Today, the Senate Committee on Commerce, Science, and Transportation held a hearing to seek the views of the Federal Trade Commission and the Administration on privacy issues. Discussion at the hearing, entitled “The Need for Privacy Protections: Perspectives from the Administration and the Federal Trade Commission,” focused in significant part on the privacy reports recently released by the FTC and the Administration.

Committee Chairman John D. (Jay) Rockefeller IV (D-WV) introduced the hearing by calling for “strong legal protections” and “simple and easy to understand rules” about information collection. He called for “strong, consumer-focused” privacy legislation this year, though conceded that no consensus about such legislation exists yet. Senator John Kerry (D-MA) also voiced support for privacy legislation. In contrast, Senator Pat Toomey (R-PA) expressed skepticism about new legislation, calling for a detailed cost/benefit analysis and identification of a specific market failure prior to any new regulation.

The hearing featured three speakers:

• FTC Chairman Jon Leibowitz briefly summarized the contents of the FTC’s recent report, which we have described previously.  He also reiterated the report’s call for security and breach notification legislation and legislation regarding “data brokers,” as well as its call for Congress to “consider” enact baseline privacy legislation.  He also praised industry strides toward a “meaningful” Do Not Track system, which he expects to be in place by the end of the year.
• U.S. Department of Commerce General Counsel Cameron Kerry addressed the claim by Senator Pat Toomey (R-PA) that a market failure justifying new regulation has not been identified.  Mr. Kerry stated that consumers’ lack of understanding of how their data is used and the misuse of such data by outlier businesses form market failures justifying baseline privacy legislation.  He summarized the Administration’s recent legislative recommendations, including its call to promote industry safe harbor codes of conduct.New
• FTC Commissioner Maureen K. Ohlhausen, who was not with the FTC at the time of the release of its privacy report, commended the FTC’s enforcement record.  She also praised the FTC report’s “privacy by design” principle and stated her support for data security legislation.  She expressed concern, however, that the report went too far in moving away from a tangible harm-based approach.  She also stated that if consumers are presented with a clear choice prior to information collection, it can be assumed that they will exercise that choice in an informed way.