Says Balanced Approach, Uniform Standards, Can Build Consumer Confidence 
& Boost Internet’s Growth

Addressing the involvement of state governments in online privacy, AeA’s President and CEO William T. Archey noted that federal preemption legislation "should play a crucial role in ensuring consistency and certainty" to the marketplace. "Only the federal government is in a position to create uniform U.S. privacy standards and work for international harmonization. Otherwise, online business could face 50 conflicting sets of privacy rules. Consumers and businesses alike would lose," he explained. "Federal legislation should not, however, attempt to replace or impede constructive private sector efforts, but rather build upon the baseline that they have laid down," he also stressed.

Praising industry’s online privacy efforts, Archey noted that the private sector has already made "substantial progress in implementing online privacy policies and technologies that empower consumers with notice, choice, data security and access. Certainly, we should build upon and not undermine the progress made so far through these efforts."

He continued: "Federal preemption legislation should protect consumers without imposing burdensome, impractical new requirements. Poorly crafted legislation will translate into higher consumer costs, fewer online services, and less free content -- thus hurting the same consumers such legislation intends to benefit. It is important to keep the Internet open and allow consumers to enjoy the full benefits of the new economy’s innovations."

Archey underscored the "enormously high" stakes involving online privacy: "The Internet and e-commerce have helped transform our economy into a prosperous New Economy. They are, and can continue to be, the nation’s high-octane engines of economic growth, productivity improvement and high-wage job-creation. However, the issue of online privacy is incredibly complex and does not lend itself to simplistic and premature legislative solutions. While we are encouraged to see that legislators from both parties are beginning to examine the impact of such regulation on the Internet economy, more education among policy makers needs to be undertaken to fully understand the impact of legislation and to avoid any unintended consequences that may follow."

AeA’s Archey noted that "all of us – lawmakers, business and consumers—need to learn more about online privacy and how we all can work together to protect it." To help advance that goal, he announced that later this year AeA will expand its educational efforts for business by holding online privacy seminars nationwide for its member companies. (It held similar seminars in California last year.) AeA member companies will also schedule briefings for national and state policymakers to showcase new privacy-protecting technologies. And AeA, in conjunction with its member companies, will publish a free consumer guide to privacy protection sometime in mid-2001.

• Provide Individuals with Notice

Web sites that collect personally identifiable information should provide individuals with clear and conspicuous notice of their information practices at the time of information collection. Individuals should be notified as to what type of information is collected about them, how the information will be used, and whether the information will be transferred to unrelated third parties.

• Ensure Consumer Choice

Consumers should have the opportunity to opt out of the use or disclosure of their personally identifiable information for purposes that are unrelated to the purpose for which it was originally collected. Consumers should be allowed to receive benefits and services from vendors in exchange for the use of information. It is important that the consumer understands this use and be able to make an informed choice to provide information in return for the benefit received.

• Leverage Market Solutions

Private sector privacy codes and seal programs are an effective means of protecting individuals’ privacy. Lawmakers should recognize and build upon the self-regulatory mechanisms the private sector has put in place and continues to build. These mechanisms are backed by the enforcement authority of the Federal Trade Commission and state attorneys general. Public policies also should allow organizations to implement fair information practices flexibly across different mediums and encourage innovation and privacy enhancing technologies.

• Ensure National Standards

The Internet is a new and powerful tool of interstate commerce. Public policies related to Internet privacy should be national in scope, thus avoiding a patchwork of state and local mandates. This uniform framework will promote the growth of interstate e-commerce, minimize compliance burdens, sustain a national marketplace and make it easier for consumers to protect their privacy.

• Protect Consumers in the Public and Private Arena

Government and non-profit organizations collect a tremendous amount of personally identifiable information about citizens. The need to foster consumer confidence applies to private and public sector activities. Government agencies and non-profit organizations that collect personally identifiable information should be required to follow fair information practices imposed on the private sector by law or regulation.

• Don’t Discriminate Against the Internet

Consumers should have confidence that their privacy will be respected regardless of the medium used. Similar privacy principles should apply online and offline. Public policy should not discriminate against electronic commerce by placing unique regulatory burdens on Internet-based activities.

• Utilize Existing Enforcement Authority

With the imposition of notice requirements, the Federal Trade Commission should use its existing authority to enforce the mandates of federal legislation. Legislation should not create any new private rights of action.

• Avoid Conflicting or Duplicative Standards

In cases where more than one government agency seeks to regulate the privacy practices of a particular organization or industry, those agencies should offer a single coordinated set of standards.