The House Energy and Commerce Committee’s Subcommittee on Commerce, Manufacturing and Trade held the latest in its series of hearings on Internet privacy Wednesday morning. The hearing — titled “Protecting Children’s Privacy in an Electronic World” — focused on the Federal Trade Commission’s proposed updates to the regulations implementing the Children’s Online Privacy Protection Act (COPPA), which generally bars website operators from collecting or disclosing personal information from children under 13 without first obtaining parental consent. Lawmakers and witnesses also discussed whether Congress should enact additional legislation, particularly to protect teenagers. Click the jump to see a summary of some of the key issues addressed at the hearing and in witness’ prepared statements.

Proposed updates to the FTC’s COPPA Rule:

Subcommittee members and witnesses said the FTC has done a good job protecting children while remaining sensitive to website operators’ needs.

  • Subcommittee Chairwoman Mary Bono Mack (R-Calif.) said the Commission proposals hit the “sweet spot,” and she said the FTC was right to take a “go-slow” approach to the question of whether to extend COPPA or other privacy protections to cover teenagers. Ranking Member G. K. Butterfield (D-N.C.) also supported the FTC proposals and said many of the ideas should be incorporated into baseline privacy protections for people of all ages.
  • Dr. Kathryn Montgomery, a professor at American University’s School of Communication and a proponent of the original COPPA legislation, said the FTC proposals are a sensible way to address many of the problems raised by technological changes such as the development of sophisticated tracking techniques and the dramatic rise of mobile-phone use among children. She praised the FTC’s proposed rules for explicitly covering geolocation information and mobile applications.

Some lawmakers and witnesses, although echoing the general praise for the Commission proposal, had concerns about particular elements.

  • Rep. Bono Mack asked whether a total ban on targeted advertisements to children — or requiring opt-in parental consent under COPPA for such tracking — would prevent online service operators from earning enough money to continue creating quality content for children. Reps. Gregg Harper (R-Miss.) and Pete Olson (R-Tex.) also questioned whether such limits are necessary and whether there is evidence companies actually are directing behavioral ads at children. Mary Koelbel Engle, associate director of the FTC’s Division of Advertising Practices, and Alan Simpson, vice president of policy for Common Sense Media, cited widespread reports — including an article in the Wall Street Journal — of websites tracking children online. Montgomery said that although there would be a trade-off to banning such tracking, it is important to guard against particularly manipulative ads targeted at very young children. But that would not require banning all marketing or contextual ads, Montgomery said.
  • Hemanshu Nigam, CEO of consulting firm SSP Blue and former chief security officer for News Corp. and MySpace, urged lawmakers and regulators to carefully consider whether each individual change responds to an actual problem that cannot be addressed under existing regulations. He argued online services have strong business incentives to avoid violating children’s privacy and predicted that, if all the FTC’s proposed changes are adopted, large companies would withdraw from areas of increased uncertainty and small companies would have more difficulty winning venture capital in the short term.
  • Morgan Reed, executive director of the Association for Competitive Technology, said the FTC’s proposed revisions made “great strides” in updating COPPA but still left small mobile-application developers facing excessive compliance costs. He was especially concerned about the FTC’s proposal to eliminate the “e-mail plus” method of obtaining parental consent. Engle said the FTC always intended that the less-reliable e-mail plus method would be available only temporarily, and that the Commission decided to eliminate e-mail plus after concluding its availability may have discouraged website operators from developing better methods. But Reed called immediate elimination of e‑mail plus a “Hail Mary” and argued the rule should at least provide for a longer phase-out period.
  • Rep. Edolphus Towns (D-N.Y.) said members of the faith-based community told him they were unaware that the FTC was reviewing the COPPA rules, and Towns urged the FTC to reach out to religious communities.

Need for additional protections:

Much of the discussion at the hearing centered on whether teenagers need privacy protections and, if so, how those protections should be implemented.

  • Reps. Joe Barton (R-Tex.) and Edward Markey (D-Mass.) both spoke at the hearing in favor of their proposed “Do Not Track Kids Act.” Among other provisions, the bill would explicitly extend COPPA to cover mobile applications, impose some COPPA-like restrictions (though not a parental-consent requirement) on the collection of personal information from children between 13 and 17, prohibit the collection of personal information for the purpose of targeting ads to minors, and require online-service operators to develop an “eraser button” allowing users to delete personal information about minors maintained by the service. Rep. Barton said older children need privacy protections and that existing protections need to be extended to explicitly cover mobile applications.
  • The FTC’s Engle, in response to a question from Rep. Barton, said the FTC was considering teens’ interests as part of its broader review of online privacy and that some of the ideas offered in that review — such as requiring sites to provide clearer notices at the point where companies collect personal information — also would benefit teens. Engle said the FTC had not come to any conclusions on what special protections teens might need and that the Commission had no position yet on whether it would oppose measures such as the Do Not Track Kids bill.
  • Other witnesses were split on whether measures like Do Not Track Kids were desirable or even feasible. Montgomery and Simpson voiced their support for Do Not Track Kids, arguing that the bill would empower teens and that current industry self-regulatory efforts are insufficient. In contrast, Stephen Balkam, CEO of the Family Online Safety Institute, said some of the bill’s provisions — especially the “eraser button” requirement — would be technologically unworkable and potentially an unconstitutional invasion of teens’ First Amendment rights, especially if the bill allows parents to take down material posted online by older teens.

The subcommittee has scheduled its next privacy hearing — titled “Understanding Consumer Attitudes About Privacy” — for Oct. 13 at 9 a.m.