FC: U.S. privacy regulation not inevitable or a good idea --oped

[Declan McCullagh <declan () well com>]

> From: "Jim Harper" <jim.harper () policycounsel com>
> To: "Declan McCullagh" <declan () wired com>
> Subject: Children's Online Privacy
> Date: Mon, 27 Mar 2000 14:27:41 -0500
>
> Declan:
>
> Appropos of the postings the other day about DoubleClick, I thought 
> politechnicals would be interested in what's below.
>
> Jim
>
> <http://www.techcentralstation.com/NewsDesk.asp?FormMode=PolicyTracksArticles&ID=19>http://www.techcentralstation.com/NewsDesk.asp?FormMode=PolicyTracksArticles&ID=19
>
> Monday, March 27, 2000
>
>              The hidden costs of online privacy
>
>
>              By: James W. Harper, Founder and Principal, PolicyCounsel.Com
>
>              Earlier this month, Kevin O Connor, the Chairman and CEO of 
> DoubleClick,
>              announced that his company was retreating from its plan to 
> amalgamate
>              consumers personal information. Up until then, DoubleClick 
> was taking
>              dramatic steps to customize the advertising you see online. 
> This retreat
>              represented a turning point in the unfolding history of Internet
>              regulation. The online privacy debate has been joined and, 
> despite
>              yawning gaps in the quality of that debate, the press for 
> federal
>              regulation will either gain ground or recede from here.
>
>              DoubleClick s move came on the heels of a rather large 
> public relations
>              blunder. The online advertising industry has not yet made 
> the case for
>              using personal information to tailor ads, and there were 
> allegations that
>              the DoubleClick plan violated the company s own privacy policy.
>
>              Online advertisers are on the defensive and in disarray on 
> use of
>              personal information. This is leading some to conclude --- 
> even those
>              supposedly lobbying on the industry s behalf --- that 
> federal online
>              privacy regulation is inevitable.
>
>              This sense of inevitability is appropriate, but for a 
> different reason than
>              one might think: we are about to see federal online privacy 
> regulations
>              in action. There is no need to guess at what they might do. An
>              experiment with government privacy standards has already 
> begun on our
>              nation s children.
>
>              Congress passed the Children s Online Privacy Protection Act 
> in 1998.
>              Regulations that take effect April 21st will dictate for the 
> first time that
>              a commercial website collecting personal information from 
> children must
>              have a privacy link more prominent than other links on the site.
>              "Personal information" includes e-mail addresses, and just 
> knowing that
>              a child s information has been collected brings the site 
> under the
>              regulation. As a practical matter, this means that the 
> regulation affects
>              all high-traffic sites that collect information from users.
>
>              More important than dictating the appearance of every commercial
>              home page, the regulations require "verifiable parental 
> consent" before a
>              website operator may collect information like e-mail 
> addresses from
>              children. For the internal use of the website, this means 
> getting an
>              e-mail from the parent. For other uses, this means talking 
> to a parent,
>              or getting a parent s snail mail, fax, or credit card number.
>
>              Estimates of the price tag for serving kids online run as 
> high as
>              $100,000 dollars a year. This means that small or new 
> businesses will
>              never enter this market or create innovative content for 
> kids. The
>              Federal Trade Commission was wildly off-base when it 
> certified that
>              these regulations would not significantly impact a 
> substantial number of
>              small businesses. Predicting what we give up when we make it 
> hard to
>              serve children online is like predicting what species would 
> have evolved
>              in an ecosystem that has been lost. If the Internet has 
> taught us one
>              thing, though, it is that innovation comes faster and 
> stronger if small
>              entrepreneurs participate.
>
>              With the price of serving children on the Web going from a 
> few pennies
>              each to a few dollars or more, access for some children will 
> be cut off
>              entirely. Several companies have announced that they will no 
> longer
>              provide free e-mail for kids.
>
>              Other companies are undertaking the onerous "verifiable parental
>              consent" process. This hurdle will trip up many of the 
> children who might
>              benefit most from online contact and educational content. 
> Parents who
>              are absentee, do not have computer skills, do not speak 
> English, or do
>              not have credit cards will be unlikely to allow their 
> children access to
>              the online world. The children of highly educated and 
> credit-worthy
>              parents will speed through an increasingly diverse and 
> engaging online
>              world, while those outside the mainstream will languish in 
> ignorance.
>              Once again, the law of unintended consequences will have its 
> most
>              devastating effects on the most innocent, our nation s 
> at-risk children.
>
>              The children s privacy regulations provide a small, but 
> widening window
>              on what could come from broader regulation. Additional 
> federal online
>              privacy regulations are not an inevitability and they should 
> not be.
>
>              There will be debates about online privacy in the coming 
> months and
>              years. Hopefully, they will be serious enough to focus on 
> uses of
>              personal information that are both harmful and not already 
> illegal. They
>              should acknowledge that our society is premised on freedom of
>              information, and that each individual should have power to 
> define and
>              defend his or her own sense of privacy. And these debates should
>              absolutely include whether current regulations requiring 
> businesses to
>              report customers private financial information to the 
> government should
>              stand.
>
>              Most of all, before the Federal Trade Commission and 
> Congress institute
>              a new round of online privacy regulation, they should 
> examine the last
>              round, and whether children on the margins should lose 
> access to our
>              increasingly online society.
>
>              James W. Harper is the founder and principal of 
> PolicyCounsel.Com.
>
> . . . .

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