Speech by Secretary of Commerce William Daley.
Commerce Department Conference on Internet Privacy.
Date:  June 23, 1998.
Source:  Department of Commerce.  This document was created by scanning a photocopy and converting it to HTML.

(as prepared for delivery)

Thanks, Larry (Irving). Good morning. And thank you all for being here.

It was almost a year ago, when President Clinton and Vice President Gore assigned me the task of asking: how should we move forward on electronic commerce?

The President is well aware of the importance of information technologies.

He is well aware they have accounted for a quarter or our economic growth, in an economy that is the best in a generation.

He is well aware that declining computer prices have kept inflation down ... and that e-commerce can soon be a $300 billion business.

He does not want government doing anything that would mess up all of that success.

So, in the last year, his approach has been: the private sector should lead.

But frankly, it also is government's duty to make sure companies follow the will of the people.

As Teddy Roosevelt told businesses almost 100 years ago, "whenever great social or industrial changes take place, no matter how much good there may be to them, there is sure to be some evil."

The fact is we have to protect the consumer.

We have to protect children.

Companies that don't understand that are short sighted.

I owe the President a report very soon on our progress in a number of fronts.

I see this conference as your chance to show me your goods,

And I very much want to then show the President why industry leadership is much better than Washington intervention.

To me, your issue -- privacy -- is the make-or-break issue for all of electronic commerce.

If consumers feel when they buy a book or browse a magazine on line, that someone is keeping a personal profile on them, they'll stop buying books.

If they feel that when they apply for loans at different banks, a third party can learn about their personal finances, it will be the last time they bank on the Internet.

If parents hear that their 10-year old ventured onto a web page that asked personal questions, and that information is being sold to others, that is the last venturing the child will do.

And consumers will want government to intervene.

They did when they saw prying eyes could get records of video rentals.

They did when they felt their credit information wasn't well protected.

They will want it here, too.

Later this morning, Alan Westin will release his latest poll demonstrating -- once again -- how worried Americans are.

More than 80 percent are concerned about threats to their privacy when they are on-line.

More than 90 percent want businesses telling them how they will use personal information.

Let me say, when 80 or 90 percent of Americans agree on anything, you know this is serious!

In the last several months, I have expressed concerns that companies have been too slow to step forward with self-regulatory plans.

There are probably a lot of reasons for that.

Companies are used to competing -- not cooperating.

Some obviously like the market information they gather, and if they can make money off of it, they will.

Some prefer no regulation, over self-regulation, until they are truly convinced there will be government regulation.

Yesterday, for the first time some companies did step forward -- and in a big way,

I met with members of the Online Privacy Alliance. They represent 50 companies and associations. We will be closely looking over their proposal in the next few days.

On first impressions, what I like is, the Alliance agreed that no information may be collected from a child under 13, without parental consent.

They agreed consumers could opt out of any use of their personal data.

But they informed me they need until September 15th to develop an enforcement proposal.

Frankly, I'm disappointed I have to wait another day to hear how the industry plans to police itself.

I hope they report to me sooner than September 15th.

I told them -- as I will tell you: articulating principles isn't adequate.

There has to be a way to enforce this that the consumer can trust, or this won't work.

There has to be some meaningful consequences to companies that don't comply.

They agreed.

I was also pleased to learn that TRUSTe, which does provide an enforcement mechanism, is moving to require all of its members to adopt strong privacy principles as well. That is very good news.

And yesterday, I understand that the Better Business Bureau announced it will be developing a privacy program.

I want self-regulation to work.

We are prepared to work with all the stakeholders to do what we can.

But I think it is worthy to ask: what happens if self regulation fails?

The loser would be industry, tile ones with the biggest stake in this.

All the goodwill you could establish with your customers by simply keeping their private information private would be history.

To be frank, I have taken some hits for supporting the industry on self-regulation.

There are people who think industry has been dancing around, avoiding the real issues, buying time -- and government should step up to the plate.

I sincerely hope industry steps up to the plate, first.

But if it doesn't we will have to consider all the options we have for protecting the American consumer.

I don't recall another time in history when a President said if you deal with a problem -- we won't have to.

It would be a shame on you, a shame on all of the wonderful good that you have done, if government now has to intervene.

And let me be frank- I don't want to hear griping and moaning from any of you, if that happens.

I am the last Commerce Secretary of this century -- assuming I do. my job right!

I don't know of another Commerce Secretary this century who saw, as I am seeing, a technology totally change the way commerce is done.

Here's a technology that could touch every business owner in the country.

Here's a technology that could give every one-person store in America the ability to sell products to every corner of the planet like a Fortune 100 company does.

This is an era of truly sweeping changes.

So, I hope positive things happen at this Summit, and in the coming days, that I can report to the President.

I hope you deal with the enforcement issue, and that you bring more companies into this circle.

I hope you hang -- together -- as an industry and say to the American people: we will protect your privacy.

And thank you very much.