Congress starts scrutinizing online privacy

By Jennifer O'Neill, PC World |  Business

Exploitation of personal information is the central fear voiced by consumers worried about e-commerce privacy, and junk mail is often cited as an annoying result of such Web site data-gathering. But in actuality, the opposite is true, according to Fred Cate, a law professor at Indiana University in Bloomington who testified at last week's hearing.

If online companies can't gather information about their customers, they can't target their mailings to reflect consumers' likely interest, and the result is even more junk mail, he says.

Emory University law and economics professor Paul Rubin raised another view opposing privacy regulation. "The potential benefits of regulation appear to be small because there is little evidence that consumers are now being harmed by misuse of marketing and advertising information."

Growing Scrutiny Expected

But consumers continue to fear that personal information collected on the Web will be exploited.

"The real and perceived fears surrounding privacy need to be addressed," says Rep. DeGette.

The hearing is just the first in a series of many to examine privacy issues, says W.J. "Billy" Tauzin, R-Louisiana, chair of the Energy and Commerce committee.

"Before we can have great debates of how to fix the current situation, we must understand the current situation and the constraints we are bound by," Tauzin said. "Before we add new law, we must examine the old, as the heavy hand of government often takes a broad swipe when invited in."

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