Wednesday, February 22, 2012

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Internet Privacy Bills Unlikely to Move in 2012, But Chances Better for Cybersecurity Legislation

By Alexei Alexis

Online privacy is expected to remain a hot topic in 2012, but it is unlikely that Congress will enact any major reforms in such a complex and unsettled area during an election year, observers tell Bloomberg BNA.

Privacy is expected to be an ongoing focus of congressional hearings with the Senate Commerce, Science, and Transportation Committee and the House Energy and Commerce Committee in particular weighing the need to protect consumers’ online personal data. While privacy bills are pending before both panels, and the Obama administration is finalizing its own proposal, key Republicans remain concerned about the potential impact on the business community.

“Short of a cataclysmic privacy event, I don’t see a comprehensive bill passing in 2012,” Lisa Sotto, head of the privacy and information management practice at Hunton & Williams, told Bloomberg BNA. “I do think we will see continued discussions that will build momentum toward passage of such legislation in a few years.”

For now, Sotto said, companies can expect the Federal Trade Commission to remain active on enforcement: “There’s no question that the FTC will continue to be active and probably step up formal enforcement activities.”

Behavioral Ad Legislation Momentum Waning?

Top committee Democrats have called for legislative action to address key privacy concerns, such as tracking of consumers’ web-surfing habits for behavioral advertising.

But Sen. Pat Toomey (R-Pa.), ranking member of the Senate Commerce Subcommittee on Consumer Protection, Product Safety, and Insurance, told Bloomberg BNA that he would like more information on the issue before deciding whether a legislative solution is necessary. “I think that we need to be very, very careful about how we proceed in this area, because there are so many applications and online services that require information, and consumers want and value these services.”

Dan Jaffe, executive vice president of government relations at the Association of National Advertisers, said industry has made progress toward convincing lawmakers that self-regulation can effectively address privacy concerns over behavioral advertising. “We’re hopeful that self-regulation, not regulation, will continue to be the focus in 2012,” he said.

Mike Zaneis, a senior vice president and general counsel for the Interactive Advertising Bureau, another trade group involved in the industry-wide effort, said that the prospects for legislative action on targeted ads have receded significantly over the last six months and will likely continue to diminish into the new year.

Zaneis said that “with industry self-regulation beginning to succeed, there’s less pressure to move legislation. I don’t see any part of this dynamic changing in 2012.”

Early in 2011, the Senate Commerce Committee launched a series of oversight hearings on privacy. In May 2011, Sen. John D. Rockefeller IV (D-W.Va.), the panel’s chairman, introduced a “do-not-track” bill (S. 913) that would make it easier for consumers to avoid having their online activities followed by companies. Since then, however, he has not announced any specific markup plans.

Asked about Rockefeller’s position going into 2012, a committee spokesman said: “Consumers are still without sufficient safeguards to protect their privacy online. They need easy-to-use mechanisms, such as an opt-out option, when surfing their favorite websites. Ultimately, the Chairman believes that consumer privacy is a right, not a luxury, and that legislation is needed to empower consumers to protect their personal information from companies surreptitiously collecting and using that personal information for profit.”

However, the spokesman said it was too early to discuss specific committee plans for the new year.

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