Today, the Subcommittee on Commerce, Manufacturing, and Trade of the House Energy and Commerce Committee has a hearing entitled “Understanding Consumer Attitudes About Privacy.” Four of the six witnesses appearing before the subcommittee are Advisory Board members (or, in the case of Microsoft, representing a company whose CPO is on our Advisory Board).
Alessandro Acquisti, Associate Professor of Information Technology and Public Policy at the Heinz College, Carnegie Mellon University; Scott Meyer, CEO of Evidon (f/k/a Better Advertising); Barb Lawler, Chief Privacy Office of Intuit; and Michael Hintze, Associate General Counsel of Microsoft will present testimony.
In his prepared statement, Professor Acquisti says a critical question for Congress is how to create incentives that will foster the deployment of innovative technologies that achieve information sharing and privacy protection:
First, consumers want more than one thing when it comes to privacy and disclosure. Consumers enjoy disclosing information online to friends, and enjoy receiving personalized and free services as a result of the information they disclose. However, they also want the information they reveal to others to be protected, and they are concerned about misuses of their personal data.
Second, consumers face major hurdles in properly trading-off privacy and disclosure in the marketplace. Problems of asymmetric information, bounded rationality, and cognitive and behavior biases make it difficult for consumers to choose optimally between protecting privacy and sharing data.
Third, industry and academic research on privacy enhancing technologies suggests that consumers and firms can simultaneously achieve information sharing and privacy protection. In fact, research in this area shows that it is possible for companies to make innovative uses of personal data, and tap information as an economic resource, in ways that do not sacrifice consumer privacy. Therefore, a critical question for Congress is how to create incentives that will foster the deployment of these innovative technologies.
Scott Meyer says in his prepared testimony:
One-Size-Fits-All Solutions such as “Do Not Track” Ignore Consumers’ Preference for Greater Transparency, Choice, and Control
In an attempt to provide consumers with more effective privacy controls, one-size-fitsall proposals such as “Do Not Track” have gained traction, primarily due to their supposed simplicity. Indeed, during the current Congress, several Members have put forward various Do Not Track proposals as have various interest groups. I certainly understand the appeal of Do Not Track, particularly given the popularity and success of the FTC’s Do Not Call list to control telemarketers. Nevertheless, based on our consumer research, we have considerable doubt that a blanket Do Not Track mandate is well-suited to address consumers’ varying privacy expectations and needs. Can it possibly do so in a way that fulfills the expectations of its name? And, as many have observed, such a mandate likely would fundamentally alter the functionality of the Internet that consumers have come to expect.
Mike Hintze’s prepared testimony contains the following:
[A] multi-factored approach to addressing consumer privacy [is necessary] that includes: (1) company best practices, such as privacy by design, transparency, and security; (2) technology tools¸ such as the browser-based “Do Not Track” mechanism that we incorporated into Internet Explorer 9 to allow consumers to make informed privacy choices for themselves; (3) industry self-regulation, such as the Self-Regulatory Program for Online Behavioral Advertising, which employs a universally-recognizable “Advertising Option” icon that consumers can access to learn about and opt out of online ads; and (4) consumer education, which equips consumers to make choices that align to their own privacy needs and helps protect them from harm.
Barb Lawler, in her testimony, describes the extensive consumer research undertaken by Intuit leading to the company’s Data Stewardship Principles.
Full copies of the prepared statement of the FPF folks and the other two witnesses, Pam Dixon of the World Privacy Forum and Linda Wooley of the Direct Marketing Association can be found here http://energycommerce.house.gov/hearings/hearingdetail.aspx?NewsID=8979