Washington – Most lawmakers on Capitol Hill agree that advertising on the
Internet is necessary to keep the Web free. But just how much companies
should be allowed to cybersnoop in the name of e-commerce is at the heart
the Internet privacy debate.
Companies such as the Andover, Mass.- based Internet marketing firm Engage
can track what Internet users buy and read on-line, without the users ever
knowing. Engage stops short of finding out who the users are, or where they
live. But it doesn’t have to.
Some companies go the next step, linking computer habits with personal
information, possibly even learning credit card numbers.
That’s taking it too far, according to Rep. Edward Markey, D-Mass., a
ranking member of the House telecommunication subcommittee and co-founder of
the congressional privacy caucus. Markey said that consumers are lured into
giving their names and addresses to enter contests or register on a site
that then uses the information for other purposes.
I don’t think anyone knowingly makes that deal to give up their privacy
rights to get a gift certificate, he said.
Sen. John Kerry, D-Mass., is also at the center of the Internet privacy
issue. He’s concerned that too much government regulation of e-commerce
could imperil the flourishing high-tech industry.
Congress will never be light-footed enough to keep up with the technological
changes taking place in the online world, Kerry said in a recent floor
speech.
Markey plans in the next week to introduce the Internet privacy bill created
by the Federal Trade Commission, the national consumer protection agency.
After studying the issue he said he became aware, and then worried, about
how personal information can fall into the wrong hands over the Internet.
The congressman is pushing for a mandatory opt in, requiring sites to tell
consumers exactly how their information will be used and to get explicit
permission to collect it.
Kerry favors legislation requiring Internet sites to conspicuously post
their privacy policy, but lets those businesses decide what the policy
should be. As long as the company follows its stated policy, they would be
complying with the law.
Kerry doesn’t know specifically what harm could come to Massachusetts’
economy if Congress makes the wrong move and that’s just his point. No one
knows exactly how the new economy works, and he’s unwilling to take the risk
in his state, where 35 percent of the businesses are dot-coms.
Kerry, who has bought airplane tickets and holiday gifts online, pointed to
Engage as a potential model for industry self-regulation.
There are companies that think it’s useful to merge Internet information
with the off-line data you can get from a name and address, things like
credit card numbers. We think there are fundamental privacy issues with that
technique, Engage founder Dan Jaye said, who said he also thinks it’s
unnecessary for targeted marketing.
Marketing information is gathered through Click stream data a record of
every click a computer user makes. This information is gathered through
cookies files placed by some Web sites in users’ hard drives when they are
served ads or click on a site.
Each cookie contains a tracking number to identify the computer, not the
user. The company that sent the cookie can then read the click stream data
to determine, for example, what ads a user has been sent and what ads
garnered a response.
The question of online privacy became more pressing last year when Internet
advertising supplier DoubleClick announced plans to link personal
information like names and addresses to anonymous click-stream data.
The idea was to meld databases of online and off-line information could help
advertisers more effectively target consumers. The company has delayed its
plan and posts a policy on its site explaining personal information is used
only when permission is granted.
Engage operates on the premise that knowing how a person shops in stores
doesn’t translate into better marketing on the Internet, Jaye said.
Web business advocates say that opt-in requirements are unnecessary because
the industry is already making great strides in privacy protection. Two
years ago, close to 10 percent of all Web sites posted some type of privacy
policy. Today that number is close to 90 percent.
Some of the most prominent companies doing business online, including
America Online and Microsoft, recently announced voluntary guidelines on
Internet business that would include disclosure of privacy policies.
Some business advocates say strict regulations would hurt start-up companies
that need marketing data to build a customer base. Others argue no tracking
is necessary to help a business successfully reach its target audience.
