Opening statement by Sen. Conrad Burns (R-MT).
Hearing of Senate Communications Subcommittee.
Re: Online privacy and S 809.

Date: July 27, 1999.
Source: Office of Sen. Burns. This document was created by Tech Law Journal by scanning a fax copy, and converting to HTML.


JULY 27,1999

Today's hearing concerns a topic of critical importance in today's increasingly digital world: the protection of online privacy.

The recent growth of the Internet has been nothing short of breathtaking. The number of Internet users in the U.S. is now approaching 100 million. The number of online consumers is now over 30 million. Clearly, the Internet has become a staple of everyday life.

The tremendous reach of the Internet does pose challenges as well as opportunities, however. Just as the revolution in communications technology has allowed individuals to gain access to nearly limitless information, unfortunately digital technologies can also be used by bad actors to collect nearly limitless information on individuals without their knowledge.

I would like to thank my good friend and colleague Sen. Wyden for his vision and hard work in working with me on the "Online Privacy Protection Act of 1999," which would ensure a safety net of privacy for online consumers. I have worked closely with Sen. Wyden in a bipartisan manner on numerous high-tech issues. I know that Sen. Wyden shares my hesitation to engage in any sort of regulation of the Internet. I have stated on many occasions that nothing happens until a sale is made and the intent of the bill is to foster, not impede, the tremendous growth in electronic commerce. This bill was the product of many discussions with both industry and privacy groups and represents a balanced, measured approach to the issue.

We are very fortunate to have the entire Federal Trade Commission here today. I would especially like to thank Chairman Pitofsky for altering his very demanding schedule to appear today.

I have worked very closely with Chairman Pitofsky on matters of Internet privacy in the past. Last year, the "Children's Online Privacy Protection Act," which I supported, drew heavily from the recommendations and findings of the FTC's June 1998 report on Internet privacy. The 1998 report found that 89% of children's websites collected personal information, while only 10% of the sites provided for some form of parental control over the collection and use of the information.

Thanks to the recommendations of the FTC and the work of Sen. McCain, Sen. Bryan and other members of the Commerce Committee, the "Children's Online Privacy Protection Act," which required the FTC to come up with rules that would provide notice of websites' personal information collection, passed into law in the 105th Congress.

Given this background, I have to say I was very puzzled by the FTC's recent report to Congress on internet privacy.

The report acknowledged that fewer than 10 percent of websites meet basic privacy protections, but called for no federal legislation to address this critical situation.

The report pointed to a recent Georgetown study that showed that nearly two-thirds of websites now post privacy policies as proof of industry progress and a reason for legislative inaction. I applaud the increase in posting privacy policies, but what about the other third of websites that fail to inform consumers? Also, I have examined several of these policies and many of them seem to have the purpose of exempting websites from liability rather than informing consumers of their rights. The fact that many of these policies require a law degree to decipher, not to mention a magnifying glass given that they are in microscopic type, doesn't lead me to the conclusion that no federal action is necessary to protect online privacy.

I find the dissenting opinion of Commissioner Anthony in the report very compelling. She rightly states that legislation is necessary to at least ensure a minimum of consumer privacy protection in the digital era. In her opinion, she expresses concern "that the absence of effective privacy protections will undermine consumer confidence and hinder the advancement of electronic commerce and trade." I couldn't agree more. In fact, several recent studies reveal that the single greatest reason consumers don't buy goods online is because of concerns about privacy. Unfortunately, these fears have been proven to be well-based.

As the communications revolution alters every aspect of our personal and economic lives, now is no time for delay and inaction. I will continue to move forward with this critical bill to make sure that consumers can feel confident in the safety of their personal information in the digital age. I will work with Sen. Wyden and my colleagues on the Committee to ensure that this bill moves to markup and passage by the full Senate as quickly as possible.

I look forward to the testimony of the witnesses. Thank you.