FTC Commissioner Predicts the Next Congress Will Pass an Online Privacy Bill

(June 27, 2000) FTC Commissioner Swindle predicted at a forum in Washington DC that the next Congress will pass an online privacy bill. He also stated that privacy advocates are demagoging the issue, and consumers will rue the day when privacy legislation is passed.

The FTC voted 3 to 2 on May 22, 2000 to adopt a report recommending that the Congress adopt online privacy protection legislation. Commissioner Swindle wrote a vigorous dissent, and restated his opposition at the June 27 forum.

Orson Swindle, who is one of the Commissioners on the Federal Trade Commission, made his comments at a Heritage Foundation forum in Washington DC on Tuesday, June 27.

The event was titled "Will Government Strangle the New Economy?" House Majority Leader Dick Armey (R-TX) was the lead off speaker. Commissioner Swindle was not a member of the panel. However, the moderator of the panel, James Glassman, publisher of Tech Central Station, asked him late in the program if he wanted to offer any comments.

Commissioner Swindle stood up and offered his off the cuff remarks about the status of online privacy legislation.

"This issue of privacy," said Swindle, "is going to be the hot topic of the summer. And it will be demagogued beyond anything you have ever seen. And that is what is going on now."

"We have got an enormous propaganda battle going. And the private sector is losing that battle. Privacy is something that you can stir up emotions instantly."

"But here is my pitch. We don't need leadership in Congress. We need leadership in industry," said Swindle. "The reason we are loosing this battle -- and I would almost bet you that in the next Congress there will be some privacy regulation. Count on it. And in my mind it is going to be the fault of industry. Not because they did not make good progress. They have made pretty darn good progress over the last several years."

	Orson Swindle

He elaborated that studies have shown that the percentage of surveyed web sites with posted privacy policies has grown from 14% to 90%.

"Industry is not telling the story well enough. It is easy to tell about the bad things, because the emotion is so high. And in politics, we know the emotion carries most elections, not logic or sound reasoning, or anything else. So, I think the industry has got to step up to the plate. They have got to lead. They have got to show the way. They have got to tell people the marvelous benefits from all this technology. And they have also got to convince customers they care about them."

After the program, Tech Law Journal asked Commissioner Swindle about the prospects for online privacy legislation. He reiterated that the Congress would probably pass a bill in the next Congress. He added that the chances would be higher if the Democrats win majorities in the House and Senate in the November elections. He would not speculate on what the contents of the bill would be. However, he stated that it would not include all four of the privacy practices recommended in the FTC's report to Congress.

He also restated his opposition to such legislation, and twice stated that if an online privacy bill becomes law, "consumers will rue the day."

The May 22, 2000 FTC report recommended that the Congress pass legislation that would give the FTC wide authority pass and enforce regulations in four areas:

"(1) Notice -- Web sites would be required to provide consumers clear and conspicuous notice of their information practices, including what information they collect, how they collect it (e.g., directly or through non-obvious means such as cookies), how they use it, how they provide Choice, Access, and Security to consumers, whether they disclose the information collected to other entities, and whether other entities are collecting information through the site.

(2) Choice -- Web sites would be required to offer consumers choices as to how their personal identifying information is used beyond the use for which the information was provided (e.g., to consummate a transaction). Such choice would encompass both internal secondary uses (such as marketing back to consumers) and external secondary uses (such as disclosing data to other entities).

(3) Access -- Web sites would be required to offer consumers reasonable access to the information a Web site has collected about them, including a reasonable opportunity to review the information and to correct inaccuracies or delete information.

(4) Security -- Web sites would be required to take reasonable steps to protect the security of the information they collect from consumers."