High-Tech Warms Up to Privacy Regs

Fearing a slew of Internet privacy bills from state governments responding to a public outcry over the issue, a group of high-tech giants are warming up to the prospect of federal legislation, if they are given a big enough stake in the process.

Hewlett-Packard Co. and Intel Corp. are among companies getting out front on the new position, which represents a dramatic reversal of the industry's overall strategy so far of avoiding new privacy legislation at all costs.

"The role of legislation containing a minimum set of requirements that serves to establish the right boundaries would then set the people free. It would create a way to recognize the fact that a consumer's [personal] information is theirs," said Carly Fiorina, CEO of Palo Alto, Calif.-based Hewlett-Packard.

Fiorina's remarks came last week at a technology policy summit sponsored by the Progress & Freedom Foundation (PFF), in Washington.

Such a change of heart may signal resignation by the industry that regulation is inevitable. To some it also marks the industry's attempt to keep things manageable by backing legislation from one source: the federal government.

"When states get more involved, it could be death by 50 cuts," said Jerry Berman, executive director of the Center for Democracy and Technology, a Washington privacy advocacy group.

Many feel that state legislation brewing in California and several other states would also bog down the efforts of federal lawmakers to come up with national guidelines.

Officials at Santa Clara, Calif.-based Intel said the company has been talking internally for months about getting behind certain lawmakers on a privacy bill.

But the prospect of a flurry of new privacy bills pouring out of state houses has put some immediacy behind the effort, said Michael Maibach, Intel's vice president of governmental affairs.

"Our view is that a new law, worded correctly, that offers consumers choice and control over the information used about them" would not be a bad idea, Maibach said.

Other companies, such as IBM Corp., argue that federal privacy legislation at this point is premature.

"We in [the high-tech] industry know there needs to be more progress, and industry is willing to take the lead in this effort. To the idea of legislation, we say, 'yeah, at some point.' But we don't know what that legislation should look like right now," said Harriet Pearson, director of public affairs who leads IBM's work on privacy issues, in Armonk, N.Y.

Even some government officials said that companies now amenable to legislation were relinquishing too soon. "We hear that there are some who are ready to jump into bed with the regulators," said U.S. Federal Trade Commission member Orson Swindle. "My words of wisdom are, 'Don't yield on this right now.' " Swindle publicly disagreed with the FTC-sponsored privacy legislation introduced last May.

That legislation, introduced on behalf of the FTC by Sen. Ernest Hollings, D-S.C., would forbid companies from collecting personally identifiable information without providing "clear and conspicuous" notice about how that data would be shared or disclosed.

Rep. Asa Hutchinson, R-Ark., who has introduced separate privacy legislation that would establish a commission to study the issue deeply before legislation could be passed, said the industry is sending conflicting signals to lawmakers.

Hutchinson said he initially got positive feedback from the industry. But that support was sprinkled with feedback from companies reluctant to have Congress proceed at all on privacy, he said.

"The high-tech industry has given a mixed signal on the commission bill. Many have said it is a good idea, and that's the way to go. But then you have others saying, 'But we really don't want to do anything at all,' " said Hutchinson, also speaking at the PFF Summit last week.

Hutchinson and others are increasingly invoking the threat of multiple state privacy bills to get the industry to back federal legislation.

Among other complications caused by state involvement is the requirement that federal lawmakers preempt that state legislation when a federal bill is finally passed.

Privacy weighs on users' minds, study saysU.S. citizens are increasingly worried about their privacy while surfing online and would like Internet privacy guarantees, even though they are currently doing little themselves to protect their Internet identities, according to a study released last week by the nonprofit Pew Internet & American Life Project, in Washington.

The survey, conducted from May 19 to June 21, asked 2,117 Americans -- 1,017 of whom are Internet users -- their views on trust and privacy online, the organization said.

Although 60 percent of those polled were "very concerned" about protecting their privacy online, only a limited number of those people used tools available for protecting their online identity. When it came to the fairly simple option of providing false information to Web sites, such as incorrect names, only 24 percent of those polled said they had done soOf those polled, 56 percent did not know that cookies are the primary online tracking tool, and only 10 percent had set their browsers to reject cookies.

Furthermore, just 9 percent have used encryption to scramble their e-mail and 5 percent have taken advantage of "anonymizing" software, which hides a computer's identity from Web sites.

The study found that users would like the option of giving a Web site personal information, and 71 percent said that people who use Web sites should have the most say over how Internet companies track users' activities.

Eighty-one percent felt that rules should be put in place to govern tracking personal information online, but those same people were divided on who would do the best job of enforcing those rules. Of the U.S. citizens already online, 50 percent thought that Internet users themselves would do the best policing job, 24 percent thought the federal government would do the best job, and 18 percent believed Internet companies could best handle the job of policing themselves.

Laura Rohde is a London-based correspondent for the IDG News Service, an InfoWorld affiliate

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