the full Committee, Fred Upton (R-MI), and ranking Democrat Henry Waxman (CA). Several Members noted their heightened consumer privacy concerns in the wake of the past week’s revelations of voicemail and e-mail hacking in Great Britain, and near unanimous interest in strengthening online protection for the privacy of children. The hearing did not deal directly with other pending privacy bills [discussed here, here, here, and here], but alluded to draft legislation by Rep. Bono Mack.  The federal agency witnesses generally presented a united front in support of legislation to bolster Internet consumer privacy protections and, especially, greater transparency in the privacy policies and uses of consumer data by website operators. The witnesses noted surveys showing that most consumers have little or no idea of the ways in which their private information and Internet activity are being utilized and disseminated by website operators and “data brokers,” and advocated up-front disclosures with opt-out opportunities before consumer information is used for behavioral advertising or other uses, such as the FTC’s “Do Not Track” proposal. They also pointed out gaps in their agencies’ current jurisdiction to oversee and police many types of online privacy practices (such as that the FTC lacks full authority over financial institutions, and that the FCC can reach telecommunications provider networks but not necessarily operating systems and applications providers). One area of mild disagreement between the FTC and FCC was the FTC’s view – not shared by FCC Chairman Genachowski – that the FTC can assert jurisdiction over the privacy practices of wireless carriers. While most of the participating Members of Congress and witnesses supported the need for some greater online consumer privacy safeguards, many also stressed that any legislation must strike a “smart balance” between privacy concerns and the objective of fostering rather than dampening continued investment and innovation in online services and digital media. The subcommittee chairs promised additional hearings on online privacy issues later this year.