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Privacy Implications of Online Advertising Hearing S. HRG. 110–1179 PRIVACY IMPLICATIONS OF ONLINE ADVERTISING HEARING BEFORE THE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION UNITED STATES SENATE ONE HUNDRED TENTH CONGRESS SECOND SESSION JULY 9, 2008 Printed for the use of the Committee on Commerce, Science, and Transportation ( U.S. GOVERNMENT PRINTING OFFICE 76–329 PDF WASHINGTON : 2012 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Nov 24 2008 14:12 Oct 23, 2012 Jkt 075679 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 S:\GPO\DOCS\76329.TXT JACKIE SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION ONE HUNDRED TENTH CONGRESS SECOND SESSION DANIEL K. INOUYE, Hawaii, Chairman JOHN D. ROCKEFELLER IV, West Virginia TED STEVENS, Alaska, Vice Chairman JOHN F. KERRY, Massachusetts JOHN MCCAIN, Arizona BYRON L. DORGAN, North Dakota KAY BAILEY HUTCHISON, Texas BARBARA BOXER, California OLYMPIA J. SNOWE, Maine BILL NELSON, Florida GORDON H. SMITH, Oregon MARIA CANTWELL, Washington JOHN ENSIGN, Nevada FRANK R. LAUTENBERG, New Jersey JOHN E. SUNUNU, New Hampshire MARK PRYOR, Arkansas JIM DEMINT, South Carolina THOMAS R. CARPER, Delaware DAVID VITTER, Louisiana CLAIRE MCCASKILL, Missouri JOHN THUNE, South Dakota AMY KLOBUCHAR, Minnesota ROGER F. WICKER, Mississippi MARGARET L. CUMMISKY, Democratic Staff Director and Chief Counsel LILA HARPER HELMS, Democratic Deputy Staff Director and Policy Director CHRISTINE D. KURTH, Republican Staff Director and General Counsel PAUL NAGLE, Republican Chief Counsel (II) VerDate Nov 24 2008 14:12 Oct 23, 2012 Jkt 075679 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\76329.TXT JACKIE C O N T E N T S Page Hearing held on July 9, 2008 ................................................................................. 1 Statement of Senator Carper .................................................................................. 80 Statement of Senator DeMint ................................................................................. 71 Statement of Senator Dorgan ................................................................................. 1 Prepared statement of Hon. Daniel K. Inouye ............................................... 3 Prepared statement by Hon. Ted Stevens ...................................................... 68 Statement of Senator Klobuchar ............................................................................ 68 Statement of Senator Nelson .................................................................................. 75 Statement of Senator Thune ................................................................................... 72 Statement of Senator Vitter .................................................................................... 66 WITNESSES Crews, Jr., Clyde Wayne, Vice President for Policy/Director of Technology Studies, Competitive Enterprise Institute ......................................................... 47 Prepared statement .......................................................................................... 48 Dykes, Robert R., CEO, NebuAd, Inc. .................................................................... 17 Prepared statement .......................................................................................... 19 Harris, Leslie, President/CEO, Center for Democracy and Technology .............. 22 Prepared statement .......................................................................................... 24 Hintze, Michael D., Associate General Counsel, Microsoft Corporation ............. 55 Prepared statement .......................................................................................... 57 Horvath, Jane, Senior Privacy Counsel, Google, Inc. ........................................... 11 Prepared statement .......................................................................................... 12 Kelly, Chris, Chief Privacy Officer, Facebook, Inc. ............................................... 40 Prepared statement .......................................................................................... 42 Parnes, Lydia B., Director, Bureau of Consumer Protection, Federal Trade Commission ........................................................................................................... 4 Prepared statement .......................................................................................... 5 APPENDIX Letter, dated July 9, 2008, to Hon. Daniel K. Inouye and Hon. Ted Stevens from Hon. Richard Blumenthal, Attorney General, State of Connecticut ....... 87 Response to written questions submitted by Hon. Maria Cantwell to: Robert R. Dykes ................................................................................................ 97 Leslie Harris ..................................................................................................... 96 Jane Horvath .................................................................................................... 93 Chris Kelly ........................................................................................................ 92 Lydia B. Parnes ................................................................................................ 87 Response to written questions submitted by Hon. David Vitter to: Clyde Wayne Crews, Jr. ................................................................................... 107 Robert R. Dykes ................................................................................................ 98 Leslie Harris ..................................................................................................... 97 Michael D. Hintze ............................................................................................. 108 Jane Horvath .................................................................................................... 95 Chris Kelly ........................................................................................................ 93 Lydia B. Parnes ................................................................................................ 90 (III) VerDate Nov 24 2008 14:12 Oct 23, 2012 Jkt 075679 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\76329.TXT JACKIE VerDate Nov 24 2008 14:12 Oct 23, 2012 Jkt 075679 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\76329.TXT JACKIE PRIVACY IMPLICATIONS OF ONLINE ADVERTISING WEDNESDAY, JULY 9, 2008 U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. The Committee met, pursuant to notice, at 10 a.m., in room SR– 253, Russell Senate Office Building, Hon. Byron L. Dorgan, pre- siding. OPENING STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR FROM NORTH DAKOTA Senator DORGAN. We are going to begin the hearing this morn- ing. This is a hearing of the Senate Commerce Committee. I am going to begin the hearing now. We will have other Senators join us, but at the moment there is scheduled a series of five votes be- ginning at 11:15. That may slip a bit. It may slip to 11:30, which means that I would have until 11:45 to leave the room in order to still make the vote. That would give us an hour and 45 minutes. If we do not finish the hearing in an hour and 45 minutes, we will have to recess. The recess will last at least an hour to an hour and a half because five votes take that long. So my hope would be that we can finish this hearing in about an hour and 45 minutes. I do not want to shortchange the subject. This is a very important subject. We will be holding another hear- ing on this subject, but for now, as an opening, I want to at least give an opening statement, and then I am going to call on all of the witnesses to provide the testimony. And then we will have time for questions by Senators who come to the hearing. I want to thank all of you for joining us today to discuss an im- portant topic of privacy in the context of marketing for online ad- vertising. The Commerce Committee has always had an interest in this subject of protecting privacy and doing so in a way that is thoughtful and appropriate. And we need to take a closer look, I think, at Internet users’ privacy as the field of online advertising develops. I understand, first of all, there are many, many benefits to online advertising. I understand that the free Internet and the open archi- tecture of the Internet allows Internet service providers and Inter- net companies to provide services and products and information in a way that is almost breathtaking, and I understand the backbone of much of that is supported by advertising, by online Internet ad- vertising. (1) VerDate Nov 24 2008 14:12 Oct 23, 2012 Jkt 075679 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\GPO\DOCS\76329.TXT JACKIE 2 The questions that we discuss and raise today are not meant to suggest that advertising has no value as it relates to the Internet. Quite the contrary is the case. But I think there are issues that are developing that are important issues and those are issues about the invisibility of data collection, the collection of information about online users, the security of the information that has been collected, and the use of that information. I am concerned about the ability of users of the Internet to choose to allow others access to their data with an understanding of where it will be transferred and how it will be used. I am concerned about the users’ ability to control this information. Most of the discussion about advertising
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