Yesterday, the House Energy and Commerce Committee’s Subcommittee on Commerce, Manufacturing and Trade held a hearing titled “Internet Privacy: The Impact and Burden of EU Regulation.” The European Union’s Data Privacy Directive found few unalloyed supporters at Thursday’s hearing, the second in a series of hearings on Internet privacy, but the subcommittee’s leaders reaffirmed their desire to see some improvements in U.S. privacy practices. Click the jump to see a summary of key Representatives and witnesses’ statements.
- Rep. Mary Bono Mack (R-Cal.), the subcommittee chairwoman, said the EU directive had produced unintended negative consequences for consumers and businesses, and others at the hearing said EU privacy policies created too much uncertainty and stifled innovation. “From my perspective, there’s a sweet spot between too much regulation and no regulation at all,” she said. “My goal is to find that sweet spot.” Bono Mack mentioned the SAFE Data Act — which the subcommittee approved in July — as an example of the “smart ways to protect consumers and to allow e-commerce to continue to flourish.
- Rep. Cliff Stearns (R-Fla.), said Google, Facebook and Groupon were all products of U.S. innovation, and he questioned whether there was any demonstrable harm to consumers from being tracked online for the purpose of being served targeted ads.
- Rep. Pete Olson (R-Tex.) advocated a more “balanced,” sector-by-sector approach, rather than a heavier EU-style regime, particularly given the struggling U.S. economy.
- Rep. G. K. Butterfield (D-N.C.), the subcommittee’s ranking minority member and the only Democratic member in attendance, praised the EU for “recognizing the need for baseline privacy policies” and said the EU directive had succeeded in reducing the legal differences among EU countries, but he also said he hoped the hearing would reveal both the positives and negatives of the EU approach so the committee could move forward in a bipartisan manner.
- Nicole Lamb-Hale, Assistant Secretary of the International Trade Administration, said the U.S. should develop “malleable” baseline principles that would not promote particular technical solutions or supplant existing sector-based privacy laws. Lamb-Hale said establishing baseline principles in a single document would alleviate concerns among trading partners that the U.S. does not take privacy seriously, and thus would improve the global competitiveness of American companies.
- Catherine Tucker, a professor at MIT’s Sloan School of Management, testified about a study she conducted, which found that after the EU enacted its e-Privacy Directive in 2002, the effectiveness of online ads on European websites dropped 65%.
- Stuart Pratt, president of the Consumer Data Industry Association, said EU-style privacy regulations could seriously undermine the business models of popular websites that currently are free and rely on ad revenues. Such regulations also could hinder other businesses that use consumer data to manage risk and protect consumers, such as by providing reliable credit reports and affordable background checks.Pratt strongly opposed any proposal that would create a new umbrella authority similar to the data protection authorities in EU countries.
- Paula Bruening, Vice President for Global Policy at the Centre for Information Policy Leadership, a think-tank based at Hunton & Williams LLP, emphasized that privacy and data protection are values shared by the U.S. and Europe. However, the EU’s policies have not kept up with rapidly changing technology. She said a dynamic marketplace requires responsible but flexible protections.
- Peter Swire, a professor at Ohio State University’s Moritz College of Law and a former Clinton Administration official, said the biggest demonstrable harm of consumer tracking was the danger of consumer information being stolen or leaked. Swire said foreign concerns about privacy and data-security in the U.S. had already cost American companies business opportunities.
Some of the strongest supporters of an EU-style approach were not physically present at the hearing, but the Transatlantic Consumer Dialogue — a coalition of consumer groups — sent a letter to Bono Mack and Butterfield prior to the hearing, criticizing the subcommittee’s focus on the “burden” of the EU directive.